10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2006

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number 1-4801

BARNES GROUP INC.

(Exact name of registrant as specified in its charter)

Delaware	06-0247840
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
123 Main Street, Bristol, Connecticut	06011-0489
(Address of Principal Executive Offices)	(Zip Code)

(860) 583-7070

Registrant’s telephone number, including area code

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x                Accelerated filer  ¨                Non-accelerated filer  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

The registrant had outstanding 24,678,912 shares of common stock as of May 2, 2006.

Barnes Group Inc.

Index to Form 10-Q

For the Quarterly Period Ended March 31, 2006

		Page
Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Income for the three months ended March 31, 2006 and 2005	3
	Consolidated Balance Sheets as of March 31, 2006 and December 31, 2005	4
	Consolidated Statements of Cash Flows for the three months ended March 31, 2006 and 2005	5
	Notes to Consolidated Financial Statements	6-14
	Report of Independent Registered Public Accounting Firm	15
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16-23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
Part II.	OTHER INFORMATION
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 6.	Exhibits	25
	Signatures	26
	Exhibit Index	27

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BARNES GROUP INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

(Unaudited)

	Three months ended March 31,
	2006		2005
			As Restated (See Note 2)
Net sales	$	299,851	$	273,730
Cost of sales		190,633		175,748
Selling and administrative expenses		81,111		78,959
		271,744		254,707
Operating income		28,107		19,023
Other income		295		262
Interest expense		4,387		4,167
Other expenses		575		369
Income before income taxes		23,440		14,749
Income taxes		4,978		3,245
Net income	$	18,462	$	11,504
Per common share:
Net income:
Basic	$	.77	$	.49
Diluted		.73		.48
Dividends		.22		.20
Average common shares outstanding:
Basic		24,127,600		23,300,210
Diluted		25,377,980		23,917,176

See accompanying notes.

3

BARNES GROUP INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

	March 31, 2006			December 31, 2005
				As Restated (See Note 2)
Assets
Current assets
Cash and cash equivalents	$	36,541		$	28,112
Accounts receivable, less allowances (2006 - $3,177; 2005 - $3,063)		171,435			155,595
Inventories		167,095			159,238
Deferred income taxes		21,230			24,563
Prepaid expenses		13,312			11,157
Total current assets		409,613			378,665
Deferred income taxes		24,051			22,478
Property, plant and equipment		498,160			489,746
Less accumulated depreciation		(337,016	)		(332,690	)
		161,144			157,056
Goodwill		236,559			235,299
Other intangible assets, net		184,849			163,849
Other assets		49,701			48,513
Total assets	$	1,065,917		$	1,005,860
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable	$	—		$	4,000
Accounts payable		142,488			120,158
Accrued liabilities		80,974			93,615
Long-term debt – current		39,990			40,084
Total current liabilities		263,452			257,857
Long-term debt		278,713			241,941
Accrued retirement benefits		88,334			88,036
Other liabilities		16,967			16,869
Commitments and Contingencies (Note 11)
Stockholders’ equity
Common stock - par value $0.01 per share   Authorized: 60,000,000 shares   Issued: 24,419,694 shares at par value		244			244
Additional paid-in capital		129,616			137,206
Treasury stock, at cost (2006 – 146,104 shares; 2005 – 415,910 shares)		(5,131	)		(14,590	)
Retained earnings		317,120			304,274
Accumulated other non-owner changes to equity		(23,398	)		(25,977	)
Total stockholders’ equity		418,451			401,157
Total liabilities and stockholders’ equity	$	1,065,917		$	1,005,860

See accompanying notes.

4

BARNES GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)

	Three months ended March 31,
	2006			2005
				As Restated (See Note 2)
Operating activities:
Net income	$	18,462		$	11,504
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		8,978			8,873
Gain on disposition of property, plant and equipment		(39	)		(131	)
Non-cash stock-based compensation expense		1,594			3,704
Changes in assets and liabilities, net of the effects of acquisitions:
Accounts receivable		(15,067	)		(16,903	)
Inventories		(7,345	)		(12,425	)
Prepaid expenses		(2,230	)		(3,743	)
Accounts payable		7,300			10,467
Accrued liabilities		(12,760	)		(6,129	)
Deferred income taxes		1,606			2,229
Long-term pension assets		(1,228	)		(475	)
Other		(1,736	)		(1,332	)
Net cash used by operating activities		(2,465	)		(4,361	)
Investing activities:
Proceeds from disposition of property, plant and equipment		2,097			367
Capital expenditures		(12,770	)		(5,425	)
Business acquisitions, net of cash acquired		(194	)		(402	)
Revenue sharing program payments		(12,150	)		—
Other		(337	)		(112	)
Net cash used by investing activities		(23,354	)		(5,572	)
Financing activities:
Net change in other borrowings		729			6,331
Payments on long-term debt		(5,123	)		(10,145	)
Proceeds from the issuance of long-term debt		42,052			20,000
Proceeds from the issuance of common stock		2,301			828
Common stock repurchases		(25	)		—
Dividends paid		(5,318	)		(4,670	)
Other		(485	)		61
Net cash provided by financing activities		34,131			12,405
Effect of exchange rate changes on cash flows		117			181
Increase in cash and cash equivalents		8,429			2,653
Cash and cash equivalents at beginning of period		28,112			36,335
Cash and cash equivalents at end of period	$	36,541		$	38,988

Supplemental Disclosure of Cash Flow Information:

Non-cash financing and investing activities in 2006 include the acquisition of a $23.0 million intangible asset and the recognition of the corresponding liability in connection with an aftermarket revenue sharing program (“RSP”).

See accompanying notes.

5

BARNES GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All dollar amounts included in the notes are stated in thousands except per share data.)

1. Summary of Significant Accounting Policies

The accompanying unaudited consolidated balance sheet and the related consolidated statements of income and cash flows have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The consolidated financial statements do not include all information and notes required by generally accepted accounting principles for complete financial statements. The balance sheet as of December 31, 2005, as restated, has been derived from the 2005 financial statements of Barnes Group Inc. (the “Company”). For additional information, please refer to the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005. In the opinion of management, all adjustments, including normal recurring accruals considered necessary for a fair presentation, have been included. Operating results for the three-month period ended March 31, 2006 are not necessarily indicative of the results that may be expected for the year ending December 31, 2006.

See Note 2 for discussion of the Company’s change in accounting as a result of the adoption of Statement of Financial Accounting Standards (“SFAS”) No. 123R, “Share-Based Payment” as of January 1, 2006 and the restatement of previously reported amounts.

2. Stock-Based Compensation

The Company previously accounted for stock-based employee compensation plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related interpretations. Effective January 1, 2006, the Company adopted SFAS No. 123R “Share-Based Payment” which requires the cost of all share-based payments, including stock options, to be measured at fair value on the grant date and recognized in the statement of operations. This change did not have a material impact on the first quarter 2006 results. Forfeitures were previously recorded as incurred, however, the revised statement requires that an estimated forfeiture rate be applied to outstanding awards, the impact of which was not material upon adoption. Prior to the adoption of this Statement, the Company presented all tax benefits of deductions resulting from the exercise of stock options as operating cash flows in the Consolidated Statements of Cash Flows. In accordance with SFAS No. 123R, the Company records the cash flows resulting from tax deductions in excess of compensation for those options as financing cash flows. The Company has elected to utilize the modified retrospective method of adoption and therefore all periods presented prior to January 1, 2006 were restated to reflect the impact of the standard as if it had been adopted on January 1, 1995, the original effective date of SFAS No. 123, “Accounting for Stock Issued to Employees.” The amounts that are reported in the Company’s results of operations for the restated periods are the pro forma amounts previously disclosed under SFAS No. 123. As a result of the change in accounting, the following amounts were restated.

Consolidated Balance Sheet:	As Previously Reported		Adjustment			As Restated
December 31, 2005
Deferred income tax asset – long-term	$	16,526	$	5,952		$	22,478
Additional paid-in capital		102,821		34,385			137,206
Retained earnings		332,707		(28,433	)		304,274

6

Consolidated Statements of Income:	As Previously Reported		Adjustment			As Restated
Three months ended March 31, 2005
Selling and administrative expenses	$	76,888	$	2,071		$	78,959
Income taxes		4,037		(792	)		3,245
Net income		12,783		(1,279	)		11,504
Net income per common share – basic		0.55		(0.06	)		0.49
Net income per common share – diluted		0.54		(0.06	)		0.48
Average common shares outstanding – diluted		23,848,115		69,061			23,917,176
Year ended December 31, 2005
Selling and administrative expenses	$	309,991	$	10,310		$	320,301
Income taxes		17,553		(3,944	)		13,609
Net income		60,517		(6,366	)		54,151
Net income per common share – basic		2.56		(0.27	)		2.29
Net income per common share – diluted		2.48		(0.27	)		2.21
Average common shares outstanding – diluted		24,401,637		107,554			24,509,191
Year ended December 31, 2004
Selling and administrative expenses	$	284,223	$	7,150		$	291,373
Income taxes		8,601		(2,750	)		5,851
Net income		34,426		(4,400	)		30,026
Net income per common share – basic		1.49		(0.19	)		1.30
Net income per common share – diluted		1.44		(0.19	)		1.25
Average common shares outstanding – diluted		23,863,463		104,171			23,967,634
Year ended December 31, 2003
Selling and administrative expenses	$	261,983	$	5,484		$	267,467
Income taxes		5,289		(1,646	)		3,643
Net income		32,913		(3,838	)		29,075
Net income per common share – basic		1.53		(0.18	)		1.35
Net income per common share – diluted		1.49		(0.17	)		1.32
Average common shares outstanding – diluted		22,101,560		3,270			22,104,830
Year ended December 31, 2002
Selling and administrative expenses	$	209,192	$	7,125		$	216,317
Income taxes		5,741		(2,743	)		2,998
Net income		26,802		(4,382	)		22,420
Net income per common share – basic		1.43		(0.23	)		1.20
Net income per common share – diluted		1.40		(0.23	)		1.17

7

Please refer to the Company’s Annual Report on Form 10-K as filed February 27, 2006 for a description of the Company’s stock incentive award plans and their general terms. As of March 31, 2006, incentives had been awarded in the form of incentive stock rights, performance unit awards and restricted stock unit awards (collectively “Rights”) and stock options. Certain of the incentives contain graded-vesting features and service conditions. The Company has elected to use the straight-line method to recognize compensation costs related to such awards. Stock option awards vest over a period ranging from six months to five years. The maximum term of stock option awards is 10 years. Upon exercise of a stock option or upon vesting of Rights, shares are issued from treasury shares held by the Company or from authorized shares. Effective January 1, 2006, the Company eliminated the reload feature relative to its stock option awards and decreased the discount for stock purchases under its Employee Stock Purchase Plan from 15% to 5%.

During the three months ended March 31, 2006 and 2005, the Company recognized $1,594 and $3,704, respectively, of stock-based compensation cost and $610 and $1,417, respectively, of related tax benefits. At March 31, 2006, the Company had $13,392 of unrecognized compensation costs related to unvested awards. The costs are expected to be recognized over a weighted average period of 2.9 years. The Company received cash proceeds from the exercise of stock options of $1,988 and $429 in the first quarter of 2006 and 2005, respectively. In addition, the Company is currently in a net operating loss tax position and therefore has not realized any tax benefits for tax deductions from awards exercised in these periods.

The following table summarizes information about the Company’s stock option awards during the three months ended March 31, 2006.

	Number Of Shares		Weighted - Average Exercise Price
Outstanding, January 1, 2006	3,199,588		$	28.57
Granted	145,950			37.27
Exercised	(86,281	)		23.70
Forfeited	(1,175	)		23.43
Outstanding, March 31, 2006	3,258,082			29.09
Exercisable, March 31, 2006	2,477,573			29.24

The total intrinsic value (the amount by which the stock price exceeds the exercise price of the option on the date of exercise) of the stock options exercised during the three months ended March 31, 2006 and 2005 was $1,250 and $1,364, respectively. The weighted average fair value of stock options granted in the three months ended March 31, 2006 and 2005 was $9.30 and $4.95, respectively. The fair value of each stock option grant on the date of grant was estimated using the Black-Scholes option-pricing model based on the following weighted average assumptions:

	Three months ended March 31,
	2006		2005
Risk-free interest rate	4.55	%	3.67	%
Expected life (years)	5.2		2.9
Expected volatility	30	%	30	%
Expected dividend yield	3.16	%	3.00	%

8

The risk-free rate is based on the term structure of interest rates at the time of the option grant. The expected life represents an estimate of the period of time that options are expected to remain outstanding. Assumptions of expected volatility of the Company’s common stock and expected dividend yield are estimates of future volatility and dividend yields based on historical trends.

The following table summarizes information about stock options outstanding that are expected to vest and stock options outstanding that are exercisable at March 31, 2006:

Options Outstanding, Expected to Vest						Options Outstanding, Exercisable
Shares	Weighted- Average Exercise Price		Aggregate Intrinsic Value		Weighted- Average Remaining Term	Shares	Weighted- Average Exercise Price		Aggregate Intrinsic Value		Weighted- Average Remaining Term
3,189,921	$	29.09	$	36,399	5.7 years	2,477,573	$	29.24	$	27,894	4.7 years

The following table summarizes information about the Company’s Rights during the three months ended March 31, 2006.

	Number Of Units		Weighted- Average Fair Value
Non-vested, January 1, 2006	916,473		$	24.01
Granted	108,215			37.26
Forfeited	(7,195	)		24.39
Vested / Issued	(219,697	)		28.94
Non-vested, March 31, 2006	797,796			25.78

As of March 31, 2006, there were 797,796 non-vested Rights outstanding, of which 701,596 Rights vest upon meeting certain service conditions and 96,200 Rights vest upon satisfying established performance goals. Of the 701,596 Rights that vest upon meeting service conditions, 290,000 Rights have accelerated vesting provisions based upon meeting established market conditions. Fifty percent of the Rights vest upon the fair market value of the Company’s stock price exceeding 200% of the grant date fair market value for 30 consecutive trading days. The remaining 50% vest on the first anniversary of such 30^th consecutive trading date or, if earlier, the vesting date. If the fair market value of the Company’s stock exceeds $37.80 and $57.10 (pre-stock split) for 30 consecutive days, 186,000 and 104,000 Rights, respectively, will meet the market condition. The vesting acceleration conditions were not satisfied as of March 31, 2006. If the 186,000 Rights meet the market condition in the second quarter of 2006, compensation expense would be accelerated by approximately $800 for the second quarter of 2006 and $900 for the full year 2006 compared to the expected straight line expense and would be offset by a reduction in the expected expense in an equal amount in future periods.

3. Net Income Per Common Share

For the purpose of computing diluted net income per share, the weighted-average number of shares outstanding was increased by 1,250,380 and 616,966 for the three-month periods ended March 31, 2006 and 2005, respectively, for the potential dilutive effects of stock-based incentive plans. As of March 31, 2006, there were 3,258,082 options for shares of common stock outstanding of which 3,087,632 were considered dilutive. As of March 31, 2005, there were 3,690,626 options for shares of common stock outstanding of which 2,055,415 were considered dilutive. There were no adjustments to net income for the purposes of computing income available to common stockholders for those periods.

9

The Convertible Senior Subordinated Notes are convertible, under certain circumstances, into a combination of cash and common stock of the Company. The conversion price is approximately $42.19 per share of common stock and will decline in the second quarter of 2006 to approximately $42.16 per share of common stock (pre-stock split) due to the three cents increase in the quarterly cash dividend announced in the second quarter (See Note 12). As of March 31, 2006, the Company’s market price per share had not exceeded the conversion price of the notes. As such, under the net share settlement method, there were no potential shares issuable under the notes that were considered dilutive.

4. Comprehensive Income

Comprehensive income includes all changes in equity during a period except those resulting from the investment by, and distributions to, stockholders. For the Company, comprehensive income for the period includes net income and other non-owner changes to equity, which comprise foreign currency translation adjustments and deferred gains and losses related to certain derivative instruments.

Statements of Comprehensive Income

(Unaudited)

For the three months ended March 31,	2006			2005
				As Restated
Net income	$	18,462		$	11,504
Unrealized gains (losses) on hedging activities		(1	)		332
Foreign currency translation adjustments		2,580			(1,467	)
Comprehensive income	$	21,041		$	10,369

5. Inventories

The components of inventories consisted of:

	March 31, 2006		December 31, 2005
Finished goods	$	101,413	$	100,833
Work-in-process		35,232		32,105
Raw material and supplies		30,450		26,300
	$	167,095	$	159,238

On January 1, 2006, the Company adopted SFAS No. 151, “Inventory Costs, an amendment of Accounting Research Bulletin (“ARB”) No. 43, Chapter 4.” This Statement amended the guidance in ARB No. 43 to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material, and required that those items be recognized as current-period charges. Additionally, the Statement required that allocation of fixed production overhead to the costs of conversion be based on the normal capacity of the production facilities. Adoption of this Statement did not have a material impact on the Company’s financial position, results of operations or cash flows.

10

6. Goodwill and Other Intangible Assets

Goodwill:

The following table sets forth the change in the carrying amount of goodwill for each reportable segment and for the Company for the period ended March 31, 2006:

	Barnes Distribution			Associated Spring		Barnes Aerospace		Total Company
January 1, 2006	$	124,326		$	80,187	$	30,786	$	235,299
Goodwill acquired, net of adjustments		257			—		—		257
Foreign currency translation		(131	)		1,134		—		1,003
March 31, 2006	$	124,452		$	81,321	$	30,786	$	236,559

In the first quarter of 2006, changes in the goodwill recorded at Barnes Distribution resulted primarily from additional costs related to the 2005 acquisitions of Toolcom and Service Plus Distributors. The purchase price allocations of both acquisitions are subject to the finalization of the valuation of certain assets and liabilities. As a result, preliminary amounts assigned to assets and liabilities are subject to revision in future periods.

Other Intangible Assets:

Other intangible assets consisted of:

		March 31, 2006					December 31, 2005
	Range of Life (Years)	Gross Amount		Accumulated Amortization			Gross Amount		Accumulated Amortization
Amortized intangible assets:
Revenue sharing programs	Up to 30	$	156,150	$	(2,513	)	$	134,000	$	(1,957	)
Customer lists/relationships	10		19,133		(4,223	)		19,133		(3,735	)
Patents, trademarks/trade names	5-30		11,446		(2,927	)		11,446		(2,755	)
Other	4.5-12		3,331		(735	)		3,331		(658	)
			190,060		(10,398	)		167,910		(9,105	)
Foreign currency translation			1,181		—			1,038		—
Unamortized intangible pension asset			4,006		—			4,006		—
Other intangible assets		$	195,247	$	(10,398	)	$	172,954	$	(9,105	)

Amortization of intangible assets is expected to increase from approximately $5,600 in 2006 to $6,500 in 2010.

In March 2006, the Company entered into its eighth aftermarket RSP agreement with a major aerospace customer, General Electric Company (“General Electric”), under which the Company is the sole supplier of certain aftermarket parts to this customer. As consideration for this agreement, the Company agreed to pay a participation fee of $23,000 in two installments. The installments of $7,000 and $16,000 will be paid in July 2006 and December 2006, respectively. Additionally, in March 2006 an adjustment to a previous aftermarket RSP was made which reduced the related intangible asset by $850.

11

7. Business Reorganization

Business reorganization accruals are included in accrued liabilities. In connection with the Barnes Precision Valve acquisition and a plan to streamline its global operations, the Company recorded certain exit costs in 2005 resulting from a plan to reorganize certain business facilities and involuntarily terminate employees. The Company recorded $716 of severance costs as assumed liabilities during 2005, which related primarily to involuntary terminations of salaried and hourly personnel at a U.S. facility. Additional costs related to these actions could amount to as much as $2,500 ($1,500 after-tax) and will be expensed as incurred. During the first quarter of 2006, the Company recorded expense of approximately $200 related to these actions and management anticipates recording approximately $650 of expense in the second quarter of 2006. The reorganization is expected to be completed by the end of 2006.

8. Debt

In the first quarter of 2006, the Company entered into an amended and restated $175,000 revolving credit agreement with 11 participating banks which extended the maturity date to January 11, 2011, added Barnes Group Switzerland GmbH, a wholly owned subsidiary of the Company, as a borrower, decreased the interest rate to LIBOR plus a spread ranging from 0.55% to 1.35% depending on the Company’s debt ratio at the time of the borrowing, and amended various financial and restrictive covenants. Borrowings of Barnes Group Switzerland GmbH are guaranteed by the Company. Pursuant to the agreement, the Company pays a facility fee, calculated on the full amount of the borrowing facility, at a rate ranging from 0.20% to 0.40%, depending on the Company’s debt ratio at the end of each calendar quarter. A new covenant was added to the agreement that requires the Company to maintain a ratio of consolidated senior debt to EBITDA, as defined in the amended and restated revolving credit agreement, of not more than 3.25 times at the end of each fiscal quarter ending on or before September 30, 2007, after which the ratio will decrease to 3.00 times. In addition, the agreement requires the Company to maintain a ratio of Total Debt to EBITDA, as defined in the amended and restated revolving credit agreement, of not more than 4.00 times for each quarter ending on or before September 30, 2007, and thereafter of not more than 3.75 times at the end of any fiscal quarter. The actual ratio at March 31, 2006 was 2.43 times and would have allowed additional borrowings of at least $205,900.

Additionally, on January 11, 2006, the Company amended its 7.66% Senior Notes due November 12, 2007, its 7.80% Senior Notes due November 12, 2010 and its 9.34% Senior Notes due November 21, 2008 (the “Notes”). The amendments conform the restrictive covenants of the Notes with those in the amended and restated revolving credit agreement with respect to permitted acquisitions, restriction on liens, permitted indebtedness, permitted investments and consolidated leverage ratio requirements.

9. Pension and Other Postretirement Benefits

Pension and other postretirement benefits expense consisted of the following:

	Pensions						Other Post- Retirement Benefits
For the three months ended March 31,	2006			2005			2006		2005
Service cost	$	3,151		$	2,783		$	749	$	338
Interest cost		5,255			4,883			1,088		1,115
Expected return on plan assets		(7,815	)		(7,851	)		—		—
Amortization of transition assets		—			(3	)		—		—
Amortization of prior service cost		396			285			225		121
Recognized losses		580			252			236		242
Curtailment		—			(466	)		—		—
Net periodic benefit cost (credit)	$	1,567		$	(117	)	$	2,298	$	1,816

12

10. Information on Business Segments

The following table sets forth information about the Company’s operations by its three reportable business segments:

For the three months ended March 31,	2006			2005
				As Restated
Net Sales
Barnes Distribution	$	124,392		$	113,618
Associated Spring		110,990			109,540
Barnes Aerospace		66,943			53,653
Intersegment sales		(2,474	)		(3,081	)
Total net sales	$	299,851		$	273,730
Operating profit
Barnes Distribution	$	8,953		$	5,160
Associated Spring		10,630			8,619
Barnes Aerospace		8,546			5,244
Total operating profit		28,129			19,023
Interest income		240			145
Interest expense		(4,387	)		(4,167	)
Other expense		(542	)		(252	)
Income before income taxes	$	23,440		$	14,749

The aftermarket RSP agreement entered into in the first quarter of 2006 added $23,000 of intangible assets to the Barnes Aerospace segment assets. See Note 6.

11. Commitments and Contingencies

Product Warranties

The Company provides product warranties in connection with the sale of products. From time to time, the Company is subject to customer claims with respect to product warranties. In 2005, a customer of Associated Spring asserted that the Company was responsible for product warranty liabilities approximating $1,600, which amount included the value of replacement parts and consequential damages. The Company’s stated warranty is limited to replacement parts, the cost of which was not deemed significant. This warranty assertion has been resolved without any additional cost to the Company.

Contingent Payments

In connection with the Toolcom Supplies Ltd. acquisition in August 2005, approximately 2.2 million pounds sterling (approximately $3,800 U.S. Dollars) of the purchase price is payable within two years of the closing date and is contingent upon the occurrence of certain events or the achievement of certain performance targets. Such consideration will be recorded if and when paid.

In connection with the Service Plus Distributors, Inc. acquisition in September 2005, approximately $3,700 of the purchase price is payable within three years of the closing date and is contingent upon the occurrence of certain events or the achievement of certain performance targets. Such consideration will be recorded if and when paid.

13

Income Taxes

In the normal course of business, the Company and its subsidiaries are examined by various tax authorities, including the Internal Revenue Service (the “IRS”). The IRS recently completed its review of the Company for the tax years 2000 through 2002. The IRS has proposed changes to these tax years which could result in a tax cost of approximately $16,500, plus a potential penalty of 20% of the tax assessment plus interest. The Company and its advisors believe the Company’s tax position on the issues raised by the IRS is correct and, therefore, the Company will vigorously defend its position. The Company and its advisors believe the Company will prevail on this issue. Any additional impact on the Company’s liability for income taxes cannot presently be determined, but the Company believes the outcome will not have a material impact on its results of operations, financial position or cash flows.

Acquisition

In March 2006, the Company signed a definitive agreement to acquire all of the outstanding shares of Heinz Hänggi AG, Stanztechnik of Bettlach, Switzerland, (“Heinz Hänggi AG”) a developer and manufacturer of high-precision punched and fine-blanked components for a purchase price of 162,000 thousand Swiss francs (approximately $124,214 U.S. Dollars), of which 122,000 thousand Swiss francs (approximately $93,544 U.S. Dollars) will be paid in cash. The remainder is to be paid in the form of 814,338 shares of Barnes Group Inc. common stock.

12. Subsequent Event

On April 20, 2006, the Company announced that its Board of Directors declared a two-for-one split of the Company’s common stock, in the form of a 100 percent stock dividend. All stockholders of record on May 30, 2006, will receive one additional share of Barnes Group Inc. common stock for each share held on that date. The additional share of common stock will be distributed to stockholders of record in the form of a stock dividend on June 9, 2006. Pro forma net income per share, after giving retroactive effect to the stock split, would be as follows:

	Three months ended March 31,
	2006		2005
Pre-stock split:
Net income per common share – basic	$	.77	$	.49
Net income per common share – diluted		.73		.48
Post-stock split:
Net income per common share – basic	$	.38	$	.25
Net income per common share – diluted		.36		.24

The Company also announced an increase to its quarterly cash common stock dividend to $0.25 per share on a pre-split basis ($0.125 per share on a post-split basis). The cash dividend will be paid on June 9, 2006, to stockholders of record on May 30, 2006.

With respect to the unaudited consolidated financial information of Barnes Group Inc. for the three-month periods ended March 31, 2006 and 2005, PricewaterhouseCoopers LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate report dated May 2, 2006 appearing herein, states that they did not audit and they do not express an opinion on that unaudited consolidated financial information. Accordingly, the degree of reliance on their report should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933, as amended, (the “1933 Act”) for their report on the unaudited consolidated financial information because that report is not a “report” or a “part” of the registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the 1933 Act.

14

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Barnes Group Inc.

We have reviewed the accompanying consolidated balance sheet of Barnes Group Inc. and its subsidiaries as of March 31, 2006, and the related consolidated statements of income and of cash flows for each of the three-month periods ended March 31, 2006 and 2005. This interim financial information is the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 2 to the consolidated financial information, the Company adopted Statement of Financial Accounting Standards No. 123R, Share-Based Payment, effective January 1, 2006.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2005, and the related consolidated statements of income, of stockholders’ equity and of cash flows for the year then ended, management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005 and the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005; and in our report dated February 24, 2006, we expressed unqualified opinions thereon. The consolidated financial statements and management’s assessment of the effectiveness of internal control over financial reporting referred to above are not presented herein. As discussed in Note 2 to the consolidated financial information, the Company adopted Statement of Financial Accounting Standards No. 123R, Share-Based Payment, effective January 1, 2006, and accordingly the accompanying December 31, 2005 balance sheet information reflects adjustments relating to this adoption. We have not audited the accompanying balance sheet information.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Hartford, Connecticut

May 2, 2006

15

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

Please refer to the Overview found in the Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005. This Overview sets forth key management objectives and key performance indicators used by management as well as key industry and economic data tracked by management.

Restatement

All financial information presented has been restated to reflect the Company’s change in accounting for stock-based compensation, as of January 1, 2006, as a result of the adoption of SFAS No. 123R. See Note 2 of the Notes to the Consolidated Financial Statements of this Quarterly Report on Form 10-Q for further discussion of the impact of this restatement.

First Quarter 2006 Highlights

In the first quarter, the Company achieved record sales of $299.9 million, an increase of 9.5% over 2005, driven in large part by organic sales growth, primarily at Barnes Aerospace and Barnes Distribution. Operating income improved 47.8% as a result of profitable sales growth and operational improvements in all three business segments.

Barnes Aerospace entered into its eighth aftermarket RSP with General Electric, further expanding its position for long-term aftermarket sales of aircraft engine parts.

In January 2006, the Company completed a financial restructuring which included a legal reorganization of its international operations and amended its revolving credit facilities. The new structure and amended credit facilities will enable financing of global investments through an efficient deployment of cash worldwide.

In March 2006, the Company signed a definitive agreement to acquire all of the outstanding shares of Heinz Hänggi AG, Stanztechnik of Bettlach, Switzerland, a developer and manufacturer of high-precision punched and fine-blanked components.

RESULTS OF OPERATIONS

Sales

	Three months ended March 31,						$ Change		% Change
(in millions)	2006			2005
Barnes Distribution	$	124.4		$	113.6		$	10.8	9.5	%
Associated Spring		111.0			109.5			1.5	1.3	%
Barnes Aerospace		66.9			53.7			13.2	24.8	%
Intersegment sales		(2.4	)		(3.1	)		0.7	19.7	%
Total	$	299.9		$	273.7		$	26.2	9.5	%

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The Company reported net sales of $299.9 million in the first quarter of 2006, an increase of $26.2 million or 9.5%, over the first quarter of 2005. The sales increase reflected $20.9 million of organic sales growth, including sales from the aftermarket RSPs. All three operating segments contributed to the organic sales growth. In addition, Barnes Distribution reported $5.9 million of incremental sales relating to the 2005 acquisitions of Toolcom and Service Plus Distributors. The strengthening of the U.S. dollar against foreign currencies, primarily in Europe, reduced sales approximately $0.6 million during the first quarter of 2006.

Expenses and Operating Income

	Three months ended March 31,						$ Change		% Change
(in millions)	2006			2005
				As Restated
Cost of sales	$	190.7		$	175.7		$	15.0	8.5	%
% sales		63.6	%		64.2	%
Gross profit	$	109.2		$	98.0		$	11.2	11.5	%
% sales		36.4	%		35.8	%
Selling and administrative expenses	$	81.1		$	79.0		$	2.1	2.7	%
% sales		27.0	%		28.9	%
Operating income	$	28.1		$	19.0		$	9.1	47.8	%
% sales		9.4	%		6.9	%

Operating income was $28.1 million in the first quarter of 2006, an increase of 47.8% over the same period in 2005. All three operating segments contributed to the increase in operating income. Operating income margin improved to 9.4% from 6.9% a year ago.

As a result of the higher sales volume, cost of sales increased 8.5% in the first quarter of 2006 compared with the same period in 2005. The increase in cost of sales was lower than the 9.5% increase in sales and resulted in a 0.6 percentage point improvement in gross margin. Gross profit margins improved by more than one percentage point in Barnes Distribution and Barnes Aerospace while Associated Spring’s margin was up slightly over prior year. The higher gross profit margins in each of the operating segments were driven primarily by higher sales prices and operating efficiencies.

Selling and administrative expenses increased 2.7% in the first quarter of 2006 compared to the same period in 2005. As a result of the higher percentage increase in sales, selling and administrative expenses as a percentage of sales declined from 28.9% in the first quarter of 2005 to 27.0% in the same period of 2006. This decline was due in part to a reduction in stock-based compensation.

Other Income/Expense

Other expenses, net of other income, increased $0.2 million in the first quarter of 2006 compared to the same period of 2005 primarily as result of higher foreign exchange losses. Interest expense increased in the first quarter of 2006, primarily due to higher average borrowings.

Income Taxes

The Company’s effective tax rate for the first quarter of 2006 was 21.2%, compared with 22.0% in the first quarter of 2005 and 20.1% for the full year 2005. The full year 2005 effective tax rate included certain discrete items including the tax impact of the sale of a joint venture and the Singapore Pioneer Status tax benefit related to periods prior to 2005. Excluding these two discrete items, the 2005 effective tax rate would have been 21.9%. The Company expects the tax rate to remain in the low-20% range in the medium term.

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In the normal course of business, the Company and its subsidiaries are examined by various tax authorities, including the IRS. The IRS recently completed its review of the Company for the tax years 2000 through 2002. The IRS has proposed changes to these tax years which could result in a tax cost of approximately $16.5 million, plus a potential penalty of 20% of the tax assessment plus interest. The Company and its advisors believe the Company’s tax position on the issues raised by the IRS is correct and, therefore, the Company will vigorously defend its position. The Company and its advisors believe the Company will prevail on this issue. Any additional impact on the Company’s liability for income taxes cannot presently be determined, but the Company believes the outcome will not have a material impact on its results of operations, financial position or cash flows.

Net Income and Net Income Per Share

	Three months ended March 31,
(in millions, except per share)	2006		2005		$ Change		% Change
			As Restated
Net income	$	18.5	$	11.5	$	7.0	60.5	%
Net income per share:
Basic	$	0.77	$	0.49	$	0.28	57.1	%
Diluted		0.73		0.48		0.25	52.1	%

Basic and diluted net income per share increased in line with the increase in net income. Basic and diluted average shares outstanding increased slightly as a result of shares issued for stock compensation awards. Additionally, diluted average shares outstanding increased due to the increase in the Company’s per share market price.

Financial Performance by Business Segment

Barnes Distribution

	Three months ended March 31,
(in millions)	2006			2005			$ Change		% Change
				As Restated
Sales	$	124.4		$	113.6		$	10.8	9.5	%
Operating profit		9.0			5.2			3.8	73.5	%
Operating margin		7.2	%		4.5	%

Barnes Distribution achieved record sales of $124.4 million in the first quarter of 2006, a 9.5% increase over the first quarter of 2005 as a result of $5.9 million of incremental sales from the 2005 acquisitions of Toolcom and Service Plus Distributors and organic sales growth of $5.1 million. Organic sales grew in large part as a result of further market penetration in the Company’s strategic initiatives in North America, particularly in corporate and Tier II accounts, as well as price increases. Sales were negatively impacted by approximately $0.2 million as a result of the strengthening of the U.S. dollar against foreign currencies.

Barnes Distribution’s operating profit for the first quarter of 2006 increased 73.5% over the same period in 2005 as a result of the higher sales volumes and improved gross margins. Higher selling prices combined with warehouse efficiencies contributed to improvements in gross margins. The year-over-year improvement in operating profit was impacted negatively by higher pension costs of $0.8 million including the 2005 pension curtailment gain of $0.5 million which did not recur in the 2006 period.

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Outlook: Barnes Distribution continues to focus on organic sales growth primarily from its strategic growth initiatives including corporate accounts and Tier II relationships. In addition, management anticipates that the team selling model will continue to contribute to sales growth throughout 2006. The integration of the 2005 acquisitions of Toolcom and Service Plus Distributors is expected to be completed in 2006. Management believes operating profit will improve from 2005 as a result of strategic actions focused on pricing, organic sales growth and operational improvements. Additionally, Barnes Distribution management is striving to increase the percentage of products sourced from the Pacific Rim and Mexico to mitigate any price increases on domestically sourced products. Higher fuel costs may negatively impact operating profits going forward.

Associated Spring

	Three months ended March 31,
(in millions)	2006			2005			$ Change			% Change
				As Restated
Sales	$	111.0		$	109.5		$	1.5	1.3%
Operating profit		10.6			8.6			2.0	23.3%
Operating margin		9.6	%		7.9	%

Associated Spring’s sales for the first quarter were $111.0 million, a 1.3% increase from the first quarter of 2005. The increase resulted from modest growth in the traditional spring operations. Sales from the specialty operations were essentially flat from the first quarter of 2005 excluding the negative impact of foreign currency translation on sales, primarily in Europe, as customers adjusted inventory levels during the first quarter of 2006.

Associated Spring’s first quarter 2006 operating profit was $10.6 million, a 23.3% improvement from the comparable 2005 period, primarily as a result of improved profitability from both the specialty operations and the traditional spring businesses. Operating profit was favorably impacted by price increases from customers, which more than offset raw material cost increases. These positive impacts to operating profit were offset, in part, by higher operating costs, the result of the newly ratified union agreements. The cost of these agreements had a negative impact on operating profit of approximately $0.6 million in the first quarter, but these costs are expected to be largely offset by cost savings during the remainder of 2006.

Outlook: Management expects sales increases from its specialty operations and continues to develop these operations through investments in capacity and geographic expansion. The anticipated acquisition of Heinz Hänggi AG in the second quarter of 2006 is expected to expand Associated Spring’s product scope and geographic presence. Modest growth is expected in the markets served by the traditional spring business including light vehicle, heavy truck and other industrial products. Management continues to focus on profitable sales growth and improving the operational performance of its businesses through the transfer of certain production to lower-cost facilities and other productivity initiatives. Associated Spring continues to manage its exposure to raw material price increases by seeking cost recovery from its customers. The Company will be negotiating additional union labor, pension and healthcare agreements that expire in 2006. Any costs resulting from integrating acquisitions, reorganizing business facilities, raw material price increases, and new labor actions or labor agreements could negatively impact 2006 profit margins.

19

Barnes Aerospace

	Three months ended March 31,
(in millions)	2006			2005			$ Change		% Change
				As Restated
Sales	$	66.9		$	53.7		$	13.2	24.8	%
Operating profit		8.5			5.2			3.3	63.0	%
Operating margin		12.8	%		9.8	%

Barnes Aerospace achieved record sales of $66.9 million in the first quarter of 2006, an increase of 24.8% over the first quarter of 2005. The sales increase reflects growth of 36.8% in aftermarket sales due primarily to the aftermarket RSPs and increased overhaul and repair sales. Sales to original equipment manufacturers (“OEMs”) increased 20.8% on the strength of the OEM backlog. Barnes Aerospace generated orders in the first quarter of 2006 of $72.5 million, which included $38.6 million of commercial orders. The order backlog at Barnes Aerospace at the end of the first quarter of 2006 was a record $274.6 million, up from $269.3 million at December 31, 2005. Approximately 67% of the backlog at March 31, 2006 is expected to be shipped within the next 12 months.

Barnes Aerospace’s first quarter 2006 operating profit was $8.5 million, an increase of 63.0% from the 2005 period. Operating profit was positively impacted by the profit contribution from the highly profitable aftermarket RSPs as well as the sales volume increases in both the overhaul and repair and OEM businesses.

Outlook: Management expects sales at Barnes Aerospace to increase over 2005 on the strength of the aftermarket MRO and RSPs, including the eighth agreement which was signed in the first quarter of 2006, and the flow through of its OEM backlogs. Management is focused on operational improvements and adding capacity to meet increased production demands through the transitioning of certain products to Singapore and investing in state-of-the-art equipment. Additionally, OEM commercial sales are expected to increase as a result of the strong commercial engine market and Barnes Aerospace’s participation in a large commercial engine program. Management continues to seek strategic opportunities to gain market share on new engine programs and within the military market. Aftermarket sales should increase as the repair and overhaul businesses target new repair development and the aftermarket RSP sales increase due to the ramp-up on the new agreements. Operating profits are expected to continue to be positively impacted by the high-margin aftermarket RSPs and solid contributions on the higher expected sales volume in the overhaul and repair and OEM businesses. Management continues to take actions to minimize potential exposure to material shortages and price increases by building inventory buffers of key components to the extent practical and purchasing raw materials in advance of anticipated price increases. Profits could be negatively impacted by raw material prices and availability, and the demands of new product introductions.

LIQUIDITY AND CAPITAL RESOURCES

Management assesses the Company’s liquidity in terms of its overall ability to generate cash to fund its operating and investing activities. Of particular importance in the management of liquidity are cash flows generated from operating activities, capital expenditure levels, dividends, capital stock transactions, effective utilization of surplus cash positions overseas and adequate lines of credit.

The Company’s ability to generate cash from operations in excess of its internal operating needs is one of its financial strengths. Management continues to focus on cash flow and working capital management, and anticipates that operating activities in 2006 will generate significant cash. This operating cash flow may be supplemented with external borrowings to meet near-term organic business expansion and the Company’s current financial commitments. Any future acquisitions are expected to be financed through internal cash, borrowings and equity, or a combination thereof.

20

Cash Flow

	Three months ended March 31,
(in millions)	2006			2005			$ Change
				As Restated
Operating activities	$	(2.5	)	$	(4.4	)	$	1.9
Investing activities		(23.3	)		(5.5	)		(17.8	)
Financing activities		34.1			12.4			21.7
Exchange rate effect		0.1			0.2			(0.1	)
Increase in cash	$	8.4		$	2.7		$	5.7

Operating activities used $2.5 million in cash in the first three months of 2006 compared to a use of $4.4 million in the first quarter of 2005. Compared to the first quarter of 2005, operating cash flows in the 2006 period were positively impacted by the improved operating performance and improved working capital trends. This was offset in part by the increased use of cash to fund incentive compensation payments earned in 2005 which were paid in the first quarter of 2006.

Cash used by investing activities in the first quarter of 2006 increased from the 2005 period due in part to a March 2006 participation fee payment of $12.2 million related to the aftermarket RSPs. At March 31, 2006, the Company has a $37.8 million liability payable in 2006 for participation fees under the aftermarket RSPs which is included in accounts payable and will be paid mainly using cash generated outside of the U.S. In addition, capital expenditures in the first quarter of 2006 were $12.8 million compared to $5.4 million in the first quarter of 2005. The higher level of expenditures in 2006 related primarily to investments made to increase capacity and add state-of-the-art equipment at Barnes Aerospace. For the Company in total, capital expenditures are expected to be in the $30 - $35 million range for the full year 2006.

Cash from financing activities in the first quarter of 2006 included a net increase in borrowings of $37.7 million compared to an increase of $16.2 million in the comparable 2005 period. Proceeds in both periods were used to finance operating activities in the U.S., particularly working capital requirements, as well as to fund capital expenditures and dividends. Total cash used to pay dividends increased in the first quarter of 2006 by $0.6 million over the comparable 2005 period to $5.3 million due to an increase in the dividend per share and in the number of shares outstanding. The quarterly cash dividend will increase to $0.25 per share, pre-stock split, in the second quarter of 2006.

At March 31, 2006, the Company held $36.5 million in cash and cash equivalents, most of which are held outside of the U.S. Since the repatriation of this cash to the U.S. would have adverse tax consequences, the balances remain outside the U.S. to fund future international growth investments, including capital expenditures, acquisitions and aftermarket RSP participation fees. In 2006, the RSP payments as well as the repayment of the outstanding Yen borrowing are expected to be funded with cash generated outside the U.S.

The Company maintains borrowing facilities with banks to supplement internal cash generation. At March 31, 2006, $61.0 million was borrowed at an interest rate of 5.44% under the Company’s $175.0 million borrowing facility which matures in January 2011. The Company had no borrowings under uncommitted short-term bank credit lines at March 31, 2006.

21

Borrowing capacity is limited by various debt covenants in the revolving credit agreement. The most restrictive borrowing covenant requires the Company to maintain a ratio of Total Debt to EBITDA, as defined in the revolving credit agreement, of not more than 4.00 times at March 31, 2006. The ratio requirement will decrease to 3.75 times for any fiscal quarter ending after September 30, 2007. The actual ratio at March 31, 2006 was 2.43 times and would have allowed additional borrowings of at least $205.9 million.

In March 2006, the Company signed a definitive agreement to acquire all of the outstanding shares of Heinz Hänggi AG, Stanztechnik of Bettlach, Switzerland, (“Heinz Hänggi AG”) a developer and manufacturer of high-precision punched and fine-blanked components for a purchase price of 162.0 million Swiss francs (approximately $124.2 million U.S. Dollars), of which 122.0 million Swiss francs (approximately $93.5 million U.S. Dollars) will be paid in cash and financed through the revolving credit facility. The remainder is to be paid in the form of 814,338 shares of Barnes Group Inc. common stock. The acquisition is expected to close in the second quarter 2006.

The Company believes its credit facilities, coupled with cash generated from operations, are adequate for its anticipated near-term requirements.

OTHER MATTERS

Critical Accounting Policies

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant accounting policies are disclosed in Note 1 of the Notes to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005. The most significant areas involving management judgments and estimates are described in Management’s Discussion and Analysis of Financial Conditions and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005. There have been no material changes to such judgments and estimates other than the following change related to stock-based compensation. Actual results could differ from those estimates.

Stock-Based Compensation: The Company accounts for its stock-based employee compensation plans at fair value on the grant date and recognizes the related cost in its statement of operations in accordance with SFAS No. 123R, “Share-Based Payment,” which the Company adopted effective January 1, 2006 utilizing the modified retrospective method. The Company previously accounted for its stock-based employee compensation plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related interpretations. The fair values of stock options are estimated using the Black-Scholes option-pricing model. The fair values of other stock awards are estimated based on the fair market value of the Company’s stock price on the grant date. See Note 2 of the Notes to the Consolidated Financial Statements of this Quarterly Report for further discussion.

EBITDA

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the first quarter of 2006 were $36.8 million compared to $27.8 million in the first quarter of 2005. EBITDA is a measurement not in accordance with generally accepted accounting principles (“GAAP”). The Company defines EBITDA as net income plus income taxes, interest expense and depreciation and amortization which the Company incurs in the normal course of business. The Company does not intend EBITDA to represent cash flows from operations as defined by GAAP, and the reader should not consider it as an alternative to net income, net cash provided by operating activities or any other items calculated in accordance with GAAP, or as an indicator of the Company’s operating performance. The Company’s definition of EBITDA may not be comparable with EBITDA as defined by other companies. Accordingly, the measurement has limitations depending on its use. The Company believes EBITDA is commonly used by financial analysts and others in the industries in which the Company operates and, thus, provides useful information to investors.

22

Following is a reconciliation of EBITDA to the Company’s net income (in millions):

	Three months ended March 31,
	2006		2005
			As Restated
Net income	$	18.5	$	11.5
Add back:
Income taxes		5.0		3.2
Depreciation and amortization		9.0		8.9
Interest expense		4.3		4.2
EBITDA	$	36.8	$	27.8

Forward-looking Statements

This quarterly report may contain certain forward-looking statements as defined in the Private Securities Litigation and Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements. The risks and uncertainties, which are described in our periodic filings with the Securities and Exchange Commission, include, among others, uncertainties arising from the behavior of financial markets; future financial performance of the industries or customers that we serve; changes in market demand for our products and services; integration of acquired businesses; changes in raw material prices and availability; our dependence upon revenues and earnings from a small number of significant customers; uninsured claims; and numerous other matters of global, regional or national scale, including those of a political, economic, business, competitive, regulatory and public health nature. The Company assumes no obligation to update our forward-looking statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no significant change in the Company’s exposure to market risk during the first three months of 2006. For discussion of the Company’s exposure to market risk, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005.

Item 4. Controls and Procedures

Management, including the Company’s President and Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon, and as of the date of, that evaluation, the President and Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective, in all material respects, to ensure that information required to be disclosed in the reports the Company files and submits under the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, is (i) recorded, processed, summarized and reported as and when required and (ii) is accumulated and communicated to the Company’s management, including our President and Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

23

PART II. OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(c) Issuer Purchases of Equity Securities

Period	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid Per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (2)
January 1-31, 2006	—		$	—	—	406,416
February 1-28, 2006	42,401		$	37.39	660	405,756
March 1-31, 2006	26,175		$	39.16	—	405,756
Total	68,576	(1)	$	38.06	660

(1) Other than 660 shares purchased in the first quarter of 2006 which were purchased as part of the Company’s publicly announced plan, all acquisitions of equity securities during the first quarter of 2006 were the result of the operation of the terms of the Company’s stockholder-approved equity compensation plans and the terms of the equity rights granted pursuant to those plans to pay for the related income tax upon issuance of shares. The purchase price of a share of stock used for tax withholding is the market price on the date of issuance.

(2) The program was publicly announced on April 12, 2001 authorizing repurchase of up to 1 million shares of its common stock. During the first quarter of 2006, the Company continued to repurchase shares of its common stock in the open market.

24

Item 6. Exhibits

(a) Exhibits

Exhibit 3	Restated Certificate of Incorporation; Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock; Certificate of Change of Location of registered office and of registered agent, dated December 13, 2002; Certificate of Merger of domestic limited liability company into a domestic company, dated May 19, 2004; and Certificate of Amendment of Restated Certificate of Incorporation of Barnes Group Inc., dated April 20, 2006.
Exhibit 10.1	Share Purchase Agreement between Mr. Eugen Hänggi and Barnes Group Inc., dated March 15, 2006.
Exhibit 10.2	Amendment No. 1 to Second Amended and Restated Revolving Credit Agreement, dated February 8, 2006.
Exhibit 10.3	Amendment No. 4 to Note Agreement, dated February 23, 2006.
Exhibit 10.4	Amendment No. 4 to Note Agreement, dated February 23, 2006.
Exhibit 10.5	Amended Barnes Group Inc. Stock and Incentive Award Plan.
Exhibit 15	Letter regarding unaudited interim financial information.
Exhibit 31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32	Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Barnes Group Inc.
	(Registrant)
Date May 4, 2006	/s/ WILLIAM C. DENNINGER
	William C. Denninger Senior Vice President, Finance Chief Financial Officer (the principal Financial Officer)
Date May 4, 2006	/s/ FRANCIS C. BOYLE, JR.
	Francis C. Boyle, Jr. Vice President, Controller (the principal Accounting Officer)

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EXHIBIT INDEX

Barnes Group Inc.

Quarterly Report on Form 10-Q

For Quarter ended March 31, 2006

Exhibit No.	Description	Reference
3	Restated Certificate of Incorporation; Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock; Certificate of Change of Location of registered office and of registered agent, dated December 13, 2002; Certificate of Merger of domestic limited liability company into a domestic company, dated May 19, 2004; and Certificate of Amendment of Restated Certificate of Incorporation of Barnes Group Inc., dated April 20, 2006.	Filed with this report.
10.1	Share Purchase Agreement between Mr. Eugen Hänggi and Barnes Group Inc., dated March 15, 2006.	Filed with this report.
10.2	Amendment No. 1 to Second Amended and Restated Revolving Credit Agreement, dated February 8, 2006.	Filed with this report.
10.3	Amendment No. 4 to Note Agreement, dated February 23, 2006.	Filed with this report.
10.4	Amendment No. 4 to Note Agreement, dated February 23, 2006.	Filed with this report.
10.5	Amended Barnes Group Inc. Stock and Incentive Award Plan.	Incorporated by reference to Annex 3 to the Company’s Proxy Statement dated March 20, 2006 for the Annual Meeting of Stockholders held April 20, 2006.
15	Letter regarding unaudited interim financial information.	Filed with this report.
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed with this report.
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed with this report.
32	Certification pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Furnished with this report.

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EX-3

Exhibit 3

RESTATED

CERTIFICATE OF INCORPORATION

OF

BARNES GROUP INC.

Barnes Group Inc., having filed its original Certificate of Incorporation with the Secretary of State of the State of Delaware on January 30, 1925 under the name of Associated Spring Corporation of Delaware, thereby forming a corporation under and pursuant to the provisions of the General Corporation Law of the State of Delaware, does hereby restate its Certificate of Incorporation and certify as follows:

FIRST: The name of this corporation is

BARNES GROUP INC.

SECOND: Its principal office in the State of Delaware is located at No. 1209 Orange Street, in the City of Wilmington, County of New Castle. The name and address of its resident agent is The Corporation Trust Company, No. 1209 Orange Street, Wilmington, Delaware.

THIRD: The nature of the business or objects or purposes proposed to be transacted, promoted or carried on are:-

(a) To deal in, purchase, manufacture, hold, own, sell or otherwise dispose of, repair, exchange, import and export, all kinds and varieties of springs and spring beds, wire and wire rope, rivets, screws, bolts, nuts, shanks, and other wares manufactured from metals or alloys, either alone or in combination with leather, paper, wood or other substance; all kinds and varieties of articles composed wholly or in part of metal, leather, paper, wood or other substance; plates made of any kind of metal or alloy by rolling or otherwise manufacturing the same;

(b) To purchase, produce, manufacture, lease, and sell all kinds of stock, tools, machinery, machine supplies, engineering appliances, engineering accessories, goods, wares, and merchandise, necessary or incidental to the manufacture, purchase, sale, storage or repair of the articles hereinbefore mentioned in clause (a);

(c) To produce, manufacture, purchase, sell and deal in manufacturers’ and mill supplies, engines, boilers, machinery, tools, machine shops, electrical supplies and appliances, foundry and factory supplies and hardware of all kinds; and generally to produce, manufacture, buy, sell, exchange and deal in all or any of the above specified products or by-products thereof, and all materials used in the production thereof;

(d) To acquire, buy, hold, mortgage, lease, sell, exchange and convey, for the purpose of carrying on the business of the corporation, any and all property, both real and personal and any interest therein;

(e) To purchase or otherwise acquire, hold, operate under, own, sell, give and receive licenses under, and otherwise deal in patents, patent rights or privileges, inventions, improvements or secret processes, trade marks and trade names, whether or not in any way relating to any of the business aforesaid;

(f) To purchase, subscribe for, or otherwise acquire and hold for investment, or otherwise, or to use, sell, assign, transfer, mortgage, pledge, or otherwise dispose of, any shares of stock, bonds, securities, or other obligations or evidences of indebtedness of this corporation or of any other corporation or association, firm, or individual, or of any government, or of any subdivision thereof, and to aid in any manner any such corporation, association, firm, individual, government or any subdivision thereof, whose shares of stock, bonds, or other obligations are held by this corporation, and to do any other act or thing permitted by law for the preservation, protection, improvement, or enhancement of the value of such shares of stock, bonds, securities, or other obligations, and while the owner thereof to exercise all the rights, powers and privileges of ownership, including the right to vote thereon, so far as the same may be permitted by law;

(g) To borrow money and from time to time to make and issue promissory notes, bills of exchange, bonds, debentures, and other obligations and evidences of indebtedness of all kinds, secured or unsecured, of the corporation for moneys borrowed or in payment for property acquired, or for any of the other objects or purposes of the corporation, or for any of the objects of its business; to secure the same by mortgage or mortgages, or deed or deeds of trust, or pledge, or other lien upon any or all of the property, rights, privileges, or franchises of the corporation wheresoever situated, acquired, or to be acquired; to sell, pledge, or otherwise dispose of any or all debentures, or other bonds, notes and other obligations, in such manner and upon such terms as the Board of Directors may deem judicious, and to guarantee the payment of any dividends upon stocks, or the principal or interest upon bonds, or the contracts or other obligations of any corporation, association, firm, or individual, so far as the same may be permitted by law;

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(h) To conduct its business, so far as permitted by law, in the State of Delaware and other states of the United States and in the territories and District of Columbia, and all dependencies and colonies or possessions of the United States and in foreign countries, and for and in connection with such business to acquire, hold, possess, purchase, lease, sell, mortgage and convey real and personal property, or any interest therein, and to maintain offices and agencies either within or anywhere without the State of Delaware;

(i) To carry on all or any part of the foregoing objects as principal, factor, agent, contractor or otherwise, either alone or in connection with, any person, firm, association, or corporation, in any part of the world, and in general to do any and all things and to exercise any and all such powers as may be incidental to the conduct of the business of the corporation, and in pursuance thereof to exercise all the powers conferred upon the corporation by the General Corporation Law of the State of Delaware, or any other law that may be now or hereinafter applicable to the corporation.

The foregoing clauses shall be construed both as objects and powers, and it is hereby expressly provided that the foregoing enumeration of specific powers shall not be held to limit or restrict in any manner the powers of this corporation.

FOURTH: The total number of shares of all classes of stock which the corporation shall have authority to issue is 63,000,000 shares, consisting of 3,000,000 shares of preferred stock of the par value of $.01 per share and 60,000,000 shares of common stock of the par value of $.01 per share.

Shares of preferred stock may be issued from time to time in one or more series, as may be determined from time to time by the Board of Directors, each of said series to be distinctly designated. All shares of any one series of preferred stock shall be alike in every particular, except that shares of any one series issued at different times may differ as to the dates from which dividends thereon shall be cumulative. The Board of Directors is hereby authorized to fix the dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions), the redemption price or prices, and the liquidation preferences of any wholly unissued series of preferred shares, and any other powers, designations, preferences and relative, participating, optional or other rights of such series, and any qualifications, limitations, or restrictions on any of the rights of such series, and the number of shares constituting any such series and the designation thereof, or any of them; and to increase or decrease the number of shares of any series subsequent to the issue of shares of that series, but not below the number of shares of such series then outstanding. In case the number of shares of any series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series.

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Subject to any rights and privileges granted to the holders of preferred stock by resolution of the Board of Directors pursuant to the provisions of this Article FOURTH, the holders of common stock shall exercise one vote in respect of each share of stock held by them on all matters voted upon by the stockholders; shall be entitled to receive such dividends as may be declared from time to time by the Board of Directors; shall be entitled, upon liquidation or dissolution, to receive all the assets of the corporation, tangible and intangible, of whatever kind available for distribution, remaining after payment of the liquidation preferences granted to any shares of preferred stock, ratably in proportion to the number of shares of common stock held by them; and shall have such other rights and privileges as may be allowed to them by the laws of the State of Delaware.

The amount of the authorized stock of the corporation of any class or classes may be increased or decreased by the affirmative vote of the holders of a majority of the stock of the corporation entitled to vote.

No holder or owner of any shares of stock of the corporation of any class, now or hereafter authorized, at any time shall be entitled as of right, by reason of the holding or ownership of such stock, to subscribe to additional shares of stock (or to obligations convertible into stock) of any class, now or hereafter authorized, which may at any time be issued and disposed of by the corporation. The corporation, from time to time, may issue and dispose of the shares of its stock of any class, now or hereafter authorized, and for such purpose may grant rights or options to subscribe for, purchase or otherwise acquire any shares of such stock, to such person or persons, in such amounts, for such consideration, and on such terms, as the Board of Directors lawfully may determine.

At the discretion of the Board of Directors, any distribution to the stockholders upon the liquidation, dissolution or winding up of the corporation may be in whole or in part in securities or property and the determination of the Board of Directors as to the value of such securities or other property shall be conclusive.

So far as permitted by law, the corporation may acquire or purchase, out of surplus, shares of any class of the outstanding stock of the corporation in such amounts and for such consideration as the Board of Directors may determine. The corporation from time to time may sell or otherwise dispose of treasury stock held by the corporation (that is to say, stock issued and thereafter acquired by the corporation) to such person or persons and in such amounts and for such consideration as the Board of Directors may determine, and no holder or owner of shares of the stock of the corporation at any time shall be entitled as of right, by reason of the holding or ownership of such stock, to acquire any part thereof.

In accordance with this Article FOURTH, the Board of Directors has designated certain shares of preferred stock into a series with the voting powers, preferences, rights, qualifications, limitations and restrictions set forth in the Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock of the corporation filed with the Secretary of State of the State of Delaware on July 25, 1986 which is attached hereto as Exhibit A.

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FIFTH: The number of shares with which the corporation will commence business is ten (10) shares of capital stock, which shares are without nominal or par value.

SIXTH: The corporation is to have perpetual existence.

SEVENTH: The private property of the stockholders shall not be subject to the payment of corporate debts to any extent whatever.

EIGHTH: The Directors of the corporation need not be stockholders thereof.

NINTH: In furtherance, and not in limitation of the powers conferred by statute, the Board of Directors, subject to the provisions of this Certificate of Incorporation, is expressly authorized:

(a) To make and alter the by-laws of the corporation.

(b) To fix the amount to be reserved as working capital over and above its capital stock paid in.

(c) From time to time to determine whether and to what extent, and at what times and places, and under what conditions and regulations, the accounts and books of the corporation (other than the stock ledger), or any of them, shall be open to inspection of stockholders; and no stockholder shall have any right of inspecting any account, book or document of the corporation except as conferred by statute, unless authorized by a resolution of the stockholders or the Board of Directors.

(d) If the by-laws so provide, to designate three or more of its number to constitute an executive committee, which committee shall, to the extent provided in the by-laws of the corporation, have and exercise any or all of the powers of the Board of Directors in the management of the business and affairs of the corporation and have power to cause the seal of the corporation to be affixed to all papers which may require it.

(e) Pursuant to the affirmative vote of the holders of at least two-thirds of the shares of capital stock then issued and outstanding, given at a stockholders’ meeting duly called for that purpose, the Board of Directors shall have power and authority to mortgage, sell, lease or exchange all of the property and assets of the corporation, including its good will and its corporate franchises, upon such terms and conditions as the Board of Directors deem expedient and for the best interests of the corporation.

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(f) Both stockholders and directors shall have power, if the by-laws so provide, to hold their meetings, and to have one or more offices within or without the State of Delaware, and to keep the books of the corporation (subject to the provisions of the statutes), outside of the State of Delaware at such places as may be from time to time designated by the Board of Directors.

(g) Subject to the provisions of this Certificate of Incorporation, the corporation may in its by-laws confer powers upon its directors in addition to the foregoing, and in addition to the powers and authorities expressly conferred upon them by statute.

TENTH: In so far as the same is not contrary to the laws of the State of Delaware, in case the corporation enters into contracts or transacts business with one or more of its Directors, or with any firm of which one or more of its Directors are members, or with any association or other corporation of which one or more of its Directors are directors or officers, such contract or transaction shall not be invalidated or in any wise affected by the fact that such Director or Directors were or may be adversely interested therein, even though the vote of the Director or Directors having such adverse interest shall have been necessary to obligate the corporation upon such contract or transaction, and even though the fact of such adverse interest may not have been disclosed prior to the time when the corporation became obligated thereon; no such Director or Directors shall be liable to the corporation or to any stockholder or creditor thereof or by reason of any such contract or transaction, nor shall such Director or Directors be accountable for any gains or profits realized thereon.

ELEVENTH: Notwithstanding the provisions of paragraph (a) of Article NINTH of this Certificate of Incorporation and any provision of the By-Laws of the corporation, no amendment to this Certificate of Incorporation or to the By-Laws shall amend, alter, change or repeal any of the provisions of Sections 2, 3, 8 or 9 of Article II of the By-Laws or of this Article ELEVENTH unless adopted by the affirmative vote of the holders of not less than two-thirds of the outstanding shares of stock of the corporation entitled to vote in elections of directors, considered for purposes of this Article ELEVENTH as one class.

TWELFTH: 1. In addition to the affirmative vote required by law, the terms of any other Article of this Restated Certificate of Incorporation or otherwise, the approval or authorization of any Business Combination (as hereinafter defined) with any Interested Person (as hereinafter defined) shall require the affirmative vote of the holders of not less than 70 percent of the corporation’s Voting Stock (as hereinafter defined); provided that such 70 percent voting requirement shall not be applicable if both of the following conditions are met:

(a) The cash per share, if any, plus the fair market value (as determined by a majority of the Continuing Directors) of any other consideration to be received per share by the holders of shares of any class of the corporation’s capital stock in conjunction with a Business Combination is not less than the greater of (with appropriate adjustments for any recapitalizations, stock splits, stock dividends and like distributions):

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(i) the highest price per share (including any and all brokerage, soliciting dealer’s or other fees or taxes) paid by the Interested Person to acquire any such shares of the corporation’s capital stock during the period beginning two years prior to such Interested Person’s acquisition of sufficient shares to become an Interested Person and ending immediately prior to the vote of the stockholders upon such Business Combination involving such Interested Person; or

(ii) an amount per share at least equal to the Market Price per share of such shares of the corporation’s capital stock immediately prior to the announcement of such Business Combination involving such Interested Person plus a percentage of such Market Price equal to the highest percentage of premium over the then Market Price paid by the Interested Person (including any and all brokerage, soliciting dealer’s or other fees or taxes) to acquire any such shares of capital stock during the period beginning two years prior to such Interested Person’s acquisition of sufficient shares to become an Interested Person and ending immediately prior to the vote by stockholders upon such Business Combination.

(b) After such Interested Person’s acquisition of such shares which caused it to become an Interested Person but before the consummation of any Business Combination:

(i) such Interested Person has received no benefit directly or indirectly (except proportionately as a stockholder) of any loans, advances, guarantees, pledges or other financial assistance or tax credits or other tax advantages provided by the corporation; and

(ii) such Interested Person has made no major changes in the corporation’s business or capital structure; and

(iii) there has been no reduction in the rate of dividends payable on any class of the corporation’s capital stock except as may have been approved by a majority of the Continuing Directors; and

(iv) such Interested Person has not acquired directly or indirectly any additional newly issued or treasury shares of the corporation’s capital stock from the corporation except as a result of a pro rata stock dividend or stock split; and

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(v) unless otherwise decided by a majority of Continuing Directors, a proxy statement responsive to the requirements of the Securities Exchange Act of 1934, as amended, is mailed to all holders of Voting Stock at least thirty days prior to the vote by stockholders upon such Business Combination for the purpose of soliciting stockholder approval of such Business Combination. Such proxy statement shall contain recommendations in a prominent place, if any have been furnished in writing by the Continuing Directors or any of them, as to the advisability (or inadvisability) of the Business Combination and, if deemed advisable by a majority of the Continuing Directors, an opinion of a reputable investment banking firm as to the fairness (or lack of fairness) of the terms of such Business Combination from the point of view of the holders of Voting Stock other than the Interested Person (such investment banking firm is to be selected by a majority of the Continuing Directors, furnished with all information it reasonably requests and paid a reasonable fee for its services upon receipt by the corporation of such opinion); and

(vi) the consideration offered to the corporation’s stockholders for the consummation of the Business Combination shall be consideration of the same type and kind paid by the Interested Person in the acquisition of Voting Stock by the Interested Person which caused it to become an Interested Person.

2. Notwithstanding any other provisions of this Article, the 70 percent voting requirement shall not apply if the Continuing Directors have by an affirmative vote of at least 66 2/3 percent approved the Business Combination.

3. As used in this Article:

(a) Business Combination means (i) any merger or consolidation of the corporation or any subsidiary (for the purposes of this section 3, subsidiary means any company in which the corporation owns directly or indirectly a majority of any class of equity security) with or into an Interested Person, (ii) any merger or consolidation of an Interested Person with or into the corporation or any subsidiary, (iii) any sale, lease, exchange, transfer or other disposition, including without limitation a mortgage or any other security device, in one transaction or a series of transactions, of all or any Substantial Part (as hereinafter defined) of the assets either of the corporation or of any subsidiary (including without limitation any voting securities of a subsidiary) to an Interested Person, (iv) any sale, lease, exchange, transfer or other disposition in one transaction or a series of transactions, of all or any Substantial Part of the assets of an Interested Person to the corporation or a subsidiary, (v) the issuance or transfer of any securities (other than by way of pro rata distribution to all stockholders) of the corporation or a subsidiary to an Interested Person, (vi) any reclassification of securities (including without limitation a reverse stock split),

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recapitalization, reorganization, merger or consolidation that would have the effect of increasing the voting power of an Interested Person, (vii) any liquidation or dissolution of the corporation or any subsidiary, and (viii) any agreement, contract or other arrangement providing for any of the transactions described in this definition of Business Combination.

(b) Continuing Director means a person who

(i) has been a member of the corporation’s Board of Directors since January 1, 1983; or

(ii) was a director of the corporation prior to the time that such Interested Person acquired ownership of sufficient Voting Stock to become an Interested Person and who continues to serve as a director after such Interested Person became an Interested Person; or

(iii) was a director who has been recommended to directly succeed a Continuing Director or to join the Board of Directors by a majority of the remaining Continuing Directors.

(c) Interested Person means any individual, corporation, partnership or other person or entity (including any group composed of persons and any of their Affiliates or Associates acting pursuant to an agreement, arrangement or understanding to acquire, hold, vote or dispose of any of the corporation’s Voting Stock) which, together with its Affiliates and Associates, at any time Beneficially Owns in the aggregate 5 percent or more of the Voting Stock of the corporation or any subsidiary, and any Affiliate or Associate of any such individual, corporation, partnership or other person or entity. Further and without limitation, any shares of Voting Stock of the corporation or a subsidiary that any Interested Person has the right to acquire pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise, shall be deemed beneficially owned by such Interested Person. The terms Affiliates, Associates, and Beneficially Owns as used herein have the meanings set forth as of January 1, 1983 in Regulations 12B and 13D under the Securities Exchange Act of 1934.

(d) Market Price means (i) the last sale price of the relevant class of the corporation’s capital stock as reported on the composite tape of a national securities exchange on the relevant date, or (ii) if such class of capital stock is not so listed and reported on a national securities exchange, the highest closing asked quotation with respect to a share of such stock during the 30 day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotation System or any system then in use, or (iii) if such class of capital stock is not so listed or quoted, that fair market value determined in good faith by a majority of the Continuing Directors.

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(e) Substantial Part means the lesser of (i) $10,000,000 or (ii) 10 percent or more of the book value of the total assets of the corporation in question as of the end of its most recent fiscal year ending prior to the time the determination is being made.

(f) Voting Stock means all outstanding shares of capital stock of the corporation or another corporation entitled to vote generally in the election of directors and each reference to a proportion of shares of Voting Stock shall refer to such proportion of the votes entitled to be case by holders of shares of Voting Stock.

4. The provisions of this Article TWELFTH shall also apply to a Business Combination with any individual, corporation, partnership or other person or entity which had been an Interested Person, notwithstanding that such individual, corporation, partnership or other person or entity has reduced its stockholdings below 5 percent of the Voting Stock of the corporation.

5. A majority of the Continuing Directors shall have the power and authority to construe and apply any and all of the terms and provisions of this Article TWELFTH on the basis of information known to them after reasonable inquiry.

6. No amendment to this Restated Certificate of Incorporation shall amend, alter, change or repeal any of the provisions of this Article TWELFTH, unless such amendment shall receive the affirmative vote of the holders of not less than 70 percent of the corporation’s Voting Stock; provided that if two-thirds of the Continuing Directors vote to recommend the amendment to the stockholders, such amendment shall only require the affirmative vote of the holders of a majority of the corporation’s Voting Stock.

7. Nothing in this Article TWELFTH shall be deemed or construed to relieve any Interested Person from any fiduciary or other obligation imposed by law.

THIRTEENTH: No action required to be taken or which may be taken at any annual or special meeting of stockholders may be taken by consent in writing without a meeting of stockholders. No amendment to this Certificate of Incorporation or to the By-Laws shall amend, alter, change or repeal any provision of this Article THIRTEENTH unless adopted by the affirmative vote of the holders of not less than two-thirds of the outstanding shares of stock of the corporation entitled to vote in elections of directors, considered for purposes of this Article THIRTEENTH as one class.

FOURTEENTH: A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good

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faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit.

If the General Corporation Law of the State of Delaware is amended to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent authorized by the General Corporation Law of the State of Delaware, as so amended.

Any repeal or modification of this Article shall not adversely affect any right or protection of a director of the Corporation existing hereunder with respect to any act or omission occurring prior to or at the time of such repeal or modification.

This Restated Certificate of Incorporation was duly adopted by the Board of Directors of the corporation in accordance with the provisions of Section 245 of the General Corporation Law of the State of Delaware. It only restates and integrates and does not further amend the provisions of the corporation’s existing Restated Certificate of Incorporation as heretofore amended or supplemented. There is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

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IN WITNESS WHEREOF, Barnes Group Inc. has caused this Restated Certificate of Incorporation to be signed in its corporate name this 17th day of October, 1997.

BARNES GROUP INC.
By	/s/ Theodore E. Martin
	Theodore E. Martin
	President and
	Chief Executive Officer

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CERTIFICATE OF DESIGNATION, PREFERENCES AND

RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

of

BARNES GROUP INC.

Pursuant to Section 151 of the General Corporation Law

of the State of Delaware

We, Wallace Barnes, Chairman of the Board, and John E. Besser, Secretary, of Barnes Group Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:

That pursuant to the authority conferred upon the Board of Directors by the Restated Certificate of Incorporation of the said Corporation, the said Board of Directors on July 16, 1986, adopted a resolution creating a series of 65,000 shares of Preferred Stock designated as Series A Junior Participating Preferred Stock and containing the following voting powers, preferences and relative, participating, optional and other special rights:

Section 1. Designation and Amount. The shares of such series shall be designated as “Series A Junior Participating Preferred Stock” and the number of shares constituting such series shall initially be 65,000, par value $1.00 per share, such number of shares to be subject to increase or decrease by action of the Board of Directors as evidenced by a certificate of designation.

Section 2. Dividends and Distributions.

(A) Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the 15th day of March, June, September, and December in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $5.00 or (b) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by

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reclassification or otherwise), declared on the Common Stock, par value $1.00 per share, of the Corporation (the “Common Stock”) since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Junior Participating Preferred Stock. In the event the Corporation shall at any time after July 16, 1986 (the “Rights Declaration Date”) (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(B) The Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $5.00 per share on the Series A Junior Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof.

2

Section 3. Voting Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights:

(A) Subject to the provision for adjustment hereinafter set forth, each share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(B) Except as otherwise provided herein or by law, the holders of shares of Series A Junior Participating Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

(C) (i) If at any time dividends on any Series A Junior Participating Preferred Stock shall be in arrears in an amount equal to six (6) quarterly dividends thereon, the occurrence of such contingency shall mark the beginning of a period (herein called a “default period”) which shall extend until such time when all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend period on all shares of Series A Junior Participating Preferred Stock then outstanding shall have been declared and paid or set apart for payment. During each default period, all holders of Preferred Stock (including holders of the Series A Junior Participating Preferred Stock) with dividends in arrears in an amount equal to six (6) quarterly dividends thereon, voting as a class, irrespective of series, shall have the right to elect two (2) Directors.

(ii) During any default period, such voting right of the holders of Series A Junior Participating Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders, provided that neither such voting right nor the right of the holders of any other series of Preferred Stock, if any, to increase, in certain cases, the authorized number of Directors shall be exercised unless the holders of ten percent (10%) in number of shares of Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Preferred Stock of such voting right. At any meeting at which the holders of Preferred Stock shall exercise such voting right initially during an existing default period, they shall have the right, voting as a class, to elect Directors to fill such vacancies, if any, in the Board of Directors as may then exist up to

3

two (2) Directors or, if such right is exercised at an annual meeting, to elect two (2) Directors. If the number which may be so elected at any special meeting does not amount to the required number, the holders of the Preferred Stock shall have the right to make such increase in the number of Directors as shall be necessary to permit the election by them of the required number. After the holders of the Preferred Stock shall have exercised their right to elect Directors in any default period and during the continuance of such period, the number of Directors shall not be increased or decreased except by vote of the holders of Preferred Stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with the Series A Junior Participating Preferred Stock.

(iii) Unless the holders of Preferred Stock shall, during an existing default period, have previously exercised their right to elect Directors, the Board of Directors may order, or any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding, irrespective of series, may request, the calling of special meeting of the holders of Preferred Stock, which meeting shall thereupon be called by the President, a Vice-President or the Secretary of the Corporation. Notice of such meeting and of any annual meeting at which holders of Preferred Stock are entitled to vote pursuant to this paragraph (C) (iii) shall be given to each holder of record of Preferred Stock by mailing a copy of such notice to him at his last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than 20 days and not later than 60 days after such order or request or in default of the calling of such meeting within 60 days after such order or request, such meeting may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding. Notwithstanding the provisions of this paragraph (C)(iii), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of the stockholders.

(iv) In any default period, the holders of Common Stock, and other classes of stock of the Corporation if applicable, shall continue to be entitled to elect the whole number of Directors until the holders of Preferred Stock shall have exercised their right to elect two (2) Directors voting as a class, after the exercise of which right (x) the Directors so elected by the holders of Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may (except as provided in paragraph (C)(ii) of this Section 3) be filled by vote of a majority of the remaining Directors theretofore elected by the holders of the class of stock which elected the Director whose office shall have become vacant. References in this paragraph (C) to Directors elected by the holders of a particular class of stock shall include Directors elected by such Directors to fill vacancies as provided in clause (y) of the foregoing sentence.

(v) Immediately upon the expiration of a default period, (x) the right of the holders of Preferred Stock as a class to elect Directors shall cease, (y) the term of any

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Directors elected by the holders of Preferred Stock as a class shall terminate, and (z) the number of Directors shall be such number as may be provided for in the certificate of incorporation or by-laws irrespective of any increase made pursuant to the provisions of paragraph (C)(ii) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in the certificate of incorporation or by-laws). Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining Directors.

(D) Except as set forth herein, holders of Series A Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

Section 4. Certain Restrictions.

(A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not

(i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock;

(ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Junior Participating Preferred Stock;

(iv) purchase or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking on a parity with the Series A Junior Participating Preferred Stock, except in accordance with a

5

purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.

Section 5. Reacquired Shares. Any shares of Series A Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein.

Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the “Series A Liquidation Preference”). Following the payment of the full amount of the Series A Liquidation Preference, no additional distributions shall be made to the holders of shares of Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the “Common Adjustment”) equal to the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph C below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the “Adjustment Number”). Following the payment of the full amount of the Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior Participating Preferred Stock and Common Stock, respectively, holders of Series A Junior Participating Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect to such Preferred Stock and Common Stock, on a per share basis, respectively.

(B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation

6

preferences of all other series of preferred stock, if any, which rank on a parity with the Series A Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock.

(C) In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Junior Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

Section 8. No Redemption. The shares of Series A Junior Participating Preferred Stock shall not be redeemable.

Section 9. Ranking. The Series A Junior Participating Preferred Stock shall rank junior to all other series of the Corporation’s Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise.

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Section 10. Amendment. The Restated Certificate of Incorporation of the Corporation shall not be further amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of two-thirds (2/3) or more of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class.

Section 11. Fractional Shares. Series A Junior Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holders fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock.

IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do affirm the foregoing as true under the penalties of perjury this 24th day of July, 1986.

By	/s/ Wallace Barnes
	Wallace Barnes
	Chairman of the Board

Attest:

By	/s/ John E. Besser
	John E. Besser
	Secretary

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CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED OFFICE

AND OF REGISTERED AGENT

It is hereby certified that:

1. The name of the corporation (hereinafter called the “Corporation”) is Barnes Group Inc.

2. The registered office of the Corporation within the State of Delaware is hereby changed to 9 East Loockerman Street, City of Dover 19901, County of Kent, Suite 1B.

3. The registered agent of the Corporation within the State of Delaware is hereby changed to National Registered Agents, Inc., the business office of which is identical with the registered office of the corporation as hereby changed.

4. The Corporation has authorized the changes hereinbefore set forth by resolution of its Board of Directors.

Signed on 13^th day of December 2002

By	/s/ Signe S. Gates
	Signe S. Gates, Senior Vice President

STATE OF DELAWARE

CERTIFICATE OF MERGER OF

DOMESTIC LIMITED LIABILITY COMPANY

INTO A

DOMESTIC CORPORATION

Pursuant to Title 8, Section 264(c) of the Delaware General Corporation Law and Title 6, Section 18-209 of the Delaware Limited Liability Company Act, the undersigned corporation executed the following Certificate of Merger:

FIRST: The name of the surviving corporation is BARNES GROUP INC., a Delaware Corporation, and the name of the limited liability company being merged into this surviving corporation is KAR PRODUCTS, LLC.

SECOND: The Agreement of Merger has been approved, adopted certified, executed and acknowledge by the surviving corporation and the merging limited liability company.

THIRD: The name of the surviving corporation is BARNES GROUP INC.

FOURTH: The merger is to become effective on the date of filing.

FIFTH: The Agreement of Merger is on file at 123 Main Street, Bristol, Connecticut 06011, the place of business of the surviving corporation.

SIXTH: A copy of the Agreement of Merger will be furnished by the corporation on request, without cost, to any stockholder of any constituent corporation or member of any constituent limited liability company.

SEVENTH: The Certificate of Incorporation of the surviving corporation shall be its Certificate of Incorporation.

IN WITNESS WHEREOF, said Corporation has caused this certificate to be signed by an authorized officer, on the 14th day of May, 2004.

Barnes Group Inc.
By:	/s/ A.Keith Drewett
Name:	A. Keith Drewett
Title:	Vice President

CERTIFICATE OF AMENDMENT

OF THE

RESTATED CERTIFICATE OF INCORPORATION

OF BARNES GROUP INC.

Barnes Group Inc., a Delaware corporation, (the “Corporation”) does hereby certify:

FIRST: The Board of Directors of the Corporation approved and adopted the following resolution for amending the Corporation’s Restated Certificate of Incorporation declaring it advisable, and recommended that the amendment be submitted to the stockholders of the Corporation for their consideration:

RESOLVED, that it is advisable to amend the Company’s Certificate of Incorporation in order to increase the number of shares of authorized Common Stock by amending the first paragraph of Article FOURTH (the remainder of Article FOURTH remaining unchanged) to read as follows:

FOURTH: The total number of shares of all classes of stock which the corporation shall have authority to issue is 153,000,000, consisting of 3,000,000 shares of preferred stock of the par value of $.01 per share and 150,000,000 shares of common stock of the par value of $.01 per share.

SECOND: This Amendment to the Restated Certificate of Incorporation was approved by the stockholders of the Corporation at a meeting in accordance with Section 242 of the General Corporation Law of Delaware.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to the Restated Certificate of Incorporation to be executed by a duly authorized officer this 20th day of April, 2006.

BARNES GROUP INC.
By:	/s/ Signe S. Gates
Name: Title:	Signe S. Gates Senior Vice President, General Counsel and Secretary

EX-10.1

Exhibit 10.1

Final Version

English Translation by Vischer

of the German Original

Share Purchase Agreement

between

Mr. Eugen Hänggi, domiciled at Grafenfelsweg 14, 4500 Solothurn;

(the “Seller”)

and

Barnes Group Inc., 123 Main Street, P.O. Box 489, Bristol, Connecticut 06011-0489, USA, a corporation organized and existing under Delaware law and another company or companies directly or indirectly controlled by it in accordance with Section 13.8;

(the “Buyer”)

regarding 100% of the share capital of

Heinz Hänggi AG, Stanztechnik

(the “Company”)

Table of Contents

1.	DEFINITIONS			5
2.	PURCHASE AND SALE OF THE SHARES			5
2.1		OBJECT OF THE PURCHASE		5
2.2		PURCHASE PRICE		5
3.	ACTIONS BEFORE CLOSING / CONDITIONS			6
3.1		ACTIONS BEFORE CLOSING		6
	3.1.1		General	6
	3.1.2		Filing	6
	3.1.3		Preparation of Certain Financial Statements	7
	3.1.4		Draft of the Closing Memorandum	7
3.2		CLOSING CONDITIONS		8
	3.2.1		Conditions Precedent to the Obligations of each Party	8
	3.2.2		Conditions Precedent regarding the Obligations of the Buyer	10
	3.2.3		Conditions Precedent regarding the Obligations of the Seller	11
	3.2.4		Non-satisfaction / Rescission	12
4.	CLOSING			13
4.1		DATE AND PLACE OF THE CLOSING		13
4.2		CLOSING ACTIONS OF THE SELLER		13
	4.2.1		Shares	13
	4.2.2		Miscellaneous	13
4.3		CLOSING ACTIONS OF THE BUYER		14
	4.3.1		Regarding the Payment of the Purchase Price	14
	4.3.2		Regarding the Delivery of Barnes Group Stock	14
	4.3.3		Miscellaneous	14
5.	BOARD OF DIRECTORS			15
5.1		DISCHARGE OF THE BOARD OF DIRECTORS		15
5.2		NO RECOURSE AGAINST THE BOARD OF DIRECTORS		15
6.	TRANSFER OF BENEFIT AND RISK / RESPONSIBILITY FOR THE MANAGEMENT			15
7.	REPRESENTATIONS AND WARRANTIES OF THE SELLER			15
7.1		GENERAL		15
7.2		EXECUTION AND PERFORMANCE OF THIS AGREEMENT		16
7.3		CORPORATE MATTERS		17
	7.3.1		General	17
	7.3.2		Property	17
	7.3.3		Capital Structure	17
	7.3.4		Minutes of the Shareholders’ Meetings	17
7.4		BALANCE SHEETS AND INCOME STATEMENTS		17
7.5		PROPERTY AND STATE OF THE ASSETS		18
7.6		INTELLECTUAL PROPERTY RIGHTS		19
7.7		EMPLOYEE BENEFIT PLANS		19
7.8		LITIGATION		19
7.9		PERMITS		20
7.10		INSURANCES		20
7.11		CORPORATE BOOKS		20
7.12		SUBSIDIES		20
7.13		GUARANTEES		21

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	7.14		FINDERS FEE		21
	7.15		DISCLOSURE		21
	7.16		NO UNDISCLOSED LIABILITIES		21
	7.17		LIABILITY FOR PRODUCTS AND SERVICES		21
	7.18		REAL ESTATE		21
	7.19		ABSENCE OF CERTAIN CHANGES		22
	7.20		MATERIAL CONTRACTS		22
	7.21		EMPLOYMENT MATTERS		23
	7.22		EFFECT OF SIGNING		24
	7.23		SELLER’S CLAIMS		24
	7.24		CERTAIN PAYMENTS		24
	7.25		INSOLVENCY		25
	7.26		INDEBTEDNESS		25
	7.27		INFORMATION MEMORANDUM		25
	7.28		REGULATION S		25
8		REPRESENTATIONS AND WARRANTIES OF THE BUYER			25
	8.1		CORPORATE MATTERS		25
	8.2		AUTHORITY TO ENTER AND PERFORM THIS AGREEMENT		26
	8.3		FUNDS		26
	8.4		CAPITAL STOCK OF THE BUYER AND SEC DOCUMENTS		26
9		ENFORCEMENT OF WARRANTY CLAIMS			26
	9.1		PRINCIPLE		26
	9.2		REMEDIES OF THE BUYER		27
	9.3		EXCLUSION OF WARRANTY CLAIMS		27
	9.4		THIRD PARTY CLAIMS		28
	9.5		CLAIMS OF THE SELLER		29
10.		PRESCRIPTION / LIMITATION OF CLAIMS FOR REPRESENTATIONS AND WARRANTIES			29
	10.1		PRESCRIPTION OF CLAIMS		29
	10.2		LIMITATION OF CLAIMS		29
	10.3		EXCLUSIVE REMEDIES AND LEGAL CLAIMS		30
	10.4		CLAIMS OF THE SELLER		30
11.		COVENANTS / INDEMNITY			30
	11.1		CONDUCT OF BUSINESS BETWEEN SIGNING AND CLOSING		30
	11.2		NON-COMPETITION AND NON-ENTICEMENT		32
	11.3		NAME OF COMPANY		32
	11.4		INDEMNITY FOR ENVIRONMENTAL CLAIMS		32
	11.5		TERMINATION OF AGREEMENTS		33
	11.6		INDEMNITY FOR TAXES		34
		11.6.1		Compliance with Tax Law	34
		11.6.2		Special Tax Risks	34
	11.7		VIOLATION OF TAX RULINGS		35
	11.8		INFORMATION OF THE BUYER		36
	11.9		RESTRICTIONS ON BARNES GROUP STOCK		36
	11.10		CLOSING ACTIONS		36
	11.11		CLAIMS OF THE BUYER		36
12.		MAXIMUM AGGREGATE LIABILITY			37
13.		MISCELLANEOUS			38
	13.1		CONFIDENTIALITY		38

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	13.2		PUBLIC ANNOUNCEMENTS		39
	13.3		EXPENSES, COSTS AND TURNOVER TAX		39
	13.4		NOTICES		39
	13.5		NO WAIVER		40
	13.6		ENTIRE AGREEMENT / REFERENCES / AMENDMENTS		40
	13.7		SEVERABILITY		40
	13.8		NO ASSIGNMENT; ACCESSION TO CONTRACT		40
	13.9		INTEREST		41
	13.10		NO SET-OFF RIGHTS		41
14.		GOVERNING LAW / ARBITRATION			41
	14.1		GOVERNING LAW		41
	14.2		ARBITRATION		41
		11.9.1		Resale Limitations	50
		11.9.2		Regulation S Compliance	50
		11.9.3		Legends	50

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Preamble

A. Heinz Hänggi AG, Stanztechnik is a share company incorporated under Swiss law with its domicile in Bettlach, Switzerland, and is registered in the share register of the Canton of Solothurn under the number CH-254.3.000.409-4. The Seller is the sole shareholder of the Company and owns 100% of the share capital of the Company having a total nominal value of CHF 300,000, divided into 600 registered shares with a nominal value of CHF 500 per share (the “Shares”).

B. The Seller is registered in the share register as the legal owner of all Shares.

C. The Seller wishes to ensure the continuance of the Business Activities of the Company and the Buyer wishes to continue the Business Activities of the Company and to grant the Company access to a global distribution network. Therefore, the Seller intends to sell the Shares to the Buyer and the Buyer intends to buy the Shares in accordance with the terms of this Agreement.

D. Before the signing of this Agreement, the Buyer was comprehensively informed about the Company and the Business Activities of the Company, in particular about its financial, environmental, tax, legal and insurance situation. The respective information was disclosed (i) in a data room, (ii) in the information memorandum of June 2005 (“Information Memorandum”), (iii) in management presentations and (iv) during site visits in Bettlach. The Buyer has reviewed and analyzed the respective information. In addition, the Buyer had the opportunity to interview the key management of the Company. The list of the written data that the Buyer had access to during the sales procedure is attached to this Agreement as Schedule D.

Now, therefore, the parties hereto agree as follows:

1. Definitions

All capitalized terms have the meaning assigned to them in Annex 1.

2. Purchase and Sale of the Shares

2.1 Object of the Purchase

The Seller sells to the Buyer and the Buyer purchases from the Seller the Shares in accordance with the terms of this Agreement.

2.2 Purchase Price

The purchase price to be paid by the Buyer to the Seller for the Shares is CHF 162,000,000 (the “Purchase Price”). Therefore, the purchase price for one Share is CHF 270,000. In the amount of CHF 122,000,000, the Purchase Price

5

shall be paid in cash and, in the amount of CHF 40,000,000, in the form of 814,338 shares of Barnes Group Inc which have a par value of USD 0.01 (the “Barnes Group Stock”) The value of one share of Barnes Group Inc. corresponds to the average of the Daily Middle-Rates of the thirty stock exchange days from January 27, 2006 to and including March 10, 2006 of Barnes Group Inc.’s shares as traded on the New York Stock Exchange, provided that if prior to the Closing Date the Buyer shall declare a stock dividend or make distributions upon or subdivide, split up, reclassify or combine the Buyer’s common stock or declare a dividend or make a distribution on the Buyer’s common stock in any security convertible into the Buyer’s common stock, appropriate adjustments will be made to the number of shares of the Buyer’s common stock to be delivered to Seller on the Closing Date.

3. Actions before Closing / Conditions

3.1 Actions before Closing

3.1.1 General

Subject to the provisions of this Agreement, the parties agree to use their best efforts that:

(a) the conditions listed in Section 3.2 are fulfilled on or before the Closing Date;

(b) the parties and their Affiliates take all necessary and/or appropriate actions (to the extent possible) to implement the transaction provided for by this Agreement.

The parties shall work closely together and inform each other as soon as possible about each relevant action undertaken before the Closing.

3.1.2 Filing

The parties shall make all filings required pursuant to Section 3.2.1(a) after the execution of this Agreement. No party shall make a filing without the prior consent of the other party (whereby such consent may not be unreasonably withheld or delayed).

In particular, promptly after signing this Agreement, a complete merger control filing shall be made with the German Bundeskartellamt (the “BKartA”). The filing shall by made by the Buyer in its name and in the name of the Seller. The Buyer shall offer the Seller and its advisors the opportunity to participate in meetings with the competent authorities.

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3.1.3 Preparation of Certain Financial Statements

Upon the request of the Buyer, the Seller shall cause the Company, its auditors and its representatives to co-operate with and assist (i) Ernst & Young (“E&Y”) in the compilation and preparation of all relevant statements and restatements of the financial statements of the Company as per December 31, 2004 and December 2005 and of interim financial statements, which are or may be necessary for the Buyer to comply in a timely manner with the reporting and disclosure requirements of the United States Securities and Exchange Commission (“SEC”) and/or the United States Public Company Accounting Oversight (“PCAOB”) and (ii) PricewaterhouseCoopers (“PWC”) in their audit of such financial statements.

The Buyer undertakes to cause itself, its representatives and its auditor to (i) cooperate with and support E&Y and PWC in collecting, preparing and auditing the statements and restatements of the annual financial statements of the Company referred to above; and (ii) instruct E&Y and PwC to perform the above mentioned task as quickly as possible.

In addition, the Seller and the Buyer undertake to provide to E&Y and PWC all relevant information necessary for the preparation and audit of such financial statements.

The Buyer confirms to have instructed E&Y and PwC to enter into a confidentiality agreement with the Company according to which E&Y and PwC do not grant access to the Buyer to any information before the Closing Date that they obtained in connection with the tasks listed in this Section 3.1.3 to the extent such information is not part of the annual financial statements 2004 and 2005 prepared in accordance with US GAAP.

Each party shall bear its own costs in connection with the preparation and audit of the financial statements, all costs and expenses of E&Y and PwC shall be borne by the Buyer irrespective of whether or not the Closing takes place.

3.1.4 Draft of the Closing Memorandum

Not later than three Business Days prior to the anticipated Closing Date, the Seller shall provide the Buyer with the draft of a memorandum that describes the actions pursuant to Sections 3.1 and 3.2 as well as Sections 4.2 and 4.3 and shall serve as evidence for the closing of the transaction provided for by this Agreement (hereinafter the “Closing Memorandum”).

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3.2 Closing Conditions

3.2.1 Conditions Precedent to the Obligations of each Party

The respective obligations of the parties regarding the closing of the transaction contemplated under this Agreement shall be subject to the satisfaction or waiver (where permissible) of the following conditions precedent:

(a) all governmental, administrative or regulatory approvals or notifications as set forth in Annex 3.2.1(a) shall have been obtained or made, respectively, either unconditionally or subject to the satisfaction or compliance, respectively, of certain conditions or commitments required by the relevant authorities (“Governmental Approvals”), such conditions or commitments to be reasonably satisfactory to the parties, or any waiting period and the applicable governmental administrative and/or regulatory laws and regulations shall have expired or shall have been terminated by the competent authorities;

in particular, regarding Germany applies: Within the period of § 40 para. 1 sentence 1 of the merger control act (GWB), BKartA has (i) notified to the filing party the approval of the intended merger or (ii) not notified the entering into a full review procedure (Hauptprüfverfahren); the condition first completed shall be relevant;

in case the BKartA has entered into the full review procedure, within the period of § 40 para. 2 GWB or the period extended in accordance with § 40 para. 2 sentence 4 number 1 GWB, the BKartA, respectively, (i) has notified to the filing party the approval of the intended merger without requirements and conditions and the approval’s effect is not suspended or (ii) has notified the approval of the intended merger with requirements and conditions that are reasonably satisfactory to the parties and the approval’s effect is not suspended or (iii) no prohibition order has been issued; the condition first completed shall be relevant The Parties undertake to agree to an extension of the review period proposed by the BKartA in the full review procedure pursuant to § 40 para. 2 number 1 GWB or to propose to the BKartA through the Buyer such extension in the view of completion of the conditions mentioned.

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(b) no action shall be pending and no order, injunction or decree of any competent court, administrative body or arbitration tribunal exists which prohibits, restrains, impedes or substantially complicates the consummation of the transaction contemplated in this Agreement;

(c) the Seller and the Company have entered into the following agreements and executed the performances provided for in these agreements or taken the following resolutions, respectively;

(i) the transfer of the patents listed in Annex 3.2.1(c)(i) from the Seller to the Company at a purchase price of CHF 2,613,900, plus VAT in the amount of CHF 198,656.40, with effect as of the Closing Date, whereby all respective transaction costs accruing before the Closing Date and Taxes of this transfer, if any, are to be borne by the Seller. The costs of the Company’s registration as new owner of the patents in the relevant patent registries shall be borne or paid, respectively, by the Company. The patent transfer agreement and the invoice shall be subject to the requirements for imput tax deduction in accordance with Art. 37 of the Swiss VAT Act;

(ii) the transfer of the vehicles listed in Annex 3.2.1(c)(ii) from the Company to the Seller at a purchase price of CHF 184,000, including VAT in the amount of CHF 12,996.30;

(iii) repayment of the shareholder’s loan in the amount of CHF 52,882,070 from the Company to the Seller;

(iv) payment of a dividend in the amount of CHF 36,180,104 by the Company to the Seller;

(v) entering into a preliminary contract in accordance with Annex 3.2.1(c)(v) regarding the transfer of the real properties no. 1887 and 1888, plan 50, in Grenchen at a purchase price of CHF 2,429,900 whereby all respective costs of the notary, the public office (Amtsschreiberei) and the land registry costs as well as the real estate transfer tax are to be borne by the Company; all other Taxes of this transfer are to be borne by the Seller;

(vi) transfer of the securities listed in Annex 3.2.1(c)(vi) from the Company to the Seller at a purchase price of CHF 650,000, whereby non-transferable withholding taxes, if any, are to be borne by the Seller;

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(vii) entering into a lease agreement for the garage listed in Annex 3.2.1(c)(vii);

(viii) entering into a consultancy agreement in accordance with Annex 3.2.1(c)(viii);

(ix) entering into a termination agreement in accordance with Annex 3.2.1(c)(ix) regarding (a) the termination of the patent licence agreement between the Seller and the Company with effect as per the Closing Date, (b) the termination of the employment agreement between the Seller and the Company as of the Closing Date, and (c) the termination of the loan agreement referred to in Section 3.2.1(c)(iii) as of the Closing Date.

(d) the Company and the Buyer shall have received a written tax ruling (see Annex 3.2.1(d)) from the Federal Tax Administration and from the competent tax authorities of the Canton of Solothurn pursuant to which the transactions contemplated by Section 3.2.1(c)(i)-(vi) for the purposes of Federal income tax and Cantonal and Municipal taxes comply with the arm’s length principle and pursuant to which a possible transfer of the patents pursuant to Section 3.2.1(c)(i) after the Closing Date by the Company to an other group company or to a third party does not trigger any Taxes of the Seller subject to the compliance with certain conditions;

(e) the Seller and the Buyer shall have received a written tax ruling (see Annex 3.2.1(e)) from the competent tax authorities of the Canton of Solothurn and the Federal Tax Administration pursuant to which there is no partial liquidation if the Buyer complies with certain conditions;

(f) the Company has terminated with effect on or before the Closing Date the accident insurance with Schweizerische Mobiliar Versicherungsgesellschaft dated July 8, 2003 regarding additional benefits in case of accident or sickness of the Seller and the additional accident insurance with Allianz Suisse Versicherung-Gesellschaft dated January 21, 2005 regarding additional benefits in case of accident of the Seller or the Seller has entered into such insurance policies.

3.2.2 Conditions Precedent regarding the Obligations of the Buyer

The respective obligations of the Buyer regarding the performance of the transactions contemplated under this Agreement shall be subject to the satisfaction or waiver (where permissible) of all of the following conditions:

(a) the representations and warranties of the Seller made in this Agreement are in all material respects true and correct on the date on which these representations and warranties of the Seller have been made;

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(b) the Seller shall have complied in all material respects with his obligations under this Agreement on or before the Closing;

(c) between the date of the execution of this Agreement and the Closing Date, there shall have been no events, changes or developments that individually or in the aggregate have had or will have with reasonable probability a Material Adverse Effect, provided that the Buyer hereby waives the satisfaction of this condition in the case the Closing takes place after April 28, 2006;

(d) the six registered mortgage notes in the aggregate amount of CHF 5,500,000, on the Company’s property no. 1246 in Bettlach shall have been transferred and delivered to the Company on the Closing Date;

(e) The completed and audited financial statements as set forth in Section 3.1.3 of this Agreement required to be filed by the Buyer under applicable laws of the United States of America shall have been delivered to the Buyer.

3.2.3 Conditions Precedent regarding the Obligations of the Seller

The respective obligations of the Seller regarding the performance of the transaction contemplated under this Agreement shall be subject to the satisfaction or waiver (where permissible) of the following conditions president:

(a) the representations and warranties of the Buyer made in this Agreement are in all material respects true and correct on the date on which these representations and warranties of the Buyer have been made;

(b) the Buyer shall have complied in all material respects with its obligations under this Agreement on or before the Closing;

(c) between the date of the execution of this Agreement and the Closing Date, there shall have been no events, changes or developments that individually or in the aggregate have had or will have with reasonable probability a Material Adverse Effect, provided that the Seller hereby waives the satisfaction of this condition in the case the Closing takes place after April 28, 2006.

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3.2.4 Non-satisfaction / Rescission

(a) If the provisions provided for in Sections 3.2.1, 3.2.2, 3.2.3 have not been satisfied or waived in writing on or before the Closing Date, the Closing shall be postponed and shall be performed at the latest five Business Days after the satisfaction or waiver of the conditions and at the latest on August 15, 2006 (the “Long Stop Date”).

The parties shall notify each other immediately after becoming aware of circumstances of which it may reasonably be expected that they lead to a non-satisfaction of the conditions listed in Sections 3.2.1, 3.2.2 and 3.2.3. The parties shall enter into good faith negotiations to resolve the adverse circumstances, and each party shall notwithstanding any other provisions of this Agreement at its own cost endeavour to eliminate the adverse circumstances. At any time before the Closing, (i) the Seller and the Buyer together may (where permissible) waive the conditions listed in Section 3.2.1 (in the aggregate or individually), (ii) the Buyer may waive the conditions listed in Section 3.2.2 (in the aggregate or individually) and (iii) the Seller may waive the conditions listed in Section 3.2.3 (in the aggregate or individually).

(b) At any time before the Closing, this Agreement may be cancelled:

(i) by mutual agreement of the Buyer and the Seller;

(ii) by the Seller on the one hand or the Buyer on the other hand if the Closing has not taken place by the Long Stop Date whereby a party shall not have the right to rescind this Agreement whose non-performance of an obligation under this Agreement has caused the failure of the Closing on or before the Long Stop Date;

(iii) by the Seller on the one hand or the Buyer on the other hand if a competent authority has issued a final judgment or a final decision regarding Governmental Approvals which prohibits the transaction.

If this Agreement is rescinded pursuant to Section 3.2.4(b), the parties shall not be liable because of such rescission. However, if such rescission is the result of (i) a wilful or grossly negligent breach by one of the parties of its respective obligations pursuant to Section 3.1.1 or (ii) a wilful non-satisfaction of a condition pursuant to this Agreement, the failing party shall be liable for all damages, losses, costs and expenses which have been caused to the other party because of such failure.

In the case of a rescission of this Agreement in accordance with this Section, this Agreement shall be terminated and shall have no effect except for Sections 3.1.3 (para. 4 and 5),13.1, 13.2, 13.3, 13.4, 14.1 and 14.2.

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4. Closing

4.1 Date and Place of the Closing

The Closing shall take place in the offices of Baker & McKenzie, Zurich, or another location agreed to by the parties. The Closing shall take place on the closing date (the “Closing Date”) which is on April 26, 2006, or, if the conditions pursuant to Sections 3.2.1, 3.2.2, 3.2.3 have not been satisfied or waived (where permissible), on the fifth Business Day (if the parties have not agreed to another date in writing) after the satisfaction - or ,where permissible, the waiver - of the conditions listed in Sections 3.2.1, 3.2.2 and 3.2.3 but at the latest on the Long Stop Date. All conditions that typically are satisfied only at the date of the Closing shall have been satisfied at that date or the Parties must have waived them. If the Seller presents a Closing Disclosure Letter pursuant to Section 4.2.2(a) at the Closing, the Buyer shall have the right to request postponement of the Closing by five days.

The parties undertake to reasonably use their best efforts to close this Agreement as soon as possible. If all conditions set forth in Sections 3.2.1, 3.2.2, 3.2.3 are satisfied or (where permissible) waived, the Parties have a claim for specific performance.

4.2 Closing Actions of the Seller

Pursuant to the terms agreed herein, the Seller shall deliver the following to the Buyer simultaneously with the performance of the closing actions by the Buyer:

4.2.1 Shares

All share certificates which represent 100 per cent of the Shares endorsed in blank.

4.2.2 Miscellaneous

(a) Documents evidencing the satisfaction of the conditions pursuant to Section 3.2.2, in particular written confirmation by the Seller that all conditions precedent regarding the obligations of the Buyer as set forth in Section 3.2.2 are met. If the Seller provides a letter on or before the Closing Date (“Closing Disclosure Letter”) disclosing facts or circumstances that the representations and warranties of the Seller made in this Agreement are not or no longer true and correct on the Closing Date, the Buyer shall have the right to request postponement of the Closing by five days, it being understood that the Closing, in case of such postponement, is still subject to all conditions pursuant to Sections 3.2.1, 3.2.2 and 3.2.3 having been satisfied or waived in accordance with Section 4.1.

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(b) Resignation letters of the auditor and of the persons designated in Schedule 4.2.2(b) (the “Resigning Board of Directors”) with effect as of the Closing Date.

(c) The unanimous written consent of the board of directors of the Company to the transfer of the Shares to the Buyer and to the registration of the Buyer as shareholder in the share register of the Company.

(d) The share register of the Company listing the Buyer as owner of the Shares.

(e) A copy of each power of attorney under which actions pursuant to this Section 4.2 are taken including evidence satisfactory to the Buyer of the signatory power of each person signing on behalf of the Seller.

(f) Bank forms (Bank- und Postcheck-Formulare) facilitating the deletion of the signing authorities of the Seller and Frau Agnes Hänggi effective as of the Closing Date.

4.3 Closing Actions of the Buyer

Pursuant to the terms agreed herein, the Buyer shall deliver the following to the Seller simultaneously with the performance of the closing actions of the Seller:

4.3.1 Regarding the Payment of the Purchase Price

A facsimile letter of UBS AG confirming the payment of a sum in the amount of the Purchase Price, that is CHF 122,000,000 to an account at a Swiss Bank in the name of the Seller to be specified by the Seller not later than five Business Days prior to the Closing Date.

4.3.2 Regarding the Delivery of Barnes Group Stock

Certificates evidencing the Barnes Group Stock, registered in the name of the Seller.

A legal opinion by the General Counsel of the Buyer as to the shares being validly issued, fully paid and non-assessable.

4.3.3 Miscellaneous

A copy of each power of attorney under which actions pursuant to this Section 4.3 are taken including evidence satisfactory to the Seller of the signatory power of each person signing on behalf of the Buyer.

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5. Board of Directors

5.1 Discharge of the Board of Directors

The Buyer shall make sure that immediately after the Closing, the Company holds a general meeting of all shareholders with the agenda item to grant discharge to the Resigning Board of Directors and that all shareholder votes of the Company vote for the discharge of the Resigning Board of Directors, provided only that to the extent the Company may have claims for director’s liability against the Resigning Board of Directors exclusively based on the fact that no minutes of board of directors’ meetings have been executed or kept in the Company, the discharge shall not be granted.

5.2 No Recourse against the Board of Directors

Subject to article 100 para. 1 CO and subject to any claims of the Buyer under or in connection with this Agreement or in connection with the transactions contemplated in this Agreement, the Buyer hereby waives all its claims against the Seller or its spouse in their functions as members of the board of directors or as an employee of the Company existing as of the Closing Date and warrants that the Company as well waives any such claims. Excluded from this waiver are only potential liability claims which are exclusively based on the fact that no minutes of board of directors’ meetings have been executed or kept in the Company.

6. Transfer of Benefit and Risk / Responsibility for the Management

Subject to the terms of this Agreement, the benefit and risk regarding the Shares pass to the Buyer as of the Closing Date. As of the Closing Date, the Buyer assumes, subject to the terms of this Agreement, the full responsibility for the Company including its management and business. It is the understanding of the parties that the earnings of the business year 2006 shall be for the benefit of the Buyer

7. Representations and Warranties of the Seller

7.1 General

The Seller represents and warrants that subject to all limitations in this Agreement, the following declarations, as of the date of the execution of this Agreement and as of the Closing Date, are true and correct. Where any statement in the following representations and warranties is qualified by the expression “to Seller’s best knowledge”, “so far as the Seller is aware” or any similar expression, the Seller is deemed to have knowledge of everything of which the Key Persons have knowledge or ought to have knowledge. If, between signing and the Closing Date, the Seller finds out that a representation and

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warranty qualified by the expression “to Seller’s best knowledge”, “so far as the Seller is aware” or any similar expression is not correct, he shall promptly inform the Buyer about this.

This Section only contains representations and warranties and the Seller does not give any representations and warranties (neither explicit nor implied nor implicit) that are not explicitly listed in Section 7. Any guarantees in the sense of article 111 CO granted by the Seller are exclusively set forth in Section 11. All other claims of the Buyer arising out of or in connection with this Agreement remain reserved.

The Buyer confirms that it has analyzed the Company and the Business Activities of the Company in the course of a comprehensive due diligence and that it has made all the reviews listed in Letter D of the Preamble. The parties agree that the Seller shall not be liable for breaches of representations and warranties under Section 7 in connection with facts or circumstances if they have been actually known to the Buyer, its proxies, agents and/or advisors and if they have been fairly and explicitly disclosed in an Annex or Schedule to this Agreement, or in the data room or in the Closing Disclosure Letter.

The Buyer confirms in particular and without limitation of the foregoing that the Seller has not made and does not make any warranty regarding budget, business plans, business forecasts or other forecasts of financial, technical or business nature in connection with the Business Activities of the Company.

The Seller undertakes (if any claim is made against him in connection with the sale of the Shares to the Buyer) not to make any claim against the Company or any director, officer or employee of the Company on whom the Seller may have relied before agreeing to any terms of this Agreement or authorizing any statement in the Annexes or the Schedules, save where such claim by the Seller results from fraud or gross negligence.

7.2 Execution and Performance of this Agreement

There are no court or administrative decrees or claims or other legal administrative procedures pending or threatened against the Seller or the Company at a court or an administrative body that would limit or prohibit the performance of the transactions contemplated under this Agreement or contain claims for damages and other requests in connection with the performance of the transactions contemplated under this Agreement. This Agreement constitutes legally valid and binding obligations of the Seller that are enforceable in accordance with its terms subject to the mandatory statutory requirements.

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7.3 Corporate Matters

7.3.1 General

The Company is a stock corporation validly incorporated, duly organized and lawfully existing in accordance with Swiss law having its registered domicile in Bettlach, Switzerland. The Company has full corporate power and authority to own or use its respective assets and properties to carry on its business as now being conducted.

The Company does not own, directly or indirectly, other equity or voting interest in any other companies or entities and does not maintain branches or representative offices.

7.3.2 Property

The Seller is the sole legal and beneficial owner and holder of 100% of validly issued Shares of the Company, free and clear of any encumbrances, pre-emption rights and other rights. The Seller is authorized and entitled without limitation to validly sell and transfer such unencumbered and unrestricted ownership of the Shares as per the Closing Date.

7.3.3 Capital Structure

The Company has the share capital listed in Schedule 7.3.3. All the Shares are validly issued and fully paid up to their par value. As of the Closing Date, there are no further share capital, participation or profit certificates, outstanding options, warrants or similar rights and the Company has no obligation to issue such securities.

7.3.4 Minutes of the Shareholders’ Meetings

Schedule 7.3.4 contains a list of all minutes of all shareholders’ meetings of the Company held on or after January 1, 2003. The Seller guarantees that no shareholders’ meeting of the Company has taken any resolutions after January 1, 2003 that are not evidenced in the minutes.

7.4 Balance Sheets and Income Statements

Schedule 7.4 contains copies (i) of the audited balance sheet and income statement of the Company as of December 31, 2003, (ii) the audited balance sheet and income statement of the Company as of December 31, 2004 and (iii) the audited balance sheet and income statement of the Company as of December 31, 2005, in each case, together with the notes and the auditors report (the “Financial Statements”).

The Financial Statements are correct and complete in all material respects and were prepared in accordance with the Accounting Principles and adequately reflect the legally required provisions or reserves for all Taxes. They reflect

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correctly the financial situation of the Company as of the end of period date of the Financial Statements in compliance with the applicable mandatory statutory requirements and of the Accounting Principles and subject to the notes and limitations pursuant to Schedule 7.4.

To the best knowledge of the Seller, except as set forth in Schedule 7.4, the Company does not have any liabilities except for liabilities (i) shown in the Financial Statements, (ii) incurred in the ordinary course of business since December 31, 2005, or (iii) arising from agreements and contracts (other than as a result of the breach by, or the default of, the Company thereunder) that have been entered into by the Company in the ordinary course of business or in connection with transactions contemplated by this Agreement.

7.5 Property and State of the Assets

Except as disclosed in Schedule 7.5.(i) (save for any assets which are not material for the Company and save for non-material assets which have been disposed of in the ordinary course of business between signing and closing of this Agreement and save for assets which have been or will be sold pursuant to Section 3.2.1(c) of this Agreement), the assets that are either owned by the Company or that the Company is entitledto use pursuant to existing rent or lease agreements constitute all of the assets necessary for the continued conduct of the Business Activities of the Company as the same are currently being conducted.

Except as disclosed in Schedule 7.5(ii), and save for assets which have been or will be sold between signing and closing pursuant to Section 3.2.1(c) of this Agreement, the Company owns good and valid title to all material assets. In particular, the Company is the owner of all tools listed in Schedule 7.5(iii).

The assets of the Company are free of any encumbrances (except for encumbrances pursuant to Schedule 7.5(iv) or such encumbrances with which the assets have been encumbered by virtue of law or that are reflected in the Financial Statements). These assets are (except for ordinary wear and tear) in good and operative condition, fully maintained and safe to operate. All inventories of the Company are of a quantity and quality usable and saleable in the ordinary course of business and no part of the inventory of the Company is slow moving, damaged, defective, or obsolete, except to the extent such items of inventory have been written down in accordance with the Accounting Principles, or for which adequate provisions have been provided.

The provisions of this Section 7.5 are not applicable to Intellectual Property Rights and Intellectual Property Rights are no assets in the sense of this Section 7.5.

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7.6 Intellectual Property Rights

Regarding all Intellectual Property Rights that are necessary for the existing Business Activities of the Company, the Company is the owner or, pursuant to an existing licence agreement, the licensee or has a title with equal effect. In particular, as of the Closing Date, the Company is the owner of the patents of the internationally registered patent family “Process and Device for Stamping Holes in flat Workpieces” (as described in WO96/07493) as well as the trademarks, designs and domain names as listed in Schedule 7.6(i) and licensee of the software listed in Schedule 7.6(ii). Schedule 7.6(ii) lists all material license agreements of the Company. To the best knowledge of the Seller, no claims of third parties are pending or threatened against the Company in connection with the Company’s use of the Company’s Intellectual Property Rights.

All due registration fees for the Intellectual Property Rights registered in the name of, or held for the benefit of, the Company and all due licenses are fully paid.

7.7 Employee Benefit Plans

The Company is in compliance with all applicable social security and pension law requirements. Schedule 7.7 contains a list of the pension plans, insurance policies or similar obligations of the Company in connection with employee benefit plans (the “Employee Benefit Plans”). The Employee Benefit Plans of the Company comply in all material respects with applicable law. In addition to the Employee Benefit Plans, there are no other pension plans or similar schemes. The Company has paid all contributions to the Employee Benefit Plans in accordance with applicable laws and regulations and the documents which govern the terms of such plans. All contributions to the Employee Benefit Plans have been paid when becoming due or have been provisioned for accordingly in the Financial Statements.

The Employee Benefit Plans have no claims against the Company other than for the current ordinary contributions and as set out in the Employee Benefit Plans. None of the Employee Benefit Plans has any accumulated funding deficiency on the regulatory basis as per the BVG Law at the Closing Date.

7.8 Litigation

There are neither actions, claims, suits, investigations, inquiries or proceedings pending or threatened against the Company before any court, arbitral tribunal or administrative board, agency or commission which involve a claim by a governmental or regulatory authority, or by a third party, against the Company, nor are there, to Seller’s best knowledge, any facts or circumstances which could give rise to such litigation, and, with the exception of those that have been disclosed to the Buyer in Schedule 7.8, the Seller is not aware of any suits, arbitral or administrative procedures or other investigations or governmental queries that have been threatened against the Company.

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7.9 Permits

The Company has all material approvals and permits that are needed for the continuance of its operations. The Company conducts and has conducted its business in all material respects in compliance with the laws applicable to it.

7.10 Insurances

The Company has entered into the insurance policies listed in Schedule 7.10. There are no claims in connection with existing insurance policies pending. The Company does not violate any of these insurance policies. These insurance policies are in full force and effect and no notice of cancellation with respect to, or disallowance of any claim under, or increase of premium for, any such policy has been received by the Company. All premiums due thereon have been paid in a timely manner in accordance with ordinary business practices.

No material act, omission, misrepresentation or non-disclosure has occurred which makes any of the insurance policies voidable, nor have any circumstances arisen which would render any of these policies void or unenforceable for illegality or otherwise, nor has there been any breach of the terms, conditions and warranties of any of the policies that would entitle insurers to decline to pay all or any part of any claim made under the insurance policies.

There is no claim in an amount exceeding CHF 50,000 outstanding under any of the insurance policies (or under any policies previously held by the Company). All material claims have been settled in full and there are no circumstances which exist which are likely to give rise to such a claim.

All material incidents that occurred and became known before the Closing Date and that could result in a claim under any insurance policy have been notified to the relevant insurers by the Seller.

7.11 Corporate Books

All corporate books and records (including electronically kept records) of the Company including all agreements, contractual information, customer lists, accounting documentation as well as all documents in connection with the VAT (the “Books”) are correct and complete with respect to all relevant matters in connection with all business and financial transactions of the Company. At the Closing Date, all of those books and records will be in the possession of the Company.

7.12 Subsidies

The Company has applied for, received and used all governmental subsidies in compliance with applicable laws and in accordance with all public provisions and regulations. No such payment of a government, in particular no subsidy and/or subvention, has to be reimbursed in connection with this Agreement or for other reasons.

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7.13 Guarantees

The Company has not issued any surety, guarantee or comfort letter in favour of third parties and is neither unconditionally nor conditionally liable for any obligations of third parties.

7.14 Finders Fee

The Company is not obliged vis-à-vis any third party to pay any amount for solicitation of an offer or a similar service in connection with the sale of the Shares.

7.15 Disclosure

All information disclosed by the Seller to the Buyer in the course of the due diligence is true, complete and not misleading. To the best knowledge of the Seller, there are no material facts that have not been disclosed.

7.16 No Undisclosed Liabilities

Apart from the liabilities disclosed in the Financial Statements and in the notes and limitations pursuant to Schedule 7.4, the Company has up to the Closing Date no material liabilities or obligations that result from transactions, actions, missions or facts that exist up to the Closing Date except for:

(i) Liabilities that are shown in the Financial Statements 2005 (including the pertaining notes);

(ii) Liabilities and obligations that have been entered into in the ordinary course of business after the date of the Financial Statements 2005 (whereby no liability is the consequence of a breach of contract, breach of guarantee, breach of law or a law suit); and

(iii) Liabilities and obligations in connection with this Agreement or such that have been disclosed in this Agreement.

7.17 Liability for Products and Services

To the best knowledge of the Seller, third parties have no liability claims against the Company because of products or services delivered by the Company except for customary warranty claims in connection with the delivery of goods.

7.18 Real Estate

The Company is the legal owner of the real estate listed in Schedule 7.18. The description of the real estate in Schedule 7.18 is true and complete.

The property no. 24, plan 1, in Bettlach is in the industrial zone and permits a use in the kind of the Business Activities of the Company.

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7.19 Absence of Certain Changes

Except as set forth in Schedule 7.19, since January 1, 2006 (i) the business of the Company has been carried on in the ordinary course of business consistent with past practice and sound business practice of the industry, (ii) no liabilities or contingent liabilities have been occurred which are to be reflected in the balance sheets or in its notes based on applicable Accounting Principles if the Company would establish accounts as of the date of this Agreement or as of the Closing Date, and (iii) there have not been:

(a) any matters, facts or circumstances which have had or are reasonably likely to have a Material Adverse Effect, provided that the Buyer hereby waives the satisfaction of this condition in the case the Closing takes place after April 28, 2006;

(b) any declaration of dividends or dividend payment (either hidden or expressly), or any distribution of capital income by the Company to the Seller or an Affiliate or any third party except as disclosed in this Agreement;

(c) any increase in the compensation payable by the Company to any of its directors other than in accordance with agreements, collective bargaining arrangements or in the ordinary course of business;

(d) any payment made, or assets transferred, by the Company outside of the ordinary course of business except of those contemplated by this Agreement;

(e) any material change in accounting policies (including without limitation inventory or debt provisioning policy), rebates or trade discounts; or

(f) any commitment to do any of the foregoing.

7.20 Material Contracts

Schedule 7.20(i) contains a list of all contracts material for the business of the Company and in force at the date of signing of this Agreement. None of the contracts, except for such listed in Schedule 7.20(ii), contains unusual conditions (in particular terms of more than two years, notice periods of more than six months, contractual penalties, so called change of control clauses, restrictions for the Company to engage in any line of business or similar contract risks). None of these contracts has been terminated or cancelled and there are no indications that a business partner may terminate the business relationship with the Company as a consequence of the execution of the transactions provided for in this Agreement.

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Schedule 7.20(iii) contains a list of the ten most important customers and suppliers of the Company in the year 2005. To Seller’s best knowledge, there are no grounds or indications that any of these customers and suppliers may terminate their business relationship with the Company.

7.21 Employment Matters

Save as set forth in Schedule 7.21 no employee has a notice period longer than six months nor is there a termination compensation payable for termination on due notice, which would exceed the equivalent of six months’ salary. The employment agreements are substantially - unless disclosed otherwise - on terms as disclosed in Schedule 7.21. Since January 1, 2005, there has been no material change in the number of employees of the Company or in the terms and conditions of their employment or remuneration other than in the ordinary course of business. There are no material salary increases resolved but not yet implemented. There are no employment or benefit agreements, plans or arrangements entitling the employee to severance or other payment upon a change of control of the Company.

The Seller has not given notice of termination to any of the Key Persons, nor received the notice of termination of any Key Person, nor have the Seller and any Key Person entered into a termination agreement.

The Seller has not given notice of termination to any of the Key Persons as set out in Schedule 7.21, nor received the notice of termination of such Key Person, nor have the Seller and such Key Person entered into a termination agreement.

The Company has complied and does comply in all material respects with all obligations imposed on employers pursuant to employment law. The Company is not involved in any pending litigation with any of the relevant trade union, works councils and employee representatives and there is no strike, slowdown or stoppage actually pending or, to Seller’s knowledge, threatened to occur against the Company. No mass dismissals, in particular those which would give rise to any notification to public or governmental or self-regulatory authorities, have been announced since January 1, 2004 or are being planned. There is no dispute between the Company and any of its current or former employee, director or consultant except as disclosed in Schedule 7.21.

Schedule 7.21 contains true and correct information about the senior executive officers and managers of the Company and their respective annual salaries, bonuses and other compensation, including, but not limited to, directors’ fees, and any bonus, incentive or other payments payable to such persons by the Seller or the Company. The financial obligations that have arisen out of any of such bonus or incentive schemes and benefits (including holidays and overtime entitlements) in the last three years are listed in Schedule 7.21.

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No promises or assurances have been communicated to any Key Person regarding any material change to his or her terms of employment or working conditions or regarding the continuance, introduction, increase or improvement of any benefits or any discretionary arrangement or practice and the consummation of the transactions contemplated under this Agreement will not entitle any employee of the Company to severance payment, unemployment compensation or any other form of payment.

7.22 Effect of Signing

Except as set forth in Schedule 7.22, the signing of this Agreement does not, and the consummation of the transactions contemplated herein will not (i) violate any provisions of any law or order of any court or governmental authority binding upon, or applicable to, the Seller, (ii) breach, violate or constitute a default under or an event which would give rise to any right of termination or cancellation, in accordance with the express terms of any agreement to which the Seller or the Company is a party, or by which the Seller or the Company or any of their properties or assets may be bound (iii) violate or conflict with any legal requirement, judgment, order, writ, injunction, decree or other requirement of any court, arbitral tribunal or of any governmental body or agency thereof applicable to the Seller, or the Company or by which any of its properties or assets may be bound, or (iv) except as expressly provided in this Agreement, require any registration or filing by the Seller or the Company with, or any permit, license, exemption, consent, authorization or approval of, or the giving of any notice by the Seller or the Company to, any governmental or regulatory body, agency, commission or authority.

7.23 Seller’s Claims

Except as disclosed in Schedule 7.23, neither the Seller nor an Affiliate has any claims of any nature whatsoever against the Company or any of its directors, agents or employees as per the Closing Date. For the purposes of this Section 7.23, the term “Affiliate” shall also include Seller’s spouse, siblings, brother in law and children.

7.24 Certain Payments

Since January 1, 2000, neither the Company nor any director, officer, agent, or employee of the Company, or any other person associated with or acting for or on behalf of the Company, has directly or indirectly (a) made any contribution, gift, bribe, payoff, influence payment, or kickback to any person, private or public, regardless of form, whether in money, property, or services (i) to obtain favourable treatment in securing business, (ii) to pay for favourable treatment for business secured, (iii) to obtain special concessions or for special concessions already obtained, for or in respect of the Company, or (iv) in violation of any legal requirements, or (b) established or maintained any fund or asset that has not been recorded in the books and records of the Company.

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7.25 Insolvency

No order has been made and no resolution has been passed for the winding-up for reasons of insolvency (including Konkurs, Zwangsliquidation) of the Company or for a provisional liquidator (including Nachlassverfahren, Notstundung) to be appointed in respect of the Company.

7.26 Indebtedness

Schedule 7.26 contains a list of all overdrafts, loans, debentures, acceptance lines or other borrowings or financial facilities as at the Closing Date (the “Facilities”) which are outstanding against third parties or are made available by third parties to the Company in amounts exceeding CHF 100,000 and a list of any guarantee, security or other lien in relation thereto and all material documents relating to the Facilities are listed in Schedule 7.26.

7.27 Information Memorandum

The Seller has made available an Information Memorandum to the Buyer. The Information Memorandum has been prepared with the due care which an enterprise active in the same industry would apply. The factual data used to prepare the Information Memorandum were, at the time when they were collected, to Seller’s knowledge, true and correct in all material respects.

7.28 Regulation S

Annex 7.28 is an integral part of this Section 7.28.

8. Representations and Warranties of the Buyer

The Buyer gives the representations and warranties of this Section 8 as of the date of this Agreement or another date specified in a specific provision of this Section 8 and as of the Closing Date.

The Buyer does not give any warranties (neither explicit nor implied nor implicit) that are not explicitly listed in Section 8 of this Agreement nor does it give any guarantees in this Section 8.

8.1 Corporate Matters

The Buyer has been validly incorporated in accordance with the laws of Delaware and is validly existing and is neither in liquidation nor in composition proceedings or in any other similar procedure. The Buyer has all requisite corporate power and authority to carry on its business as such business is now being conducted.

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8.2 Authority to Enter and Perform this Agreement

The Buyer is authorized to enter into and perform this Agreement. There are no court or administrative decrees or claims or other legal administrative procedures pending or threatened against the Buyer at a court or a administrative body that would limit or prohibit the performance of the transaction contemplated under this Agreement or contain claims for damages and other requests in connection with the performance of the transaction contemplated under this Agreement. Neither the execution nor the delivery of this Agreement results in a breach of any provisions by which the Buyer is bound.

In particular, the Buyer represents that no governmental or securities exchange approvals of its country of domicile are necessary for the signing and closing of this Agreement.

8.3 Funds

The Buyer represents and warrants that it will have as of the Closing Date the necessary funds, respectively, the necessary number of shares of Barnes Group Inc. available to pay the Purchase Price.

8.4 Capital Stock of the Buyer and SEC Documents

Annex 8.4 is an integral part of this Section 8.4.

9. Enforcement of Warranty Claims

9.1 Principle

In case of a breach of a representation or warranty made by the Seller in Section 7 of this Agreement, the Seller shall have the right, at Seller’s cost, within a reasonable period of time to fully restore the Buyer or the Company in the same position they would have been in if the representations and warranties of the Seller in this Agreement had been true and correct and not been violated (restitution in kind) or alternatively the Seller shall have the option to pay damages for non-performance of this Agreement instead. If, and to the extent, such cure cannot be effected, or is not effected within such time period, the Seller shall be liable to the Buyer, irrespective of any fault of the Seller, for any damage, loss, expense or costs (including reasonable expenditures for legal representation) incurred or sustained by the Company or the Buyer to establish the state represented or warranted in the representations and warranties set forth in Section 7. The parties agree that the Seller (i) shall be exclusively liable for the actual damages that the Company or the Buyer incur and (ii) shall under no circumstances be liable for subsequent damages that the Company or the Buyer may suffer (the “Losses”) except for claims of the Buyer for violation of Section 7.3.2 (Property).

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If a representation or warranty of the Seller, which is qualified by the expression “to Seller’s best knowledge”, “so far as the Seller is aware” or any similar expression is actually breached if such representation or warranty would not be so qualified, then, the Buyer may exercise all rights under this Agreement against the Buyer; provided, however, that the Seller shall only be liable for half of the claim the Buyer is entitled to.

9.2 Remedies of the Buyer

If the Buyer wants to enforce a claim for a breach of a representation or warranty pursuant to Section 7 of this Agreement (hereinafter “Buyer’s Claim”), the Buyer shall within 60 Business Days after full discovery of such breach of a representation or warranty of the Seller notify the Seller in writing about the breach including a reasonable detailed description of the breach of contract, to the extent known at that time, including the damages that the Company or the Buyer, respectively, suffered or will suffer because of such breach. Upon the Buyer notifying the Seller in writing about the breach of a representation or warranty of the Seller, the Buyer shall bring an action pursuant to Section 14 of this Agreement within 270 calendar days if the claims made in writing pursuant to the provisions of this Section 9.2 exceed the thresholds defined in Section 10.2 unless the Buyer and the Seller agree in writing on an extension of this time limit before the lapse of this time limit.

Failure to deliver the Buyer’s Claim within the sixty days deadline set forth above shall not exclude the Seller’s liability, provided, however, that the Seller shall not be liable for any damage, loss, expense or cost caused or aggregated by the Buyer’s failure to give duly and timely notice within the sixty days period pursuant this Section 9.2.

Without prejudice to the validity of the Buyer’s Claim, the Buyer shall allow the Seller and its auditors as well as its other advisors to investigate the facts and the circumstances on which the Buyer’s Claim is based and to determine whether there is a potential Buyer’s Claim and what its amount may be. Further, the Buyer shall provide the Seller with such information and support that the Seller reasonably requires.

The procedure provided for in this Section 9.2 shall be in lieu of and to the exclusion of the Buyer’s obligations of immediate examination and notice to the Seller pursuant to article 201 CO.

9.3 Exclusion of Warranty Claims

The Seller shall not be liable for breaches of a representation or a warranty under Section 7 of this Agreement and the Buyer may not make a Buyer’s Claim based on this Agreement if and to the extent that:

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(a) the Buyer’s Claim relates to any matter that has been considered in the Financial Statements in the sense of a provision for doubtful debts or a provision or disclosed in an annex to the Financial Statements;

(b) the Buyer’s Claim is covered by a third party or an insurance policy and could have been asserted;

(c) the payment or rectification of a matter that caused a Buyer’s Claim results in a tax advantage for the Buyer or the Company;

(d) the Buyer’s Claim is caused by a violation of the duty of the Buyer or the Company after the Closing Date to mitigate damages even if the damage is caused by a breach of a warranty made by the Seller in this Agreement;

(e) the Buyer’s Claim is the result of a change in law or of the judicial or administrative practices after the Closing Date, that was not in force at the Closing Date; this shall also apply if and to the extent the above causes have only increased the Buyer’s Claim;

(f) The procedures provided for in Sections 9.2 and/or 9.4 have not been complied with by the Buyer or the Company;

(g) the matter that has caused the Buyer’s Claim has its base in a Material Adverse Effect and this matter has been disclosed to the Buyer in the Closing Disclosure Letter.

The Seller shall not be liable for any Buyer’s Claims if and to the extent the Buyer or the Company have caused such Buyer’s Claim after the Closing Date. When calculating the amount of the Seller’s liability all benefits in connection with the relevant matter shall be considered (set-off of benefits) and the Seller shall not be liable in connection with Buyer’s Claims arising from this Agreement to the extent that the Buyer or the Company or an Affiliate of the Buyer have realized savings or a financial net benefit resulting from the circumstance causing the liability.

9.4 Third Party Claims

In case of any suit or threatened suit against the Company or the Buyer by a third party including governmental bodies or in case the Company or the Buyer is the subject of an inspection or review by the tax authority, which may result in a Buyer’s Claim (the “Third Party Claim”), the Buyer shall notify the Seller immediately about such Third Party Claim, in particular, in connection with tax audits or investigations. The Buyer shall ensure that the Seller receives all documents, information and support in connection with a Third Party Claim and that it has a reasonable possibility to discuss with the Buyer all litigation in connection with a Third Party Claim beforehand and that the Seller is served without delay with copies of all relevant decisions of all governmental bodies.

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In connection with Third Party Claims, there shall be no concessions in the name of the Buyer or the Company and no settlement and no other cessation of the suit without the Seller having given its consent in writing beforehand, which consent shall not be unreasonably withheld or delayed. In addition, the Seller shall be entitled at his sole discretion at its own expense to undertake all necessary steps (or to cause the Buyer or the Company to undertake such steps) that he deems necessary to prevent, defend, appeal, settle or contest a Third Party Claim in the name of the Buyer or the Company, respectively (including the filing of counterclaims against third parties). The Buyer as well as the Company shall give the Seller the necessary information and support provided the Seller demands it and the Seller bears the costs and expenses thereof.

To the extent the Seller has breached a warranty in this Agreement, he shall bear all reasonable costs and expenses that result from the defence of a Third Party Claim as well as the external costs of the Company (attorneys, advisors, courts, etc.).

9.5 Claims of the Seller

The provisions of Sections 9.1 through 9.4 apply mutatis mutandis to claims of the Seller because of violations in connection with warranties of the Buyer.

10. Prescription / Limitation of Claims for Representations and Warranties

10.1 Prescription of Claims

All claims of the Buyer for violations of representations and warranties pursuant to Section 7 of this Agreement shall lapse within eighteen (18) months after the Closing Date. Excluded from this are all claims listed in Section 7.7 (Employee Benefit Plans) of the Buyer whereby the respective claims shall lapse within three (3) months after expiration of the applicable statute of limitations as well as those in Section 7.3.2 (Property) which shall lapse within ten years of the Closing Date (together “Time Limits”).

It is agreed and understood that a Buyer’s Claim pursuant to Section 9.2 is deemed to be made on time if notified to the Seller on or before the date set forth in Section 10.1 whereby the settlement of such claim may take place after the date set forth in Section 10.1 without the claim lapsing pursuant to Section 10.1 if the Buyer initiates a lawsuit within three (3) months of the lapse of the respective Time Limits. The parties explicitly waive all of the obligations of the Buyer pursuant to and in application of article 201 CO.

10.2 Limitation of Claims

The Seller shall not be liable for violations of representations and warranties pursuant to Section 7 of this Agreement if the amount of an individual claim is

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less than CHF 100,000 (the “De Minimis Amount”) and if the aggregate amount of all claims (except for the above de minimis claims that do not exceed the De Minimis Amount in the individual case) is less than CHF 1,000,000 (the “Threshold”), it being understood that if the aggregate amount exceeds CHF 1,000,000 then the Seller shall be liable for the entire amount. The Seller shall not be liable pursuant to this Agreement if and to the extent that the Seller had already been liable pursuant to this Agreement based on the same matter or fact (no “double-dip”).

10.3 Exclusive Remedies and Legal Claims

The parties agree that the remedies and legal claims that the Buyer or the Company shall have vis-à-vis the Seller for violations of representations and warranties of the Seller pursuant to Section 7 of this Agreement shall be governed solely by this Agreement and that only the remedies and legal claims provided for in this Agreement shall be available to the Buyer and the Company. Except for the rights that the Buyer has pursuant to the above Sections 3.2.4 and 9 there shall be no remedies and legal claims, in particular, no right to rescind this Agreement and no right for damages for any kind of breach of warranty (to the exclusion of those explicitly listed in this Agreement) and all remedies and legal claims of the Buyer are explicitly excluded and waived (except for claims based on gross negligence, fraud, and other wilful breaches of contract). In particular and without prejudice to the foregoing, the Buyer explicitly waives the rights in accordance with article 24 or 205 CO or otherwise to rescind this Agreement. The parties agree that the representations and warranties of the Seller are deemed to be the exclusive and specific remedies and legal claims of the Buyer pursuant to Section 9 and subject to the limitations of this Section 10 and that the representations and warranties of the Seller shall not serve to grant to the Buyer remedies and legal claims other than those provided for in this Agreement.

The Buyer hereby confirms that all facts relevant for the Buyer in the sense of article 24 CO are covered by the warranties made by the Seller in Section 7 of this Agreement.

10.4 Claims of the Seller

The provisions of Sections 10.1 through 10.3 and Section 12 apply mutatis mutandis to claims of the Seller because of violations in connection with warranties of the Buyer.

11. Covenants / Indemnity

11.1 Conduct of Business between Signing and Closing

Subject to the other provisions of this Agreement, the Seller shall at all times from the date of this Agreement up to an including the Closing Date cause the

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Company to conduct its operations actively as a going concern in the ordinary course of business and consistent with past practice.

In particular, Seller shall procure that the Company shall only with the prior consent of the Buyer (or, if applicable administrative or regulatory laws do not so permit, prior consultation of Buyer) do or agree to do the following from the date of this Agreement through the Closing Date:

(a) do anything that would materially interfere with the consummation of the transactions contemplated under this Agreement;

(b) make any hiring or material change to the terms of employment of any director, officer or employee of the Company;

(c) form or enter into any material partnership, consortium, joint venture or other incorporated association;

(d) delay payment, change invoicing and payment terms other than consistent with prior business practice;

(e) alter or amend in any manner the articles of incorporation or organization regulations of the Company;

(f) increase, reduce or otherwise change the share capital, or grant any option or conversion rights on the equity of the Company;

(g) enter into, increase or extend any liability under any guarantee or indemnity outside the ordinary course of business, except as contemplated by this Agreement;

(h) sell, encumber or transfer any assets outside the ordinary course of business, except as contemplated by this Agreement;

(i) grant, create or allow to be created any lien over any of its assets other than charges arising by operation of law or in the ordinary course of business;

(j) borrow any money or incur any indebtedness;

(k) incur other liabilities outside the ordinary course of business;

(l) pay, discharge or satisfy any claim, liability or obligation other than in the ordinary course of business;

(m) declare, make or pay any dividend or other distribution (including hidden profit distributions of any kind) with respect to the Shares, except as contemplated by this Agreement;

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(n) terminate, materially amend or enter into any of the material contracts as set forth in Schedule 7.20(i) except as contemplated in this Agreement.

11.2 Non-Competition and Non-Enticement

The Seller agrees that he will not directly or indirectly (including through Affiliates) compete with the Company in activities currently performed by the Company in the areas of subsequent punching, micro punching, fine cutting and converting for a period of ten years within the territory of Switzerland and three years within the territory of the European Union from the Closing Date. All customer data belong exclusively to the Company.

From the date of this Agreement up to three years after the Closing Date, the Seller shall not directly or indirectly solicit or entice away employees of the Company. The Seller undertakes that the Affiliates also comply with this non-enticement provision.

Further, the Seller agrees that he shall not support financially or technically his wife or any relative in a competing business to the extent they are active in a way and during a time period that were not permitted to the Seller.

11.3 Name of Company

The Seller takes notice and agrees that the Company shall have the exclusive right to continue to use the corporate name Heinz Hänggi AG, Stanztechnik.

11.4 Indemnity for Environmental Claims

The Seller will indemnify and will hold harmless the Buyer and the Company for and against any and all liabilities, costs and expenses resulting from, arising out of, or relating to any inaccuracy in the following statements:

(a) Neither the assets used by the Company for its respective operations nor the hazardous materials present on the properties owned or used by the Company are likely to constitute a risk to the environment or human health, due, in particular, to the manufacture, storage, transport, presence or use of toxic or dangerous substances, as long as used according to their purpose and pursuant to legal requirements.

(b) The Company has complied in all material respects with all applicable legal requirements related to the environment (air, water, land and any other matter classed as the “environment”), health and safety (the “Environmental Laws”) relating to the Company, to the business carried on (whether at the date hereof or previously) by it and to the land

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and premises including the properties owned, occupied or used by it at any time in the past.

(c) The Company has obtained in all material respects any and all permits required by Environmental Laws and has complied in all material respects with the terms and conditions of any and all permits made or issued pursuant to or under or required by Environmental Laws, all of which permits are, at the date hereof, in effect, and no circumstances exist, at the date hereof, which will result in a material modification, supervision, revocation or non-renewal of such permits.

(d) In connection with Environmental Laws, there is no material civil, criminal or administrative action, claim, investigation or other proceeding or suit active, pending or threatened against the Company or any of its officers or directors.

(e) There are no contaminated sites or pre-existing conditions (including Altlasten) at any property owned, operated or otherwise used by the Company (irrespective or whether currently or at any time in the past) that could give rise to liability of the Company.

(f) There are no prohibitions, injunctions, restrictions or limitations on the free use or disposal by the Company of any of its movable assets and real property arising from Environmental Laws, and there are no facts or circumstances which may provide a basis for any such prohibition, injunction, restriction or limitation.

(g) No authority, former or existing owner or operator of real estate formerly or currently owned or operated by the Company has or may have a claim against the Buyer or the Company relating to environment or arising from Environmental Laws for the time before the Closing Date and no former or current operation or use of any such real estate could result in a claim arising from Environmental Laws against the Buyer or the Company.

11.5 Termination of Agreements

On or before the Closing Date, the Seller shall have terminated all existing Agreements between the Company and the Seller and/or the Company and Affiliates, if any, of the Seller effective as of the Closing Date – to the exclusion of the Agreements listed in Section 3.2.1 or in Schedule 11.5. The Seller guarantees that the termination of such Agreements does not oblige the Company to pay any compensation for the termination, e.g. termination compensations or any reimbursements because of notice periods that exceed the Closing Date. For the purposes of this Section 11.5, the term “Affiliate” shall also include Seller’s spouse, brother and children.

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11.6 Indemnity for Taxes

11.6.1 Compliance with Tax Law

The Seller will be indemnify and will hold harmless the Buyer and the Company for and against any and all Taxes, liabilities, costs and expenses resulting from, arising out of, or relating to any inaccuracy in the following statements:

(a) Regarding Taxes, the Company has complied with all laws and regulations.

(b) The Company has timely filed all Tax Returns required to be filed pursuant to legal or other binding rules. The information contained in these Tax Returns are in all material respects correct and complete and reflect the Taxes of the Company for the respective period comprehensively.

(c) All Taxes have been paid or will be paid before the Closing Date if they have become due by that date. The Financial Statements 2005 contain provisions for all Taxes of which the connecting factors in the corresponding legislation have materialized on or before December 31, 2005 if such Taxes have not been paid, or, although arisen on or before December 31, 2005, have not become due on or before December 31, 2005

(d) Subject to the agreements listed in Schedule 11.6.1, there are no written tax agreements between the Company or the Seller and the Tax Authorities relating to the Company.

11.6.2 Special Tax Risks

The Seller shall indemnify and hold harmless the Buyer or the Company completely for all Taxes owed or to be borne by the Company and that (i) have arisen before the Closing Date or of which the connecting factors in the corresponding legislation have materialized before the Closing Date and (ii) that are assessed or determined subsequently in a supplementary or criminal tax procedure, or as the consequence of a revision by the Tax Authorities or as an additional charge of value added tax provided such Taxes are not explicitly borne by the Buyer or the Company pursuant to Section 3.2.1(c), 11.7 or 13.3 of this Agreement. If the Taxes are not exclusively based on connecting factors in the corresponding legislation which have materialized before the Closing Date but also relate to the remaining tax or contribution period, respectively, of 2006, the timely allocation shall be pro rata temporis.

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11.7 Violation of Tax Rulings

The Buyer undertakes and guarantees in the sense of article 111 CO (i) that the Purchase Price pursuant to Section 2.2 during the periods granted in the tax rulings attached in Annex 3.2.1(e) will not be refinanced out of the Company, (ii) that it or the Company does not and will not during the periods provided in the tax rulings in Annex 3.2.1(d) and Annex 3.2.1(e) make any transaction or action that could lead to the tax consequences based on an indirect partial or total liquidation at the Seller, and (iii) that during the period granted in the tax ruling attached in Annex 3.2.1(d) the Company will not and the Buyer shall not cause the Company to transfer the patents acquired from the Seller to a group company or a third party at a higher price than agreed in writing with the competent tax authority.

The Buyer will indemnify and will hold harmless the Seller for and against any and all Taxes, liabilities, costs and expenses (except for consequential damages) resulting from, arising out of, or relating to a breach of the guarantees in this Section 11.7.

The Buyer shall not be liable for breaches of the guarantees under this Section 11.7 if and to the extent the claim is caused by a violation of the duty of the Seller to mitigate damages.

If the Tax Authorities conclude that there is an indirect partial or total liquidation or a tax consequence in connection with a transfer of the patents set forth in Annex 3.2.1(c)(i) for which the Buyer shall be liable pursuant to this Agreement, the Seller shall immediately inform the Buyer

The Seller shall not agree to any assessment proposals regarding tax claims relating to an indirect partial or total liquidation or relating to the transfer of a patent without the Buyer’s prior consent, such consent shall be deemed to be given if the Buyer does not object to it in writing within ten Business Days upon Seller’s notice. The Seller as well as the Buyer shall, during the periods provided in the tax rulings in Annex 3.2.1(d) and Annex 3.2.1(e), not submit a preliminary enquiry to the Tax Authorities without the other party’s prior consent. The Buyer or the Seller, respectively, shall not withhold their respective consent without reason or against good faith.

If the Seller fails to notify the Buyer or if the assessment proposal is signed without the Buyer’s prior consent or if a preliminary enquiry is submitted to the Tax Authorities without the Buyer’s prior consent, then, the Seller forfeits his claims against the Buyer in the amount of the tax burden caused thereby.

The Seller’s claims under this Section 11.7 have to be made within six months of the entry into force of the legally binding tax assessment which provides for the Seller for a taxation because of an indirect partial or total liquidation or a

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transfer of a patent as a consequence of a violation by the Buyer of its guarantees under this Section 11.7.

11.8 Information of the Buyer

The Seller shall procure that the Company shall inform the Buyer following the date hereof and through the Closing Date without delay about any material changes in the business, assets and liabilities and prospects of the Company. To the extent permitted by law, the Seller shall furnish to the Buyer such information and operating data with respect to the Company as the Buyer reasonably requests.

11.9 Restrictions on Barnes Group Stock

Annex 11.9 is an integral part of this Section 11.9.

11.10 Closing Actions

The Seller shall and the Buyer shall cause the Company to perform all acts which are necessary for the execution of the agreements listed in Section 3.2.1(d) and those which are necessary pursuant to the agreements pursuant to Section 3.2.1(c) and the terms of this Agreements after the Closing Date.

11.11 Claims of the Buyer

The Seller’s obligations in Section 11.4 (Indemnity for Environmental Claims) and 11.6 (Indemnity for Tax) are non-accessory guarantees of the Seller in the sense of article 111 CO and are valid and enforceable irrespective of any knowledge of the Buyer. The Seller undertakes to fully indemnify the Buyer for a breach of such guarantee and to hold the Buyer harmless for all obligations, costs and expenses.

All claims of the Buyer for a breach of such guarantee (the “Guarantee Claim”) shall survive until five (5) years after the Closing Date or shall lapse within three (3) months after expiration of the applicable statute of limitations, if such expiration occurs five (5) years after the Closing Date, respectively.

Without prejudice to the validity of the Guarantee Claim, the Buyer shall allow the Seller and its auditors as well as its other advisors to investigate the facts and the circumstances on which the Guarantee Claim is based and to determine whether there is a potential Guarantee Claim and what its amount may be. Further, the Buyer shall provide the Seller with such information and support that the Seller reasonably requires.

In case of any suit or threatened suit against the Company or the Buyer by a third party including governmental bodies or in case the Company or the Buyer is the subject of a inspection, audit or review by the Tax Authority, which may result in a Guarantee Claim (the “Third Party Gurantee Claim”), the Buyer shall notify the Seller immediately about such Third Party Gurantee Claim, in

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particular, in connection with tax inspections, audits or reviews. The Buyer shall ensure that the Seller receives all documents, information and support in connection with a Third Party Gurantee Claim and that it has a reasonable possibility to discuss with the Buyer all litigation in connection with a Third Party Gurantee Claim beforehand and that the Seller is served without delay with copies of all relevant decisions of all governmental bodies.

In connection with Third Party Gurantee Claims, there shall be no concessions in the name of the Buyer or the Company and no settlement and no other cessation of the suit without the Seller having given its consent in writing beforehand, which consent shall not be unreasonably withheld or delayed. If the Buyer fails to notify the Seller or if the Buyer fails to seek the Seller’s prior consent to any concession, settlement, or cessation of a suit in case of a Third Party Gurantee Claim, then, the Buyer forfeits its claims against the Seller in the amount of the damages caused by such failure.

The Seller shall not be liable for breaches of the guarantees under, Section 11.4 (Indemnity for Environmental Claims), Section 11.6.1 (Indemnity for Taxes) if and to the extent (a) the fact which is the basis for the breach has been reflected in the Financial Statements 2005 as a specific provision or a specific contingent liability to cover claims relating to these guarantees, or (b) the claim is caused by a violation of the duty of the Buyer or the Company after the Closing Date to mitigate damages.

In connection with a breach of the guarantees pursuant to Section 11.4 (Indemnity for Environmental Claims) and Section 11.6 (Indemnity for Taxes), the Seller shall not be liable for consequential damages.

12. Maximum aggregate liability

The maximum liability of the Seller under this Agreement (including but not limited to the liability of the Seller for breaches of his representations and warranties as well as damages) shall under no circumstances exceed 25% of the Purchase Price. This limitation shall not apply to violations of Section 7.3.2 (Property), Section 11.2 (Non-Competition and Non-Enticement), Section 11.4 (Indemnity for Environmental Claims) and Section 11.6 (Indemnity for Taxes).

The maximum liability of the Buyer and its Subsidiaries under this Agreement (including but not limited to the liability of the Buyer for breaches of his representations and warranties as well as damages) shall under no circumstances exceed 25% of the Purchase Price. This limitation shall not apply to violations of Section 8.3 (Funds), Section 8.4 (Capital Stock of Buyer and SEC Documents), and Section 11.7 (Violation of Tax Rulings) as well as the Seller’s claims in connection with the Buyer’s obligation to pay the Purchase Price.

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13. Miscellaneous

13.1 Confidentiality

Each party shall keep all documents and information regarding the other party or its Affiliates that has been provided by this party or its representative and/or advisor in connection with this Agreement, or the transactions caused thereby, strictly confidential from any other person (to the exclusion of Affiliates or their representatives or advisors) and shall use best efforts to ensure compliance by its Affiliates and their respective representatives and/or advisors; provided (i) that there is a judicial or administrative procedure (including, but not limited to, in connection with obtaining the necessary Governmental Approvals for the transaction provided for in this Agreement) or another legal requirement compelling disclosure or (ii) unless disclosed in an action or proceeding brought by a party in pursuit of its rights or in the exercise of its remedies hereunder. Except are documents and information:

(a) previously already known by the party receiving such documents or information;

(b) already in the public domain (either prior to or after the delivery of such documents or information hereunder) without fault of such receiving party; or

(c) later obtained by the receiving party from another source if the receiving party is not aware that this other source is also under an obligation to another party hereto to keep such documents and information confidential;

provided, however, that following the Closing the foregoing restrictions shall not apply to the use by the Buyer of documents and information delivered by the Seller concerning the Company.

The Parties agree that an English translation of this Agreement and any necessary translation of the Annexes and Schedules of this Agreement may have to be registered with the SEC and thereby disclosed based on the applicable legal provisions of the United States.

In the event that the transactions contemplated hereunder are not consummated, upon the request of the other party, each party shall promptly (under no event later than five Business Days after such request) return or cause to return all copies of documents and information furnished by the other party in connection with this Agreement or the transactions contemplated hereunder. Each party shall ensure that its Affiliates as well as its representatives and/or advisor comply with this request.

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13.2 Public Announcements

Subject to stock exchange laws and regulations or other provisions requiring mandatory publication, the employees and the business partners of the parties as well as the public shall only be informed about the transaction contemplated by this Agreement in an appropriate way and at a date to be determined jointly by the parties. Subject to a prior written agreement the parties shall not publish the transaction contemplated by this Agreement or provisions under this Agreement. The Buyer may without the approval of the Seller make all relevant filings with the SEC under applicable legal provisions in the Unites States of America.

13.3 Expenses, Costs and Turnover Tax

Unless provided otherwise in this Agreement, each party shall bear its own taxes, costs and expenses (including also legal, accounting, auditors’ and other fees) in connection with this Agreement. The Seller and the Buyer shall each bear one half of the Swiss stamp duty, if any. This shall also apply if UBS AG incurs it. The Buyer shall reimburse the Seller and/or, as applicable, UBS AG for any such duties.

13.4 Notices

All notices and other communications relating to this Agreement shall be made in the German language and by registered mail or facsimile with subsequent confirmation by registered mail to the following addresses:

If to the Seller:

Mr. Eugen Hänggi

Grafenfelsweg 14

4500 Solothurn

with a copy to:

UBS AG

Mr. Patrick Löpfe

P.O. Box

CH-8098 Zurich

Fax no. +41 44 235 57 16

If to the Buyer:

Attn. General Counsel

Barnes Group Inc

123 Main Street

P.O. Box 489

Bristol

USA-Connecticut 06011-0489

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with a copy to:

Vischer Attorneys-at-Law

Dr. Jürg Luginbühl

CH-8023 Zurich

Fax Nr. +41 44 254 34 10

Each party may change its address at any time by giving notice to the other party in accordance with the above provision.

13.5 No Waiver

The failure of any of the parties to enforce a provision of this Agreement or any rights with respect thereto shall in no way be considered as a waiver of such provision or right or in any way challenge the validity of this Agreement. The waiver of any claim for breach of this Agreement by a party hereto shall not be considered as a waiver of any claim relating to another prior or subsequent breach.

13.6 Entire Agreement / References / Amendments

This Agreement constitutes the entire Agreement between the party with respect to subject matter hereof and shall supersede all prior Agreements, negotiations, offers and obligations of the parties in connection with the transaction provided for in this Agreement. Besides the provisions contained in this Agreement, there are no further Agreements or guarantees between the parties. All annexes and schedules to this Agreement as well as all documents, that are part thereof, are an integral part of this Agreement.

This Agreement may only be amended by a written agreement validly signed by the Buyer and the Seller.

13.7 Severability

If a provision of this Agreement is or will be partially or wholly invalid or illegal, the validity of this Agreement as such and of the remaining contractual provisions shall not be affected. The invalid or illegal provision shall be replaced by a valid provision that reflects the presumable intentions of the parties or the spirit and purpose of the invalid provision in the context of this Agreement.

13.8 No Assignment; Accession to Contract

Without the prior written consent of the other party, a party shall neither transfer nor assign this Agreement nor any right or obligation arising from this Agreement.

The Buyer may notify the Seller up to the Closing Date in accordance with the provisions of Section 13.4 that the Seller shall perform all not performed obligations arising out of this Agreement vis-à-vis one or more (directly or indirectly) wholly owned subsidiaries of the Buyer designated by the Buyer (the

40

“Subsidiar(y)(ies)”) and that the Buyer will perform all not performed obligations arising out of this Agreement through the Subsidiaries (if the Buyer must not perform the respective obligations itself because of the purpose of the Agreement) whereby (i), in this case, the Buyer and all Subsidiaries shall be jointly and severally liable pursuant to article 143 seq. CO for all obligations of the Buyer in connection with this Agreement, (ii) all representations and warranties (Section 8) as well as guarantees (Section 11.7) that are made by the Buyer hereby are also made by the Subsidiaries and (iii) the realization of the Buyer’s option described in this Section 13.8 shall have no disadvantageous consequences for the Seller.

13.9 Interest

If a party is in default with a payment under this Agreement, this party shall be liable in addition to the owed amount for the interest accruing from the due date until the date of payment of the accrued interest based on an interest rate which is the higher of (i) the 3-months-CHF-LIBOR plus 400 basis points p.a. or (ii) the interest rate provided for in article 104 para. 1 CO.

13.10 No Set-Off Rights

Neither the Buyer nor the Seller shall have the rights to set-off any claims arising from this Agreement.

14. Governing Law / Arbitration

14.1 Governing Law

This Agreement shall be governed by Swiss law.

14.2 Arbitration

Any dispute, controversy or claim arising out of or in relation to this Agreement, including the validity, invalidity, breach or termination thereof, shall be resolved by arbitration in accordance with the Swiss Rules of International Arbitration of the Swiss Chambers of Commerce in force when the notice of arbitration is submitted in accordance with these rules.

The number of arbitrators shall be three; the seat of the arbitration shall be in Zurich; the arbitral proceedings shall be conducted in German.

The non-competition and non-enticement clause pursuant to Section 11.2 of this Agreement may be enforced in an ordinary court.

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Zurich, March 15, 2006	/s/ Eugen Hänggi
	Eugen Hänggi
Zurich, March 15, 2006	/s/ Philip A. Goodrich
	Barnes Group Inc.

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Annex 1

Definitions

“Accounting Principles” shall mean regarding the Company the accounting principles applied by the Company used consistently in the past in compliance with the Swiss Code of Obligations.

“Affiliate” shall mean a physical or juridical entity or a group of persons which control a second person or a group of persons or are controlled under joined control of such person or group of persons. “To control” or “control”, respectively, shall mean all circumstances in which a person or a group of persons have a majority of the voting rights or of the share capital of another person or a group of persons or is otherwise in a position to exercise decisive influence on another person or group of persons.

“Agreement” shall mean this share purchase agreement including all its Annexes and Schedules and pertaining documents.

“Annex” shall mean an annex to this Agreement.

“Barnes Group Stock” have the meaning assigned to such term in Section 2.2.

“Books” shall have the meaning assigned to such term in Section 7.11.

“Business Activities of the Company” shall mean the business activities of the Company in the area of subsequent punching, micro punching, fine cutting and converting as well as all other areas in which the Company is active.

“Business Day” shall mean each day on which the commercial banks in Solothurn and New York City are open for regular business transactions.

“Buyer’s Claim” shall have the meaning assigned to such term in Section 9.2.

“CHF” shall mean Swiss Francs, the legal currency of Switzerland.

“Closing Memorandum” shall have the meaning assigned to such term in Section 3.1.4.

“Closing” shall mean the closing of the transaction contemplated in Section 4.

“Closing Date” shall mean the date of the Closing pursuant to Section 4.1.

“Closing Disclosure Date” shall mean the date of the Closing pursuant to Section 4.2.2(a).

“CO” shall mean the Swiss Code of Obligations, SR 220.

“Company” shall mean Heinz Hänggi AG, Stanztechnik, unterer Einschlag, 2544 Betlach.

“Daily Middle Rate” shall mean the middle rate on a specific day of the maximum rate and the minimum rate of the shares of Barnes Group Inc. listed on the New York Stock Exchange, converted into Swiss Francs at the foreign exchange middle rate of that day.

“De Minimis Amount” shall have the meaning assigned to such term in Section 10.2.

“Employment Benefit Plans” shall have the meaning assigned to such term in Section 7.7.

“Environmental Laws” shall have the meaning assigned to such term in Section 7.10.

“Financial Statements” shall have the meaning assigned to such term in Section 7.4.

“Guarantee Claim” shall have the meaning assigned to such term in Section 11.11.

“Governmental Approval” shall have the meaning assigned to such term in Section 3.2.1(a).

“Information Memorandum” shall have the meaning assigned to such term in Preamble D.

“Intellectual Property Rights” means trade marks, trade names, domain names, designs, patents, copyrights, rights to use software and software components (licenses), database rights, confidential know how, whether or not registered, including all applications relating to these rights, including all rights giving similar protection as the foregoing rights.

“Key Persons” are Eugen Hänggi, Therese Grünewald, Pierre-André Grünewald, Martin Walker, Franz Leuenberger, Manfred Allemann and Hanspeter Schlup.

“Lock-Up Period” shall mean the period commencing on the Closing Date and continuing through the third anniversary of the Closing Date.

“Long Stop Date” shall have the meaning assigned to such term in Section 3.2.4(a).

“Losses” shall have the meaning assigned to such term in Section 9.1.

Material Adverse Effect” shall mean (i) a change in the assets, the liabilities or the financial position of the Company that reduces the value of the Company fundamentally and (ii) if it were inappropriate for the parties considering all circumstances continuing to be bound by this Agreement provided, however, that the following shall not be considered a Material Adverse Effect: (i) a change that results from circumstances which effect the entire Swiss economy or the global economy; (ii) a change that results from circumstances that effect the metal processing supply industry or the markets for cars, electronics, watches, machines, construction of automates or the industry for consumer products or for medicinal technology; (iii) a change that results from foreign exchange rate changes; (iv) a change that results from the announcement or the execution of this Agreement; (v) a change that directly results from actions of a party in connection with the performance of its obligations under this Agreement.

“Purchase Price” shall have the meaning assigned to such term in Section 2.2.

“Regulation S” shall mean Rules 901 through 905 promulgated under the Securities Act, as the same shall be amended from time to time, and the interpretations of the SEC thereof.

“Resigning Board of Directors” shall have the meaning assigned to such term in Section 4.2.2(b).

“Schedule” shall mean a schedule to this Agreement.

“Section” shall mean a section of this Agreement.

“Securities Act” shall mean the United States Securities Act of 1933, as amended.

“Shares” shall have the meaning assigned to such term in Preamble A in this Agreement.

“Subsidiar(y)(ies)” shall have the meaning assigned to such term in Section 13.8.

“Taxes” shall mean all tax liabilities including income taxes and profit taxes, tax on assets and capital, value added taxes, stamp duties, withholding taxes, social security contributions and similar taxes and duties, including customs duties, that have to be paid to any competent tax authority in any jurisdiction as well as all related interests and penalties and reasonable costs and expenses.

“TAX AUTHORITY”/“TAX AUTHORITIES” shall mean any authorities entrusted with the assessment, control and payment of Taxes, including appellate authorites on all levels.

“TAX RETURN”/“TAX RETURNS” shall mean any declarations made in an assessment or in payment proceedings for Taxes towards Tax Authorities.

“Third Party Claim” shall have the meaning assigned to such term in Section 9.4.

“Third Party Guarantee Claim” shall have the meaning assigned to such term in Section 11.11.

“Threshold” shall have the meaning defined in Section 10.2.

“Time Limits” shall have the meaning assigned to such term in Section 10.1.

Annex 3.2.1(a)(i)

Governmental Approvals

None except for Germany, cf. Section 3.1.2 and 3.2.1(a) of the Agreement

ANHANG 3.2.1(C)(I)

Patent Familie-Übertragungsvertrag zwischen Eugen Hänggi, Unterer Einschlag, CH-2544 Bettlach, MWSt-Nr. 439 237 - nachstehend “Eugen Hänggi” - und Heinz Hänggi AG, Stanztechnik, Unterer Einschlag, CH-2544 Bettlach, MWSt-Nr. 182 458 - nachstehend “Heinz Hänggi AG” -

Patent Family Transfer Agreement between Eugen Hänggi, Unterer Einschlag, CH-2544 Bettlach, VAT-Nr. 439 237 - hereinafter “Eugen Hänggi” - - and Heinz Hänggi AG, Stanztechnik, Unterer Einschlag, CH-2544 Bettlach, VAT-Nr. 182 458 - hereinafter “Heinz Hänggi AG” -

Präambel Eugen Hänggi ist der alleinige Erfinder der Erfindung “Verfahren und Einrichtung zum Stanzen von Löchern in flache Werkstücke.” Diese in WO96/07493 (PCT Veröffentlichungsnummer) beschriebene Erfindung ist Gegenstand einer Reihe nationaler Patente, wobei Eugen Hänggi als alleiniger Erfinder und Eigentümer aller Registrierungen der betreffenden Patentfamilie eingetragen ist. Die Heinz Hänggi AG möchte alle Rechte an und aus der vorgenannten Patentfamilie erwerben und Eugen Hänggi ist bereit, sämtliche Rechte daran an die Heinz Hänggi AG zu übertragen. Vor diesem Hintergrund vereinbaren die Parteien, was folgt:

Preamble WHEREAS, Eugen Hänggi is the sole inventor of the invention “Process and Device for Stamping Holes in flat Workpieces.” WHEREAS, this invention is described in WO96/07493 (PCT Publication Number) and subject to several national patents and Eugen Hänggi is recorded as sole inventor and sole applicant in all relevant registrations of the concerning patent family. WHEREAS, Heinz Hänggi AG wishes to acquire the said patent family including all rights deriving therefrom and Eugen Hänggi is interested in transferring all rights and titles to the said patent family to Heinz Hänggi AG; NOW, THEREFORE, the parties agree as follows:

1. Übertragung   Vorbehaltlich Ziff. 4 hierunter, überträgt Eugen Hänggi hiermit sämtliche der Patentfamilie “Verfahren und Einrichtung zum Stanzen von Löchern in flache Werkstücke” WO96/07493 (PCT Veröffentlichungsnummer) zugehörigen nationalen oder übernationalen Registrierungen einschliesslich der damit zusammenhängenden Rechte zu einem Preis von CHF 2’613’900.— (zwei Millionen sechshundert dreizehn tausend neunhundert Schweizer Franken), zuzüglich schweizerischer Mehrwertsteuer im Betrag von CHF 198’656.40. Allfällige weiteren Steuern sind von Eugen Hänggi zu tragen. Die mit der Transaktion im Zusammenhang stehenden Registergebühren trägt die Heinz Hänggi AG.   Die Übertragung umfasst alle sich im Besitz von Eugen Hänggi befindlichen Dokumente, welche mit der Anmeldung oder Aufrechterhaltung der vorgenannten Patentfamilie in Zusammenhang stehen.   Eugen Hänggi bestätigt, dass insbesondere die in Anhang 1 aufgeführten Patenteintragungen zur Patentfamilie gehören, die Gegenstand der Übertragung unter diesem Vertrag ist.   Die Heinz Hänggi AG übernimmt hiermit diese Registrierungen und Rechte zum genannten Preis.   1. Transfer   Subject to section 4. herein, Eugen Hänggi herewith transfers for CHF 2’613’900.— (two million six hundred thirteen thousand nine hundred Swiss Francs) plus Swiss Value Added Tax in the amount of CHF 198’656.40 all rights and titles in relation to the patent family “Process and Device for Stamping Holes in flat Workpieces”; WO96/07493 (PCT Publication Number) to Heinz Hänggi AG. Eugen Hänggi bears all other taxes in connection with this transaction. Heinz Hänggi AG pays all fees incurring in connection with the notification of the transfer of ownership with the relevant patent offices.   The transfer covers all documents that are in the possession of Eugen Hänggi which are related to the application or maintenance of the above mentioned patent family.   Eugen Hänggi confirms that, particularly, the patent registrations listed in Annex 1 belong to the patent family subjected to the transfer under this Agreement.   Heinz Hänggi AG herewith acquires these titles and rights at the agreed price.

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2. Eintragung des neuen Eigentümers in Patentregistern nach Unterzeichnung des Vertrages	2. Recording of New Owner in Patent Registries after Execution of Agreement
Nach der Unterzeichnung dieses Vertrages ist die Heinz Hänggi AG verpflichtet, dafür besorgt zu sein, dass sie in sämtlichen involvierten Patentregistern als neue Eigentümerin der übertragenen Patente eingetragen wird. Die damit verbundenen Kosten gehen zu Lasten der Heinz Hänggi AG. Eugen Hänggi wird die Heinz Hänggi AG bei der Umsetzung dieses Vertrages unterstützen, und auf Verlangen der Heinz Hänggi AG sämtliche dafür notwendigen Handlungen vornehmen und Unterlagen/Erklärungen unterzeichnen, insbesondere jene in Anhang 1 und Anhang 2.	After the execution of this agreement, Heinz Hänggi AG is obliged to see to it that the entries in all involved patent registries are amended to show Heinz Hänggi AG as the new owner of the assigned patents. The costs associated therewith shall be borne by Heinz Hänggi AG. Eugen Hänggi will assist the Heinz Hänggi AG in implementing this Agreement and will take all appropriate actions and execute all necessary documents/declarations upon request by Heinz Hänggi AG, particularly the documents/declarations in Annex 1 and Annex 2.
3. Anwendbares Recht und Gerichtsstand	3. Governing Law and Venue
Dieser Vertrag und sämtliche damit zusammenhängenden Streitigkeiten stehen unter Schweizer Recht. Die zuständigen Gerichte der Stadt Solothurn, Schweiz sind ausschliesslich für sämtliche mit diesem Vertrag zusammenhängenden Streitigkeiten zuständig. Im Falle von Divergenzen zwischen der deutschen und der englischen Fassung dieses Vertrags ist die deutsche massgeblich.	This Agreement and all disputes arising out of or in connection with this Agreement shall be governed by the laws of Switzerland. The competent courts of the city of Solothurn, Switzerland, shall have exclusive jurisdictions over any disputes arising out of or in connection with this Agreement. In the case of a discrepancy between the German and the English version of this Agreement, the German version shall be relevant.

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4. Inkrafttreten   Dieser Vertrag tritt am Datum seiner Unterzeichnung in Kraft. 4. Effective Date   This Agreement shall be effective as of the signing date indicated below.

Annex 1: Declaration of Assignment

Annex 2: Assignment of U.S. Patent

Date/Place:	Date/Place:
Datum/Ort:	Datum/Ort:
Eugen Hänggi	Heinz Hänggi AG, Stanztechnik
	Name:

4

ANNEX 1

to Patent Transfer Agreement re “Process and Device for Stamping Holes in flat Workpieces”

Declaration of ASSIGNMENT / Abtretungserklärung

Eugen Hänggi, Unterer Einschlag, CH-2544 Bettlach (the “ASSIGNOR”), hereby confirms having assigned and transferred to Heinz Hänggi AG, Stanztechnik, Unterer Einschlag , CH-2544 Bettlach (the “ASSIGNEE) all rights to and in connection with any and all Patents in respect of the invention Process and Device for Punching Holes in Flat Workpieces, as described in the international application WO96/07493. Particularly, this assignment and transfer comprises the registrations listed below. The ASSIGNEE shall be entitled to cause the change of ownership established by such assignment and transfer in all relevant patent registers at its own cost. This Declaration of Assignment shall be effective as of the signing date indicated below.

Eugen Hänggi, Unterer Einschlag, CH-2544 Bettlach (der “ABTRETENDE”), bestätige hiermit alle Rechte an und aus den Patenten an der Erfindung Verfahren und Einrichtung zum Stanzen von Löchern in flache Werkstücke, gemäss Beschreibung in der internationalen Anmeldung WO96/07493, an Heinz Hänggi AG, Stanztechnik, Unterer Einschlag, CH-2544 Bettlach (der “EMPFÄNGER”) abgetreten und übertragen zu haben. Die Abtretung und Übertragung umfasst insbesondere alle in der untenstehenden Liste aufgeführten Registrierungen. Der EMPFÄNGER ist berechtigt, den mit der Abtretung und Übertragung einhergehende Rechtsinhaberwechsel in allen relevanten Patentregistern auf eigene Kosten zur Eintragung zu bringen. Diese Abtretungserklärung tritt mit Datum ihrer Unterzeichnung in Kraft.

No. / Nr.	Patent publication no. / Patentveröffentlichungsnummer	Countries / Länder	Title / Titel
1	EP 0781177	AT, CH, DE, ES, FR, GB, IT, SE	Verfahren und Einrichtung zum Stanzen von Löchern in flache Werkstücke
2	US 6009787	USA	Process and device for punching holes in flat workpieces
3	JP 3623965	JP	Verfahren und Einrichtung zum Stanzen von Löchern in flache Werkstücke

Place and Date /

Ort und Datum:                                         

Signature/Unterschrift:
	Eugen Hänggi

ANNEX 2

to Patent Transfer Agreement re “Process and Device for Stamping Holes in flat Workpieces”

ASSIGNMENT OF U.S. Patent

WHEREAS, Eugen Hänggi, Unterer Einschlag, Bettlach, Switzerland, CH-2544 (herein called the “UNDERSIGNED”) has made an invention and has executed the United States patent application No. 08/793,608 for this invention, which resulted in the grant of the United States Patent No. 6,009,787 dated January 4, 2000 which is entitled:

Process and Device For Punching Holes in Flat Workpieces

WHEREAS, Heinz Hänggi AG, Stanztechnik (herein called “ASSIGNEE”), a corporation organized under the laws of Switzerland, and having an office and place of business at Unterer Einschlag, Bettlach, Switzerland, CH-2544, wishes to acquire the entire right, title and interest in and to said United States Patent;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the UNDERSIGNED hereby assigns and transfers to the ASSIGNEE, its successors and assigns, the entire right, title and interest in and to the said United States Patent, and the UNDERSIGNED hereby authorizes and requests the Commissioner of Patents to record all changes caused by this assignment or transfer in the relevant patent register.

The UNDERSIGNED hereby agrees that the UNDERSIGNED will make, execute and deliver (without charge but at the expense of the ASSIGNEE) any and all other instruments in writing including any and all further affidavits, assignments and other documents.

IN WITNESS WHEREOF, by providing his signature below, the UNDERSIGNED causes this Assignment to be duly executed and effective as of the signing date indicated below:

Place and Date:                                         

Eugen Hänggi:                                                              

Annex 3.2.1(c)(ii)

PURCHASE AGREEMENT

between

Heinz Hänggi AG, Stanztechnik, Unterer Einschlag, 2544 Bettlach

(“Seller”)

and

Eugen Hänggi, Grafenfelsweg 14, 4500 Solothurn

(“Purchaser”)

PREAMBLE

The Seller is the owner of the cars Range Rover 4.2. V8 SL and BMW X5 4.6 si. The Purchaser and his wife, respectively, are already in possession of these cars. The Purchaser intends to purchase these cars and the Seller intends to sell him these cars. Now therefore, the Parties agree as follows:

1. OBJECT OF PURCHASE AND PURCHASE PRICE

1.1 Object of Purchase

The Seller sells to the Purchaser the following second hand cars:

• Range Rover 4.2. V8 SL, with the chassis number SALLMAMA441172056, as well as 4 winter tires as accessory.

• BMW X5 4.6 si, with the chassis number WBAFB910X0LN98276, as well as 4 winter tires as accessory.

1.2 Purchase Price

The purchase price for the above mentioned Range Rover 4.2. V8 SL (including accessory) is CHF 119,000 and the purchase price for the BMW X5 4.6 si (including accessory) is CHF 65,000, i.e., altogether CHF 184,000. The purchase price is inclusive of VAT in the amount of CHF 12,996.30.

2. EXECUTION OF THE PURCHASE AGREEMENT

The Purchaser is already in possession of the purchase object. Ownership as well as benefits and risk shall pass from the Seller to the Purchaser as per the date of the closing of the share

purchase agreement between Eugen Hänggi and the Barnes Group Inc. re 100% of Heinz Hänggi AG, Stanztechnik’s, stock.

3. MISCELLANEOUS

3.1 Warranty

With the conclusion of this Agreement the Seller assigns any and all warranty claims against third party in connection with the purchase object to the Purchaser and the Purchaser takes these warranty claims over. The Seller’s liability for any other defects of the purchase object is excluded.

3.2 Insurance

The Purchaser shall insure the purchase object. Possible insurance premiums already paid by the Seller are included in the purchase price and do not have to be refunded by the Purchaser.

3.3 Placing into and Keeping in Circulation

The Purchaser shall place the purchased cars into circulation and keep them in circulation, respectively. Possible motor vehicle taxes and expenses for the placing into circulation are included in the purchase price and do not have to be refunded to the Seller.

3.4 Completeness

This Purchase Agreement is executed in two originals and constitutes the entire agreement between the Parties. It may be modified or amended only by written agreement.

3.5 Applicable Law and Jurisdiction

This Agreement shall be governed by and construed in accordance with Swiss law. All disputes arising out of or in connection with this Agreement in particular disputes on its validity or termination as well as regarding the enforceability of the present jurisdiction clause shall be exclusively decided by the ordinary courts of the Canton of Solothurn (Switzerland).

place, date:	place, date:
The Seller	The Purchaser:
Heinz Hänggi AG, Stanztechnik	Eugen Hänggi

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ANNEX 3.2.1(c)(v)

PRELIMINARY CONTRACT

to the Agreement for the Purchase and Sale of Real Property

(Art. 216 (2) CO)

Selling Party

Heinz Hänggi AG, Stanztechnik

(Company’s Registration No.: CH-254.3.000.409-4)

Unterer Einschlag, 2544 Bettlach

represented by Hänggi Eugen, from Meltingen, in Solothurn;

Chairman of the Board of Directors with Single Authority to Sign

Purchasing Party

Hänggi Eugen, 13.2.1953

married, from Meltingen SO

Grafenfelsweg 14, 4500 Solothurn

Before the undersigned Peter Vogt, Notary Public of the Canton of Solothurn, the following Preliminary Contract shall be concluded:

1. Preamble

Heinz Hänggi AG is the owner of the real properties no. 1887 and 1888 land register Grenchen and entitled to freely dispose thereof.

Eugen Hänggi concluded an agreement with                                          concerning the purchase and sale of 600 registered shares of the Heinz Hänggi AG, Stanztechnik at a nominal value of CHF 500/share. This share purchase agreement provides that the properties mentioned below are to be transferred at the book value and purchase price agreed upon hereafter.

Preliminary Contract Real Estates Land Register Grenchen No. 1787 and 1788         Page 2

2. Obligation

The Selling Party herewith undertakes to sell and the Purchasing Party herewith undertakes to buy the real estates specified below.

This obligation is subject to the execution of the purchase and sale of the 600 registered shares of the Heinz Hänggi AG, Stanztechnik at a nominal value of CHF 500.— agreed upon between Eugen Hänggi as Seller and                                          as Purchaser.

3. Properties

3.1 Real Estate Land Register Grenchen No. 1887 (Folio No. 50)

205a 14m²

Real Servitudes

None

Annotations and Priority Notices

None

Charges on Real Property

According to the land register

3.2 Real Estate Land Register Grenchen No. 1888 (Folio No. 50)

37a 85m²

Real Servitudes

Charge: electric wire of Städtische Werke Grenchen

Annotations and Priority Notices

None

Charges on Real Property

According to the land register

The extract from the land register of February 20, 2006 constitutes an integral part of the present Preliminary Contract.

Preliminary Contract Real Estates Land Register Grenchen No. 1787 and 1788         Page 3

4. Purchase Price

The purchase price amounts to

Land Register Grenchen No. 1887	CHF	2’051’400.00
Land Register Grenchen No. 1888	CHF	378’500.00
Total	CHF	2’429’900.00

5. Payment of the Purchase Price

The agreed purchase price of CHF 2’429’900.00 shall be due on the day of the signing of the agreement for the purchase and sale. The Selling Party is entitled to set the purchase price off against the credit balance of the Purchasing Party with the Selling Party.

As per the same date the mortgage notes of December 24, 1991 in the amount of CHF 1’550’000.00 (ranking first) and CHF 1’795’000.00 (ranking second) registered in the land register Grenchen No. 1887 and 1888 and issued in the name of the Selling Party as mortgage creditor shall be assigned to the Purchasing Party. On the occasion of the signing of the present Preliminary Contract the mortgage notes with a note of assignment shall be delivered to Mr. Peter Vogt for keeping them in trust.

6. Special Arrangements

a) The transfer of the ownership and the transfer of benefits, burdens and risks shall occur upon registration of the agreement of purchase and sale in the land register.

b) As far as legally admissible any legal warranty on the part of the Selling Party for legal and physical defects of the objects of the purchase shall be expressly excluded. Any covenants of the Selling Party included in the present contract or otherwise provided in writing are reserved.

Preliminary Contract Real Estates Land Register Grenchen No. 1787 and 1788        Page 4

c) The Purchasing Party is aware of the existing real servitude; therefore, it waives a detailed description thereof.

d) The cost for the present Preliminary Contract as well as the cost of the land registry, the tax on transfer of property and the fee of the land registry shall be paid by the Selling Party.

The parties note that they are jointly and severally liable for the cost of the land registry and that there is a statutory lien without registration in the land registry.

e) This Preliminary Contract is legally enforceable and the rights and obligations arising therefrom are inheritable.

h) The parties agree to maintain silence with regard to this Preliminary Contract as long as the Share Purchase Agreement has not been concluded and executed.

i) The Selling Party and the Purchasing Party irrevocably instruct and authorize Peter Vogt, Attorney-at-Law and Public Notary, Marktplatz 6, 2540 Grenchen to give notice of the agreement for purchase and sale with the Amtsschreiberei Region Solothurn, Filiale Grenchen-Bettlach and to sign it in the name and on behalf of both parties immediately after the condition of para. 2 above has been met. After the registration of the Purchasing Party as owner of the real property and the payment of the purchase price Peter Vogt shall be obliged to deliver the mortgage notes to the Purchasing Party.

7. Official Recording

Herewith, it is officially recorded that the parties

• concurrently declared to have read this deed and that such deed corresponded to their will;

• signed the deed in the presence of the Notary Public;

• declared before the Notary Public there are no limitations of their legal capacity and that there are no such proceedings as to their legal limitation pending.

Preliminary Contract Real Estates Land Register Grenchen No. 1787 and 1788        Page 5

After having read the contract and after having declared that it corresponds to their free will the parties signed this deed.

Notarised in the offices of the Heinz Hänggi AG, Stanztechnik in

Bettlach,                                                              

The Selling Party	The Purchasing Party
Heinz Hänggi AG, Stanztechnik	Eugen Hänggi

The Notary Public

Annex 3.2.1(c)(vi)

AGREEMENT ON THE TRANSFER OF SECURITIES

between

Heinz Hänggi AG, Stanztechnik, Unterer Einschlag, 2544 Bettlach

(“Seller”)

and

Eugen Hänggi, Grafenfelsweg 14, 4500 Solothurn

(“Purchaser”)

PREAMBLE

The Seller is the owner of several securities which are held in a safekeeping account with UBS AG as well as of shares of Tennishalle Grenchen AG. The Purchaser intends to purchase the securites in this safekeeping account as well as the shares of Tennishalle Grenchen AG and the Seller intends to sell them to him. Now therefore, the Parties agree as follows:

1. OBJECT OF PURCHASE AND PURCHASE PRICE

1.1 Object of Purchase

The Seller sells to the Purchaser and the Purchaser herewith purchases from the Seller:

a) The following securities in the safekeeping account with UBS (client no. 0272-364 419):

• 2,720 registered shares of Credit Suisse Group, security no. 1,213,853

• 840 registered shares of Nestlé AG, security no. 1,205,604

• 1,800 registered shares of Siemens AG, security no. 827,766;

as well as

b) the share certificate no. 120 of Tennishalle Grenchen AG, reflecting 23 registered shares of Tennishalle Grenchen AG, with a nominal value of CHF 1,000 per share;

(altogether referred to as the “Securities”)

1.2 Purchase Price

The purchase price for the above mentioned Securities is CHF 650,000 (Swiss francs six hundred fifty thousand).

2. EXECUTION OF THE PURCHASE AGREEMENT

The ownership as well as benefits and risks regarding the shares mentioned in Section 1.1(a) shall pass from the Seller to the Purchaser effective as of the mutual signing of this Agreement. The Seller agrees to instruct UBS AG to transfer the shares mentioned in Section 1.1(a) from the Seller’s safekeeping account to a safekeeping account of the Purchaser. At the same time, the Seller herewith authorizes the Purchaser to instruct UBS AG to transfer the shares mentioned in Section 1.1(a) from the Seller’s safekeeping account to a safekeeping account of the Purchaser.

The share certificate of Tennishalle Grenchen AG is in the possession of the Seller and shall be delivered to ownership to the Purchaser with the mutual signing of this Agreement.

3. APPLICABLE LAW AND JURISDICTION

This Agreement shall be governed by and construed in accordance with Swiss law. All disputes arising out of or in connection with this Agreement, in particular disputes on its validity or termination as well as regarding the enforceability of the present jurisdiction clause, shall be exclusively decided by the ordinary courts of the Canton of Solothurn (Switzerland).

place, date:	place, date:
Seller: Heinz Hänggi AG, Stanztechnik	Purchaser: Eugen Hänggi

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Annex 3.2.1(c)(vii)

LEASE AGREEMENT

between

Heinz Hänggi AG, Stanztechnik, Unterer Einschlag, 2544 Bettlach

(“Lessor”)

and

Eugen Hänggi, Grafenfelsweg 14, 4500 Solothurn

(“Lessee”)

PREAMBLE

The Lessor is the owner of the property Unterer Einschlag 9b, on which is situated a garage and storehouse with three boxes. The Lessee intends to rent the box middle and the box east and the Lessor is ready to lease them to the Lessee.

1. LEASE OBJECT AND RENT

1.1 Lease Object

The Lessor leases to the Lessee the following garages on the property Unterer Einschlag 9b:

• the box middle and

• the box east.

1.2 Rent

The rent for the entire duration of the lease of 2 years is CHF 1 (one Swiss franc) including ancillary costs. The rent is inclusive of possible VAT.

2. BEGINNING OF THE LEASE AND FIRST RENT

2.1 Beginning of the lease

The present Lease Agreement enters into force upon its signature by both parties. The lease begins on the date of the closing of the share purchase agreement between Eugen Hänggi and the Barnes Group Inc. re 100% of Heinz Hänggi AG, Stanztechnik’s, stock.

3. DURATION OF THE LEASE

The Lease Agreement is for a fixed period and ends without notice 2 years after the beginning of the rent as defined above.

4. MISCELLANEOUS

4.1 Transfer

The object has to be transferred at the beginning of the lease in proper and in suitable condition for the contractual use, unless it is already used by the Lessee. If defects exist, the Lessee has to notify these in writing within the 10 days following the contractually defined beginning of the lease.

4.2 Use

The object is primarily to be used as parking area. The Lessee is free to also use the object as store or crafts room. Any further change in use is only allowed with the Lessor’s written consent. The Lessee must use the object with all due care.

4.3 Maintenance

The Lessee has to keep the object in a proper condition. The cleaning of access roads and forecourts as well as the clearing away of snow are up to the Lessor. The Lessee must notify the Lessor immediately if defects of the object, which are to be remedied by the Lessor, arise during the term of the lease.

4.4 Limitation of Liability

Any liability of the Lessor for damages due to natural hazard and theft as well as for the damaging of parked cars by third parties is excluded, unless the Lessor has insurance coverage (in particular of the building insurance).

4.5 Sublease and Assignment

The Lessee is entitled to sublease the object within the scope of contractual use. He has to inform the Lessor on the sublease. The assignment of this Lease Agreement is only allowed with the written consent of the Lessor.

4.6 Return

Upon the termination of the lease, the object has to be returned to the Lessor vacated, clean and together with all keys. The Lessee has to answer for defects which exceed normal use and has to replace missing keys.

4.7 Applicable Law and Jurisdiction

This Agreement shall be governed by and construed in accordance with Swiss law. Exclusive jurisdiction of all disputes arising out of or in connection with this Agreement in particular disputes on its validity or termination as well as regarding the enforceability of the present

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jurisdiction clause shall reside in the ordinary courts of the Canton of Solothurn (Switzerland).

place, date:	place, date:
The Lessor: [Name of the Person authorized to sign]	The Lessee: Eugen Hänggi

3

Annex 3.2.1(c)(viii)

CONSULTANCY AGREEMENT

between

Heinz Hänggi AG, Stanztechnik, Unterer Einschlag 9, 2544 Bettlach

(“Company”)

and

Sole Proprietor Eugen Hänggi, Grafenfelsweg 14, 4500 Solothurn

(“Consultant”)

The Consultant has sold his participation in the Company to [·] on [·]. Effective as per [·], he has resigned as member of the Company’s board of directors and his employment relationship with the company has been terminated. The Company desires to continue using the Consultant’s technical and commercial know-how which is based on longlasting experience.

NOW THEREFORE, the Parties agree as follows:

1. FIELD OF ACTIVITY

The Consultant is prepared to furnish consulting services to the Company during the term of the present Agreement in all aspects of the Company’s business, in particular with regard to the following advisory activities:

• support of the new CEO

• technical support with regard to the Company’s products

• transitioning support of key customers and suppliers

• maintenance of the relationship with officials and authorities in the Canton of Solothurn and the Municipality of Bettlach, including, contacts with environmental authorities

• financial and personnel integration of the Company into Barnes Group Inc.

Operative activities, such as, inter alia, human resources and accounting, commercial sales negotiations and administrative tasks are explicitly excluded from the scope of this Consultancy Agreement. Unless otherwise specifically agreed and documented in writing, the Consultant shall have no power to (i) make contracts for, (ii) take decisions on behalf of, or (iii) otherwise to bind the Company.

Gunnar Sand and Philip A. Goodrich or any other person appointed by the Company (each a “Contact Person”) shall be responsible to determine from time to time the services to be delivered by the Consultant and to assign the Consultant specific tasks. The Consultant and a Contact Person shall meet from time to time but at least once each month to discuss the services performed and proposals for further services.

2. TIME SPENT BY THE CONSULTANT

The time spent by the Consultant depends on the Company’s instructions, but will not exceed 10 days a month; with the exception of the three months immediately following the sale of the Company; during these months the time spent may amount up to 20 days a month.

3. POSITION AND LEGAL STATUS OF THE CONSULTANT

The Consultant is an independent contractor in the sense of Article 394 et seq. CO. The Company shall make available to the Consultant a CAD-workstation on the Company’s premises as well as in his private office. The Consultant is responsible for his own infrastructure and organization. He bears his own expenses, unless the Company is obliged under section 4 of this Agreement to reimburse certain expenses.

The Consultant shall not act in the name of the Company, unless he is in individual cases explicitly given a written special power of attorney.

4. FEE

The Consultant shall be compensated on a monthly basis for his services rendered with CHF 2,500 per day (per diem allowance). In addition, the Consultant shall be reimbursed for all reasonable and necessary expenses costs and expenses (including VAT) incurred in carrying out his consultancy services. In principle, the following guidelines apply:

• travel by train: 1^st class

• travel by plane: business class for aitravel on fligths exceeding five hours duration; otherwise, economy class

• car allowance: CHF 1,00 per kilometer

• hotel category: Swissotel or comparable

2

• meals with and without customers: actual expenses up to an amount of CHF 150 or equivalent.

As per the end of the month, the Consultant shall issue an invoice for the services rendered in the lapsed month (including a list of the hours spent) as well as for costs and expenses incurred.

Except as otherwise provided in this Agreement, the Consultant shall bear all social security contributions, taxes and all expenses of whatever nature incurred in carrying out his duties hereunder.

5. NON-COMPETITION AND NON-ENTICEMENT

The Consultant agrees that he will not directly or indirectly (including through affiliates) compete with the Company in activities performed by the Company in the areas of subsequent punching, micro punching, fine cutting and converting during the term of this Agreement and for a period of ten years after the termination of this Agreement within the territory of Switzerland and during a period of three years in the territory of the European Union. All customer data exclusively belong to the Company.

During the term of this Agreement and for three years after its termination, the Consultant shall not directly or indirectly solicit or entice away employees of the Company. The Consultant undertakes that affiliates (as defined in the share purchase agreement referred to in the preamble) also comply with this non-enticement provision.

Further, the Consultant agrees that he shall not support financially or technically his wife or any relative in a competing business to the extent they are active in a way and during a time period that were not permitted to the Consultant.

6. TERM AND TERMINATION

This Agreement is concluded effective as of the termination of the employment relationship between the Consultant and the Company as per [·]. This Agreement runs for 12 months and is terminated at that time automatically and without notice. ConsultantEither Party shall have the option to prolong this Agreement for another year, whereupon the Consultant’s workload as per section 2 shall be redefined. All other conditions remain unchanged.

An early termination for important reasons which make the continuation of the contractual relationship an unreasonable demand remains reserved.

7. SEVERABILITY CLAUSE

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In the event that any of the provisions of this Agreement shall be held null and void, invalid or unenforceable, the remainder of this agreement shall remain in full force and effect. The Parties shall replace such null and void, invalid or unenforceable clause by a new and valid provision which shall achieve as nearly as possible the same economic effect as the original provision.

8. APPLICABLE LAW AND JURISDICTION

This Agreement shall be governed by and construed in accordance with Swiss law. Exclusive jurisdiction of all disputes arising out of or in connection with this Agreement (including disputes on its conclusion, validity or enforceability) shall reside in the ordinary courts of the Canton of Solothurn, legal venue is Solothurn.

place and date	The Company
place and date	The Consultant

4

Annex 3.2.1.(c)(ix)

TERMINATION AGREEMENT

between

Heinz Hänggi AG, Stanztechnik, Unterer Einschlag, 2544 Bettlach

(“Company”)

and

Eugen Hänggi, Grafenfelsweg 14, 4500 Solothurn

(“Eugen Hänggi”)

(hereinafter referred to as the “Parties”)

PREAMBLE

The Company and Eugen Hänggi have concluded an employment agreement, a loan agreement and a licence agreement (hereinafter referred to as the “Contracts”). Eugen Hänggi has agreed in a separate share purchase agreement to sell all shares of the Company (the “Share Purchase Agreement”). The Share Purchase Agreement is to be executed on [·] 2006 (“Closing Date”). Condition to the execution of the Share Purchase Agreement is that the Contracts are terminated. Now therefore, the Parties agree as follows:

1. EMPLOYMENT AGREEMENT

1.1 Declarations of the Parties

The Parties declare that there is an employment contract between the Company as employer and Eugen Hänggi as employee.

The Parties further declare that the contractual yearly salary is CHF 2,500,000 gross, payable in 12 monthly instalments. As from January 1, 2006 until the Closing Date, the salary is, therefore, pro rata CHF [·] gross. The Company already paid CHF [·] gross of that sum to Eugen Hänggi for the months of January, February and March 2006. As per the Closing Date, CHF [·], less social security contributions of CHF [·] in total, are owed, which makes a remaining debt of CHF [·] net (“Remaining Debt”). This Remaining Debt has been paid by the Company to Eugen Hänggi.

1.2 Termination

The Parties agree that the employment agreement is terminated effective as per the closing date of the Share Purchase Agreement.

The Parties declare hereby that they have settled any and all mutual claims regarding the employment agreement.

2. LOAN AGREEMENT

2.1 Declarations of the Parties

The Parties declare that there is a loan agreement between the Company as borrower and Eugen Hänggi as lender.

The Parties further declare that the entire loan of the Company owed to Eugen Hänggi is CHF CHF 52,882,070 on the Closing Date (“Loan Claim”). This amount consists of the loan with a value date of December 31, 2005 in the amount of CHF 52,882,070. For the time after January 1, 2006 no interest is owed.

The Loan Claim has been paid by the Company to Eugen Hänggi.

2.2 Termination

The Parties agree to terminate the loan agreement effective as per the closing date of the Share Purchase Agreement.

The Parties declare hereby that they have settled any and all mutual claims regarding regarding the loan agreement.

3. LICENCE AGREEMENT

3.1 Declarations of the Parties

The Parties declare that there is a licence agreement between them, dated November 30, 1995, with the Company as licensee and Eugen Hänggi as licensor.

The Parties further declare that, for the period from January 1, 2006 until the Closing Date, no licence fees are due anymore under the licence agreement.

3.2 Termination

The Parties agree to terminate the existing licence agreement effective as per the closing date of the Share Purchase Agreement.

The Parties further agree that they have settled any and all mutual claims regarding the licence agreement.

4. APPLICABLE LAW AND JURISDICTION

This Agreement shall be governed by and construed in accordance with Swiss law. All disputes arising out of or in connection with this Agreement in particular disputes on its validity or termination as well as regarding the enforceability of the present jurisdiction clause shall be exclusively decided by the ordinary courts of the Canton of Solothurn (Switzerland).

2

place, date:	place, date:
The Company: Heinz Hänggi AG, Stanztechnik	Eugen Hänggi: Eugen Hänggi

3

Annex 7.28 (Original in English)

The Seller understands that the Barnes Group Stock is characterized as “restricted securities” under the United States federal securities laws inasmuch as it is being acquired from the Buyer in a transaction not registered with the SEC. The Seller represents and warrants that he is acquiring the Barnes Group Stock for investment and not with a view to the present distribution or other disposition thereof either directly or indirectly. The Seller understands that the Barnes Group Stock to be issued in the transaction has not been registered under the Securities Act or any applicable state securities laws and may not be resold except pursuant to an effective registration statement under the Securities Act or an available exemption from the registration requirements of the Securities Act and in compliance with the applicable laws of any state in the United States governing the offer and sale of securities and the rules and regulations thereunder.

The Seller represents and warrants that he is a natural person and not resident in the United States and the Seller is not acquiring the Barnes Group Stock for the account or benefit of any other person, natural or otherwise.

Annex 8.4 (Original in English)

At the date of signing of this Agreement, the authorized capital stock of the Buyer includes of 60,000,000 shares of common stock, par value $0.01 per share, of which 24,419,694 shares are issued as of February 21, 2006. Except for the preferred stock of the Buyer with a par value USD 0.01 per share and the Series A Junior Participating Preferred Stock of the Buyer (which has been authorized, but none of which is issued or outstanding), there are no shares of capital stock of the Buyer of any other class authorized or issued. All of the issued and outstanding shares have been validly issued, are fully paid and non-assessable and the Barnes Group Stock has been duly authorized for issuance and, when issued and delivered to the Seller, will be duly and validly issued and fully paid and non-assessable and the issuance of the Barnes Group Stock is not subject to any pre-emptive rights of any other shareholder of the Buyer.

The Barnes Group Stock is free and clear of all claims of third parties and the Seller shall have as of the Closing Date, subject to the terms of this Agreement, the rights, preferences, privileges and limitations set forth in Buyer’s certificate of incorporation and by-laws and the General Corporation Law of the State of Delaware with respect to holders of its common stock.

The SEC Documents (defined as the last annual report on Form 10-K and proxy statement on Schedule 14A both in the form filed with the SEC prior to the date of this Agreement, all quarterly reports on Form 10-Q and Current Reports on Forms 8-K of the Purchaser filed with the SEC since January 1, 2005) taken as a whole did not, as of the dates thereof, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which such statements were made, except as set forth in subsequent amendments thereof constituting part of the SEC Documents. Except for the transactions contemplated by this Agreement and the passage of time, there has not occurred any event that requires the filing with the SEC of an SEC Document that has not been filed and there has been no material adverse effect on the business, assets, financial condition or the results of operations of the Buyer and/or its Subsidiaries between September 30, 2005 and the signing of this Agreement.

Annex 11.9 (Original in English)

11.9.1 Resale Limitations

Except as otherwise expressly permitted elsewhere in this Agreement, from and after the Closing and until the expiry of the Lock-Up Period, the Seller shall not (i) sell, assign, convey or pledge, (ii) grant or enter into any option, right or contract (including any hedging contract), (iii) warrant to purchase, lend, or otherwise transfer or dispose of, or otherwise dispose of or, (iv) enter into any swap or other arrangement that (a) transfer to another, in whole or in part, any of the economic consequences of ownership of Barnes Group Stock, or (b) create or suffer to exist any lien, claim, charge or other restriction in respect of his ownership interest in the Barnes Group Stock or (c) transfers or otherwise disposes of any part of his ownership interest in the Barnes Group Stock, in each case whether by act or deed or by operation of law.

The limitations contained in this Section 11.9.1 shall not apply to any transaction of the Barnes Group Stock that are based on the applicable inheritance law or take place between the Seller and his spouse, his children or any other of his relatives as long as they are not resident in the United States of America, provided the limitations of this Section 11.9.1 remain applicable to the Barnes Group Stock after the transaction and the beneficiary of the Barnes Group Stock declares in writing to be bound by the restrictions of Section 11.9 of this Agreement.

11.9.2 Regulation S Compliance

In addition to the restrictions contained in Section 11.9.1 above the Seller agrees that the Seller will not offer or sell any Barnes Group Stock prior to the day after the first anniversary of the Closing Date other than an offer or sale made (i) in accordance with Rules 903 or 904 of Regulation S, (ii) pursuant to registration of the Barnes Group Stock under the Securities Act, or (iii) pursuant to an available exemption from the registration requirements of the Securities Act. The Buyer shall refuse to register the Transfer of any Barnes Group Stock not made in accordance with this Section 11.9.2 or otherwise in violation of this Agreement and for such purpose may place stop transfer instructions with its transfer agent with respect to the Barnes Group Stock. The Seller shall deliver to the Buyer documentation reasonably satisfactory for the Buyer to determine such Transfer complies with this Section 11.9.2.

11.9.3 Legends

It is understood that the shares evidencing the Barnes Group Stock shall bear the following legend:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS. NO TRANSFER OF SAID SECURITIES SHALL BE

PERMITTED EXCEPT IN ACCORDANCE WITH THAT CERTAIN SHARE PURCHASE AGREEMENT DATED MARCH 15, 2006 (THE “AGREEMENT”) AND (I) IN ACCORDANCE WITH REGULATION S PROMULGATED UNDER THE ACT, (II) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS COVERING THE SHARES PROPOSED TO BE TRANSFERRED, OR (III) PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT AND ANY APPLICABLE SECURITIES LAWS. A COPY OF THE AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE ISSUER. HEDGING TRANSACTIONS INVOLVING SAID SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE AGREEMENT AND THE ACT.”

Upon request of a holder of such a certificate, the Buyer shall remove the foregoing legend from the certificate or issue to such holder a new certificate therefor free of any transfer legend, if (a) with such request, the Buyer shall have received a legal opinion, in form and substance satisfactory to the Buyer and from counsel reasonably satisfactory to the Buyer, to the effect that either any transfer by such holder of the securities evidenced by such certificate will not violate the Securities Act and applicable state securities laws, or if the request is being made in connection with a sale in accordance with paragraph (k) of Rule 144, such holder is not and has not during the last three months been an affiliate of the Company, and (b) at least three years have elapsed since the Closing.

EX-10.2

Exhibit 10.2

AMENDMENT NO. 1

TO

SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

This AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT dated as of February 8, 2006 (this “Amendment”), by and among BARNES GROUP INC. (“BGI”), BARNES GROUP SWITZERLAND GMBH, NEVIS BRANCH (“Barnes Switzerland” and together with BGI, the “Borrowers”, and each individually, a “Borrower”), BANK OF AMERICA, N.A. and the other lending institutions party thereto (the “Lenders”) and BANK OF AMERICA, N.A., as administrative agent for itself and such other lending institutions (the “Administrative Agent”), amends certain provisions of the Second Amended and Restated Revolving Credit Agreement, dated as of January 11, 2006, among the Borrowers, the Administrative Agent and the Lenders, with Banc of America Securities LLC, as Arranger, KeyBank National Association, as Syndication Agent and HSBC Bank USA National Association and Webster Bank, National Association as Co-Documentation Agents (as amended and in effect from time to time, the “Credit Agreement”). Capitalized terms used herein without definition shall have the meanings assigned to such terms in the Credit Agreement.

WHEREAS, the parties desire to amend the Credit Agreement as hereinafter set forth.

NOW THEREFORE, in consideration of the mutual agreements contained in the Credit Agreement and herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

§1. Amendments to the Credit Agreement.

§1.1. Amendments to Section 9.3 of the Credit Agreement. Section 9.3 of the Credit Agreement is hereby amended by (i) deleting the word “and” immediately following clause (k), (ii) deleting “.” at the end of clause (l) and substituting “; and” therefor, and (iii) inserting the following new clause (m) at the end of the subsection:

“(m) Investments by BGI in Capital Stock of any Person, in an aggregate amount not to exceed $30,000,000 outstanding at any time.”

§2. Affirmation and Acknowledgment. Each Borrower hereby ratifies and confirms all of its Obligations to the Administrative Agent, including, without limitation, the Loans, and each Borrower hereby affirms its absolute and unconditional promise to pay to the Administrative Agent the Loans and all other amounts due under the Credit Agreement as amended hereby.

§3. Representations and Warranties. Each Borrower hereby represents and warrants to the Administrative Agent as follows:

(a) Representations and Warranties in the Credit Agreement. The representations and warranties of the Borrowers contained in the Credit Agreement were true and correct in all material respects as of the date when made and continue to be true and correct in all material respects on the date hereof, except to the extent of changes resulting from transactions contemplated or permitted by the Credit Agreement, as amended by this Amendment, and the other Loan Documents and changes occurring in the ordinary course of business that singly or in the aggregate are not materially adverse, or the extent that such representations and warranties relate expressly to an earlier date.

(b) Ratification, Etc. Except as expressly amended hereby, the Credit Agreement, the other Loan Documents and all documents, instruments and agreements related thereto, are hereby ratified and confirmed in all respects and shall continue in full force and effect. The Credit Agreement, together with this Amendment, shall be read and construed as a single agreement. All references in the Loan Documents to the Credit Agreement or any other Loan Document shall hereafter refer to the Credit Agreement or any other Loan Document as amended hereby.

(c) Authority, Etc. The execution and delivery by each of the Borrowers of this Amendment and the performance by each of the Borrowers of all of their agreements and obligations under the Credit Agreement as amended and the other Loan Documents hereby are (i) within the corporate (or equivalent company) authority of such Person, (ii) have been or will be (prior to becoming a party thereto) duly authorized by all necessary corporate (or the equivalent company) proceedings, (iii) do not and will not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which any of the Borrowers or any of their Subsidiaries is subject or any judgment, order, writ, injunction, license or permit applicable to any of the Borrowers or any of their Subsidiaries and (iv) do not conflict with any provision of the Governing Documents of, or any agreement or other instrument binding upon any the Borrowers or any of their Subsidiaries.

(d) Enforceability of Obligations. The execution and delivery of this Amendment, the Credit Agreement as amended and the other Loan Documents hereby constitute the valid and legally binding obligations of such Person enforceable against it in accordance with the respective terms and provisions hereof and thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought.

(e) No Default. No Default or Event of Default has occurred and is continuing.

§4. Conditions. This Amendment shall become effective on the date upon the Administrative Agent’s receipt of counterparts of this Amendment, executed and

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delivered by each of the Borrowers, the Required Lenders, and the Administrative Agent.

§5. Miscellaneous Provisions

§5.1. Except as otherwise expressly provided by this Amendment, all of the terms, conditions and provisions of the Credit Agreement and the Loan Documents shall remain the same. It is declared and agreed by each of the parties hereto that the Credit Agreement and the Loan Documents, as amended hereby, shall continue in full force and effect, and that this Amendment and the Credit Agreement and the Loan Documents shall be read and construed as one instrument.

§5.2. THIS AMENDMENT IS A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW §5-1401, BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

§5.3. This Amendment may be executed in any number of counterparts, but all such counterparts shall together constitute but one instrument. In making proof of this Amendment, it shall not be necessary to produce or account for more than one counterpart signed by each party hereto by and against which enforcement hereof is sought.

§5.4. BGI hereby agrees to pay to the Administrative Agent, on demand by the Administrative Agent, all reasonable out-of-pocket costs and expenses incurred or sustained by the Administrative Agent in connection with the preparation of this Amendment (including legal fees).

§5.5. The captions in this Amendment are for convenience of reference only and shall not define or limit the provisions hereof.

[Remainder of this page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as a document under seal as of the date first above written.

BARNES GROUP INC.
By:	/S/ William C. Denninger
	William C. Denninger
	Senior Vice President, Finance and Chief Financial Officer
By:	/S/ Lawrence W. O’Brien
	Lawrence W. O’Brien
	Vice President, Treasurer
BARNES GROUP SWITZERLAND GmbH
By:	/S/ William C. Denninger
	William C. Denninger
	Director

S-1 (Amendment No. 1)

BANK OF AMERICA, N.A., individually, as Issuing Bank and as Swing Line Lender
By:	/S/ Kenneth S. Struglia
	Kenneth S. Struglia
	Director
BANK OF AMERICA, N.A., as Administrative Agent
By:	/S/ Matthew C. Correia
	Matthew C. Correia
	AVP

S-2 (Amendment No. 1)

HSBC BANK USA NATIONAL ASSOCIATION, individually and as Co-Documentation Agent
By:	/S/ Robert H. Rogers
Name:	Robert H. Rogers
Title:	First Vice President

S-3 (Amendment No. 1)

KEYBANK NATIONAL ASSOCIATION, individually and as Syndication Agent
By:	/S/ Suzannah Harris
Name:	Suzannah Harris
Title:	Vice President

S-4 (Amendment No. 1)

MELLON BANK, N.A.
By:	/S/ William M. Feathers
Name:	William M. Feathers
Title:	Vice President

S-5 (Amendment No. 1)

WEBSTER BANK, NATIONAL ASSOCIATION, individually and as Co-Documentation Agent
By:	/S/ Carol Carver
Name:	Carol Carver
Title:	Vice President

S-6 (Amendment No. 1)

THE BANK OF NEW YORK
By:	/S/ Kenneth P. Sneider, Jr.
Name:	Kenneth P. Sneider, Jr.
Title:	Vice President

S-7 (Amendment No. 1)

COMERICA BANK
By:	/S/ Stacey V. Judd
Name:	Stacey V. Judd
Title:	Vice President

S-8 (Amendment No. 1)

JPMORGAN CHASE BANK, N.A., f/k/a Bank One, NA (Main Office Chicago)
By:	/S/ Peter M. Killea
Name:	Peter M. Killea
Title:	Vice President

S-9 (Amendment No. 1)

THE GOVERNOR & COMPANY OF THE BANK OF IRELAND
By:	/S/ Deirdre Reddan
Name:	Deirdre Reddan
Title:	Authorized Signatory
By:	/S/ Olivia Barriere
Name:	Olivia Barriere
Title:	Authorized Signatory

S-10 (Amendment No. 1)

BRANCH BANKING AND TRUST COMPANY
By:	/S/ Troy R. Weaver
Name:	Troy R. Weaver
Title:	Senior Vice President

S-11 (Amendment No. 1)

CALYON NEW YORK BRANCH
By:	/S/ James Gibson
Name:	James Gibson
Title:	Managing Director
By:	/S/ Michael Madnick
Name:	Michael Madnick
Title:	Director

S-12 (Amendment No. 1)

EX-10.3

Exhibit 10.3

BARNES GROUP INC.

AMENDMENT NO. 4 TO NOTE AGREEMENT

As of February 23, 2006

To each of the Current Noteholders

Named in Annex 1 hereto

Ladies and Gentlemen:

Barnes Group Inc., a Delaware corporation (hereinafter, the “Company”), together with its successors and assigns, agrees with you as follows:

1. PRELIMINARY STATEMENTS.

1.1 Note Issuance, etc.

The Company issued and sold $60,000,000 aggregate principal amount of its 8.59% Senior Notes due November 21, 2008 (as may be amended, restated or otherwise modified from time to time, the “Notes”) pursuant to separate Note Agreements, each dated as of November 21, 2000, entered into by and among the Company and each of the Purchasers listed on Exhibit A attached thereto, as amended by Amendment No. 1 to Note Agreement dated as of February 21, 2002, between the Company and each of the Persons identified on Annex 1 attached thereto, Amendment No. 2 dated as of February 5, 2003, between the Company and each of the Persons identified on Annex 1 attached thereto and Amendment No. 3 dated as of January 11, 2006, between the Company and each of the Persons identified on Annex 1 attached thereto (the “Existing Note Agreement” and, as amended by this Amendment No. 4 to Note Agreement (this “Amendment Agreement”), the “Note Agreement”). The register for the registration and transfer of the Notes indicates that the Persons named in Annex 1 hereto (collectively, the “Current Noteholders”) are currently the holders of the outstanding principal amount of the Notes as set forth next to such holder’s name on Annex 1.

2. DEFINED TERMS.

Capitalized terms used herein and not otherwise defined herein have the meanings ascribed to them in the Note Agreement.

3. AMENDMENT.

Subject to Section 5, the Existing Note Agreement is hereby amended by this Amendment Agreement in the manner specified below in this Section 3 (the foregoing referred to herein as the “Amendment”).

3.1 Amendment to Section 7.16 of the Existing Note Agreement.

Section 7.16 of the Existing Note Agreement is hereby amended, by deleting “and” from the end of subsection “(g)”, relettering subsection “(h)” as a new subsection “(i)” and adding a new subsection “(h)” to read as follows:

“(h) Investments by the Company in capital stock of any Person whose business is similar to the businesses conducted by the Company and its Subsidiaries or businesses reasonably related or incidental thereto, in an aggregate amount not to exceed $30,000,000 outstanding at any time; and”

4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

To induce you to enter into this Amendment Agreement and to consent to the Amendment, the Company represents and warrants as follows:

4.1. Organization, Power and Authority, etc.

The Company is a corporation, duly incorporated and validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to enter into and perform its obligations under this Amendment Agreement.

4.2. Legal Validity.

The execution and delivery of this Amendment Agreement by the Company and compliance by the Company with its obligations hereunder: (a) are within the corporate powers of the Company; and (b) are legal and do not conflict with, result in any breach of, constitute a default under, or result in the creation of any Lien upon any Property of the Company under the provisions of: (i) any charter instrument or bylaw to which the Company is a party or by which the Company or any of its Properties may be bound, (ii) any order, judgment, decree or ruling of any court, arbitrator or governmental authority applicable to either the Company or any of its Properties or (iii) any agreement or instrument to which the Company is a party or by which the Company or any of its Properties may be bound or any statute or other rule or regulation of any governmental authority applicable to the Company or any of its Properties.

This Amendment Agreement has been duly authorized by all necessary action on the part of the Company, has been executed and delivered by a duly authorized officer of the Company, and constitutes a legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except that enforceability may be limited by applicable bankruptcy,

2

reorganization, arrangement, insolvency, moratorium, or other similar laws affecting the enforceability of creditors’ rights generally and subject to the availability of equitable remedies.

4.3. No Defaults.

No event has occurred and no condition exists that, upon the execution and delivery of this Amendment Agreement, would constitute a Default or an Event of Default.

5. EFFECTIVENESS OF THE AMENDMENT.

The Amendment shall become effective as of the first date written above (the “Effective Date”) upon:

(a) execution and delivery of a counterpart of this Amendment Agreement by the Company and by holders of 66 ²/3% of aggregate outstanding principal amount of Notes;

(b) delivery by the Company to the Current Noteholders’ counsel of a fully executed copy of Amendment No. 1 to Second Amended and Restated Revolving Credit Agreement dated as of February 8, 2006, by and among Bank of America, N.A., as administrative agent, the lenders party thereto, the Company and Barnes Group Switzerland GmbH, Nevis Branch, in form and substance satisfactory to the Current Noteholders;

(c) delivery by the Company to the Current Noteholders’ counsel of a fully executed copy of Amendment No. 4 to Note Agreement dated the date hereof to those separate Note Agreements, each dated as of November 12, 1999, (as amended by Amendment No. 1 to Note Agreement dated as of February 5, 2003, entered into by and among 3031786 Nova Scotia Company (“3031786”) and each of the Purchasers listed on Schedule A attached thereto and by the Assumption and Amendment Agreement dated as of August 26, 2005, by and among 3031786, the Company and each the Persons identified on Schedule A and Schedule B attached thereto, whereby the Company assumed the obligations of 3031786 under the said 1999 Note Agreement and the Nova Scotia Notes) and by Amendment No. 3 to Note Agreement dated as of January 11, 2006, entered into by and among the Company and each of the Persons identified on Annex 1 attached thereto (the “1999 Note Agreement”); and

(d) the Company shall have paid the fees and expenses of the Current Noteholders’ special counsel as provided in Section 6.

6. EXPENSES.

Whether or not the Amendment becomes effective, the Company will promptly (and in any event within thirty days of receiving any statement or invoice therefor) pay all fees, expenses and costs relating to this Amendment Agreement, including, but not limited to, the reasonable fees of the Current Noteholders’ special counsel, Bingham McCutchen LLP, incurred in connection with the preparation, negotiation and delivery of this Amendment Agreement and any other documents related thereto. Notwithstanding the foregoing, the Company will on the Effective Date, pay the fees and expense of Bingham McCutchen LLP incurred through the

3

Effective Date. Nothing in this Section shall limit the Company’s obligations pursuant to Section 1.5 of the Existing Note Agreement.

7. MISCELLANEOUS.

7.1. Part of Existing Note Agreement; Future References, etc.

This Amendment Agreement shall be construed in connection with and as a part of the Existing Note Agreement and, except as expressly amended by this Amendment Agreement, all terms, conditions and covenants contained in the Existing Note Agreement are hereby ratified and shall be and remain in full force and effect. Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this Amendment Agreement may refer to the Existing Note Agreement without making specific reference to this Amendment Agreement, but nevertheless all such references shall include this Amendment Agreement unless the context otherwise requires.

7.2. Counterparts; Effectiveness.

This Amendment Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto. Delivery of an executed signature page by facsimile transmission or e-mail transmission of an adobe file format document (also known as a PDF file) shall be effective as delivery of a manually signed counterpart of this Amendment Agreement.

7.3. Governing Law.

THIS AMENDMENT AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, 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 CONNECTICUT.

[Remainder of page intentionally left blank; next page is signature page.]

4

If you are in agreement with the foregoing, please so indicate by signing the acceptance below on the accompanying counterpart of this Amendment Agreement and returning it to the Company, whereupon it will become a binding agreement among each of you and the Company.

BARNES GROUP INC.
By	/S/ Lawrence W. O’Brien
Name:	Lawrence W. O’Brien
Title:	Vice President and Treasurer
By:	/S/ William C. Denninger
Name:	William C. Denninger
Title:	Senior Vice President, Finance and Chief Financial Officer

[Signature page to Barnes Group Inc. Amendment No. 4 to 2000 Note Agreement]

The foregoing Amendment Agreement is hereby accepted as of the date first above written.

THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:	/S/ Paul Meiring
Name:	Paul Meiring
Title:	Vice President

[Signature page to Barnes Group Inc. Amendment No. 4 to 2000 Note Agreement]

ALLSTATE LIFE INSURANCE COMPANY
By:	/S/ Robert B. Bodett
Name:	Robert B. Bodett
By:	/S/ Jerry D. Zinkula
Name:	Jerry D. Zinkula
	Authorized Signatories

[Signature page to Barnes Group Inc. Amendment No. 4 to 2000 Note Agreement]

NATIONWIDE LIFE INSURANCE COMPANY
By:	/S/ Joseph P. Young
Name:	Joseph P. Young
Title:	Authorized Signatory
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
By:	/S/ Joseph P. Young
Name:	Joseph P. Young
Title:	Authorized Signatory
NATIONWIDE INDEMNITY COMPANY
By:	/S/ Joseph P. Young
Name:	Joseph P. Young
Title:	Authorized Signatory

[Signature page to Barnes Group Inc. Amendment No. 4 to 2000 Note Agreement]

Annex 1

CURRENT NOTEHOLDERS AND

CURRENT OUTSTANDING PRINCIPAL AMOUNT

Current Noteholders	Outstanding Principal Amount of Notes
The Prudential Insurance Company of America	$	35,000,000
Allstate Life Insurance Company	$	15,000,000
Nationwide Life Insurance Company	$	4,000,000
Nationwide Life and Annuity Insurance Company	$	2,000,000
Nationwide Indemnity Company	$	4,000,000
TOTAL	$	60,000,000

Annex 1

EX-10.4

Exhibit 10.4

BARNES GROUP INC.

AMENDMENT NO. 4 TO NOTE AGREEMENT

As of February 23, 2006

To each of the Current Noteholders

Named in Annex 1 hereto

Ladies and Gentlemen:

Barnes Group Inc., a Delaware corporation (hereinafter, the “Company”), together with its successors and assigns, agrees with you as follows:

1. PRELIMINARY STATEMENTS.

1.1 Note Issuance, etc.

3031786 Nova Scotia Company (“3031786”) issued and sold (i) US$24,500,000 aggregate principal amount of its 7.66% Senior Notes due November 12, 2007 (as may be amended, restated or otherwise modified from time to time, the “7.66% Notes”) and (ii) US$45,500,000 aggregate principal amount of its 7.80% Senior Notes due November 12, 2010 (as may be amended, restated or otherwise modified from time to time, the “7.80% Notes” and together with the 7.66% Notes, the “Notes”) pursuant to separate Note Agreements, each dated as of November 12, 1999, entered into by and among 3031786, the Company, as Guarantor and each of the Purchasers listed on Schedule A attached thereto, as amended by Amendment No. 1 to Note Agreement dated as of February 5, 2003, by and among 3031786, the Company and each of the Purchasers listed on Annex 1 attached thereto, by the Assumption and Amendment Agreement dated as of August 26, 2005, by and among 3031786, the Company and each of the Persons identified on Schedule A and Schedule B attached thereto, whereby the Company assumed the obligations of 30301786 under the said Note Agreement and the Notes and Amendment No. 3 to Note Agreement dated as of January 11, 2006, by and among the Company and each of the Persons identified on Annex 1 attached thereto (the “Existing Note Agreement” and, as amended by this Amendment No. 4 to Note Agreement (this “Amendment Agreement”), the “Note Agreement”). The register for the registration and transfer of the Notes indicates that the Persons named in Annex 1 hereto (collectively, the “Current Noteholders”) are currently the holders of the outstanding principal amount of the Notes as set forth next to such holder’s name on Annex 1.

2. DEFINED TERMS.

Capitalized terms used herein and not otherwise defined herein have the meanings ascribed to them in the Note Agreement.

3. AMENDMENT.

Subject to Section 5, the Existing Note Agreement is hereby amended by this Amendment Agreement in the manner specified below in this Section 3 (the foregoing referred to herein as the “Amendment”).

3.1 Amendment to Section 7.14 of the Existing Note Agreement.

Section 7.14 of the Existing Note Agreement is hereby amended, by deleting “and” from the end of subsection “(g)”, relettering subsection “(h)” as a new subsection “(i)” and adding a new subsection “(h)” to read as follows:

“(h) Investments by Barnes in capital stock of any Person whose business is similar to the businesses conducted by Barnes and its Subsidiaries or businesses reasonably related or incidental thereto, in an aggregate amount not to exceed $30,000,000 outstanding at any time; and”

4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

To induce you to enter into this Amendment Agreement and to consent to the Amendment, the Company represents and warrants as follows:

4.1. Organization, Power and Authority, etc.

The Company is a corporation duly incorporated and validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to enter into and perform its obligations under this Amendment Agreement.

4.2. Legal Validity.

The execution and delivery of this Amendment Agreement by the Company and compliance by the Company with its obligations hereunder: (a) are within the corporate powers of the Company; and (b) are legal and do not conflict with, result in any breach of, constitute a default under, or result in the creation of any Lien upon any Property of the Company under the provisions of: (i) any charter instrument or bylaw to which the Company is a party or by which the Company or any of its Properties may be bound, (ii) any order, judgment, decree or ruling of any court, arbitrator or governmental authority applicable to either the Company or any of its Properties or (iii) any agreement or instrument to which the Company is a party or by which the Company or any of its Properties may be bound or any statute or other rule or regulation of any governmental authority applicable to the Company or any of its Properties.

2

This Amendment Agreement has been duly authorized by all necessary action on the part of the Company, has been executed and delivered by a duly authorized officer of the Company, and constitutes a legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except that enforceability may be limited by applicable bankruptcy, reorganization, arrangement, insolvency, moratorium, or other similar laws affecting the enforceability of creditors’ rights generally and subject to the availability of equitable remedies.

4.3. No Defaults.

No event has occurred and no condition exists that, upon the execution and delivery of this Amendment Agreement, would constitute a Default or an Event of Default.

5. EFFECTIVENESS OF THE AMENDMENT.

The Amendment shall become effective as of the first date written above (the “Effective Date”) upon:

(a) execution and delivery of a counterpart of this Amendment Agreement by the Company and by holders of 66-2/3% of aggregate outstanding principal amount of Notes;

(b) delivery by the Company to the Current Noteholders’ counsel of a fully executed copy of Amendment No. 1 to Second Amended and Restated Revolving Credit Agreement dated as of February 8, 2006, by and among Bank of America, N.A., as administrative agent, the lenders party thereto, the Company and Barnes Group Switzerland GmbH, Nevis Branch, in form and substance satisfactory to the Current Noteholders;

(c) delivery by the Company to the Current Noteholders’ counsel of a fully executed copy of Amendment No. 4 to Note Agreement, dated the date hereof to those separate Note Agreements, each dated as of November 21, 2000, (as amended by Amendment No. 1 to Note Agreement dated as of February 21, 2002, Amendment No. 2 dated as of February 5, 2003 and Amendment No. 3 dated as of January 11, 2006) and entered into by and among the Company and each of the Purchasers listed on Annex 1 attached thereto (the “2000 Note Agreement”); and

(d) the Company shall have paid the fees and expenses of the Current Noteholders’ special counsel as provided in Section 6.

6. EXPENSES.

Whether or not the Amendment becomes effective, the Company will promptly (and in any event within thirty days of receiving any statement or invoice therefor) pay all fees, expenses and costs relating to this Amendment Agreement, including, but not limited to, the reasonable fees of the Current Noteholders’ special counsel, Bingham McCutchen LLP, incurred in connection with the preparation, negotiation and delivery of this Amendment Agreement and any

3

other documents related thereto. Notwithstanding the foregoing, the Company will on the Effective Date, pay the fees and expense of Bingham McCutchen LLP incurred through the Effective Date. Nothing in this Section shall limit the Company’s obligations pursuant to Section 1.5 of the Existing Note Agreement.

7. MISCELLANEOUS.

7.1. Part of Existing Note Agreement; Future References, etc.

This Amendment Agreement shall be construed in connection with and as a part of the Existing Note Agreement and, except as expressly amended by this Amendment Agreement, all terms, conditions and covenants contained in the Existing Note Agreement are hereby ratified and shall be and remain in full force and effect. Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this Amendment Agreement may refer to the Existing Note Agreement without making specific reference to this Amendment Agreement, but nevertheless all such references shall include this Amendment Agreement unless the context otherwise requires.

7.2. Counterparts; Effectiveness.

This Amendment Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto. Delivery of an executed signature page by facsimile transmission or e-mail transmission of an adobe file format document (also known as a PDF file) shall be effective as delivery of a manually signed counterpart of this Amendment Agreement.

7.3. Governing Law.

THIS AMENDMENT AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, 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 CONNECTICUT.

[Remainder of page intentionally left blank; next page is signature page.]

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If you are in agreement with the foregoing, please so indicate by signing the acceptance below on the accompanying counterpart of this Amendment Agreement and returning it to the Company, whereupon it will become a binding agreement among each of you and the Company.

BARNES GROUP INC.
By:	/S/ Lawrence W. O’Brien
Name:	Lawrence W. O’Brien
Title:	Vice President and Treasurer
By:	/S/ William C. Denninger
Name:	William C. Denninger
Title:	Senior Vice President, Finance and Chief Financial Officer

[Signature page to Barnes Group Inc. Amendment No. 4 to 1999 Note Agreement]

The foregoing Amendment Agreement is hereby accepted as of the date first above written.

ALLSTATE INSURANCE COMPANY
By:	/S/ Robert B. Bodett
Name:	Robert B. Bodett
By:	/S/ Jerry D. Zinkula
Name:	Jerry D. Zinkula
	Authorized Signatories
ALLSTATE LIFE INSURANCE COMPANY
By	/S/ Robert B/ Bodett
Name:	Robert B. Bodett
By:	/S/ Jerry D. Zinkula
Name:	Jerry D. Zinkula
	Authorized Signatories

[Signature page to Barnes Group Inc. Amendment No. 4 to 1999 Note Agreement]

STATE FARM LIFE INSURANCE COMPANY
By:	/S/ Julie Pierce
Name:	Julie Pierce
Title:	Investment Officer
By:	/S/ Larry Rottunda
Name:	Larry Rottunda
Title:	Assistant Secretary

[Signature page to Barnes Group Inc. Amendment No. 4 to 1999 Note Agreement]

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By:	Babson Capital Management LLC, Investment Adviser
By:	/S/ Emeka O.Onukwugha
Name:	Emeka O. Onukwugha
Title:	Managing Director

[Signature page to Barnes Group Inc. Amendment No. 4 to 1999 Note Agreement]

PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY
By:	Prudential Investment Management, Inc., as Investment Manager
By:	/S/ Paul Meiring
Name:	Paul Meiring
Title:	Vice President

[Signature page to Barnes Group Inc. Amendment No. 4 to 1999 Note Agreement]

NATIONWIDE LIFE INSURANCE COMPANY
By:	/S/ Joseph P. Young
Name:	Joseph P. Young
Title:	Authorized Signatory

[Signature page to Barnes Group Inc. Amendment No. 4 to 1999 Note Agreement]

THE CANADA LIFE ASSURANCE COMPANY
By:	/S/ Tad Anderson
Name:	Tad Anderson
Title:	A.V.P., Investments, U.S. Operations
By:	/S/ Eve Hampton
Name:	Eve Hampton
Title:	V.P., Investments. U.S. Operations

[Signature page to Barnes Group Inc. Amendment No. 4 to 1999 Note Agreement]

PAN-AMERICAN LIFE INSURANCE COMPANY
By:	/S/ Lisa Baudot
Name:	Lisa Baudot
Title:	Vice President, Securities

[Signature page to Barnes Group Inc. Amendment No. 4 to 1999 Note Agreement]

Annex 1

CURRENT NOTEHOLDERS AND

CURRENT OUTSTANDING PRINCIPAL AMOUNT

Current Noteholders:	Outstanding Principal Amount of Notes
	7.66% Notes		7.80% Notes
Allstate Insurance Company	$	5,000,000		n/a
Allstate Life Insurance Company	$	12,500,000		n/a
State Farm Life Insurance Company	$	7,000,000	$	7,000,000
Massachusetts Mutual Life Insurance Company		n/a	$	14,000,000
Prudential Retirement Insurance and Annuity Company		n/a	$	10,500,000
Nationwide Life Insurance Company		n/a	$	7,000,000
The Canada Life Assurance Company		n/a	$	3,500,000
Pan-American Life Insurance Company		n/a	$	3,500,000
TOTALS	$	24,500,000	$	45,500,000

Annex 1

EX-15

EXHIBIT 15

May 2, 2006

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

Commissioners:

We are aware that our report dated May 2, 2006 on our review of interim financial information of Barnes Group Inc. for the three month periods ended March 31, 2006 and 2005 and included in the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2006 is incorporated by reference in its Registration Statements on Form S-3 (Nos. 333-104242 and 333-129079) and Form S-8 (Nos. 2-56437, 2-91285, 33-20932, 33-30229, 33-91758, 33-27339, 333-41398, 333-88518, 333-57658, 333-112869, 333-115333 and 333-133597).

Very truly yours,

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Hartford, Connecticut

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Edmund M. Carpenter, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period ended March 31, 2006 of Barnes Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2006

/S/ EDMUND M. CARPENTER

Edmund M. Carpenter

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, William C. Denninger, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period ended March 31, 2006 of Barnes Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2006

/S/ WILLIAM C. DENNINGER

William C. Denninger

Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Barnes Group Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/S/ EDMUND M. CARPENTER	/S/ WILLIAM C. DENNINGER
Edmund M. Carpenter President and Chief Executive Officer May 4, 2006	William C. Denninger Chief Financial Officer May 4, 2006

A signed original of this written statement required by Section 906 or other document authenticating, acknowledging, or otherwise adopting the signature that appears in the typed form within the electronic version of this written statement required by Section 906, has been provided to Barnes Group Inc. and will be retained by Barnes Group Inc. and furnished to the Securities and Exchange Commission or its staff upon request.