EXHIBIT 2(a)(ii)
AMENDMENT NO. 1
Dated as of June 26, 1998
to
TRANSACTION AGREEMENT
Dated as of May 10, 1998
By and Between
THE BLACK & DECKER CORPORATION
and
WINDMERE-DURABLE HOLDINGS, INC.
AMENDMENT NO. 1 TO TRANSACTION AGREEMENT
This Amendment No. 1 to Transaction Agreement (this "Amendment") is
made as of the 26th day of June 1998, by and between The Black & Decker
Corporation, a Maryland corporation ("Seller"), and Windmere-Durable Holdings,
Inc., a Florida corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller through certain of its direct and indirect Subsidiaries
is engaged in the HPG Business;
WHEREAS, Seller and Buyer have entered into a Transaction Agreement
dated as of May 10, 1998 (the "Agreement"), pursuant to which Seller has agreed
to transfer or to cause the Affiliated Transferors to transfer substantially all
of the assets held, owned by or used to conduct the HPG Business, and to assign
certain liabilities associated with the HPG Business, to Buyer or Buyer
Companies designated by Buyer, and Buyer has agreed to receive or to cause such
designated Buyer Companies to receive such assets and assume such liabilities
upon the terms and subject to the conditions set forth in the Agreement; and
WHEREAS, Seller and Buyer desire to amend the Agreement in accordance
with the terms of this Amendment;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties contained herein, the parties agree as follows:
Section 1. Capitalized terms used but not defined herein have the
meanings given to them in the Agreement.
Section 2. The list of Attachments included on pages v and vi of the
Agreement is amended by deleting "Attachment IX Form of Assignment of Mexican
Trademarks, Trademark Registrations and Applications for Registration" and
inserting in its place and stead "Attachment IX [Intentionally Omitted]", and by
adding the following:
"Attachment XXX Form of Kuantan Transition Agreement
Attachment XXXI Form of Escrow Agreement
Attachment XXXII Form of Manufacturing Agreement"
Section 3. Section 2.01(ix) of the Agreement is deleted in its entirety
and the following is inserted in its place and stead:
"(ix) Seller and Buyer shall execute and
deliver a transition agreement for the Kuantan Facility
in the form contemplated by Attachment XXX to this
Agreement, and an agreement providing Buyer with a right
of first refusal in the sale by Seller Companies of any
excess manufacturing equipment at the Kuantan Facility
that Seller Companies decide not to use in their
businesses;"
Section 4. Section 2.01(xi) of the Agreement is deleted in its entirety
and the following is inserted in its place and stead:
"(xi) Buyer Companies shall (A) pay and deliver
to Seller, for its own account and as agent for the
Affiliated Transferors, $288,000,000 in immediately
available funds by wire transfer to an account or
accounts designated by Seller (which account or accounts
shall be designated by Seller by written notice to Buyer
at least two Business Days prior to the Closing Date, or
such shorter notice as Buyer shall agree to accept) and
(B) pay and deliver to the Escrow Agent under the Escrow
Agreement $27,000,000 in immediately available funds by
wire transfer to the account contemplated by the Escrow
Agreement; and"
Section 5. Section 2.01(xii) of the Agreement is deleted in its
entirety and the following is inserted in its place and stead:
"(xii) At Closing, Seller shall cause its
wholly owned subsidiary, Black & Decker S.A. de C.V.,
and Buyer shall cause its wholly owned subsidiary,
Household Products Limited de Mexico, S. de R.L. de
C.V., to execute and deliver a manufacturing agreement
for the Queretaro Property in the form contemplated by
Attachment XXXII."
Section 6. The following provision is added as Section 2.04(g) of the
Agreement:
"(g) Notwithstanding any other provisions of
this Agreement and notwithstanding the fact that title
to assets used at the Kuantan Facility and the Queretaro
Property and Inventory located in Colombia, Argentina,
Chile or Peru will not be transferred to Buyer or Buyer
Companies on the Closing Date, in calculating the
Proposed Final Net Tangible Asset Amount, the Proposed
Net Working Capital Change Amount, the Final Net
Tangible Asset Amount and the Final Net Working Capital
Change Amount, Seller and Buyer agree to take into
account those assets located at the Kuantan Facility and
the Queretaro Property and the Inventory located in
Colombia, Argentina, Chile or Peru that otherwise would
have been Transferred Assets as of the Closing Date had
title transferred at the Closing."
Section 7. The second sentence of Section 5.06(d) of the Agreement is
deleted in its entirety and the following sentence is inserted in its place and
stead:
"Notwithstanding any provisions of this Section
5.06 to the contrary, Seller Companies shall not be
deemed to be in violation of this Section 5.06 to the
extent that, following the Closing, Seller Companies
sell (i) Cleaning and Lighting Products in any of the
Designated Countries, (ii) corded or cordless vacuums
(and any related accessories or attachments) in any of
the Designated Countries (other than Chile), (iii)
corded Dustbuster and Floorbuster vacuums in Chile, or
(iv) any Excess Products that Buyer Companies do not
purchase pursuant to the right of first refusal
contemplated by the Manufacturing Agreement."
Section 8. Section 10.02(a)(ii) is amended by deleting the phrase
"Sections 10.02(b)(iv), 10.04(b)(ii) and D.18" and inserting in its place and
stead "Sections 10.02(b)(iv) and 10.04(b)(ii)".
Section 9. The definition of "Asheboro Closing Costs" set forth in
Exhibit A of the Agreement is amended by inserting the phrase "Property (other
than employees dedicated to the manufacturing of Cleaning and Lighting
Products)" in lieu of the word "property" in clause (a), and by inserting the
phrase "(other than costs associated with Cleaning and Lighting Products)" after
the word "costs" in clause (b).
Section 10. The definition of "Cleaning and Lighting Products" set
forth in Exhibit A of the Agreement is deleted in its entirety and the following
is inserted in its place and stead:
""Cleaning and Lighting Products" means hand
held vacuums, upright floor vacuums, battery powered
bathroom and outdoor cleaners sold under the
Scumbuster(R) name, flexible flashlights, flexible
lanterns, leashlights and rechargeable lights, together
in each case with any related accessories or
attachments, but excluding corded canister and corded
upright floor vacuums sold in Chile and any related
accessories or attachments."
Section 11. The definition of "Designated Countries" set forth in
Exhibit A of the Agreement is revised by deleting the phrase ", Paraguay and
Uruguay" following the word "Brazil".
Section 12. The definition of "Designated Products" set forth in
Exhibit A of the Agreement is deleted in its entirety and the following is
inserted in its place and stead:
""Designated Products" means coffeemakers,
espresso makers, cappuccino makers, coffee mills,
toasters, toaster ovens (including those with convection
features), steamers, rice cookers, choppers, can
openers, mixers, food processors, irons, breadmakers,
skillets, electric WOKs, electric griddles, slow
cookers, electric knives, blenders, juicers, grills,
kettles, wafflebakers and corded canister and corded
upright floor vacuums sold in Mexico, Central America,
South America (other than Brazil) and the Caribbean
together in each case with any related accessories or
attachments, and all products in the foregoing
categories under development in the HPG Business as of
the Closing Date or that have been under development in
the HPG Business at any time during the year prior to
the Closing Date, but excluding step stools, Cleaning
and Lighting Products, shop, construction and similar
vacuums, and VersaPak(R) rechargeable battery packs and
chargers, together in each case with related accessories
or attachments. It is expressly understood and agreed
that corded canister and corded upright floor vacuums
(and any related accessories or attachments) shall only
be "Designated Products" to the extent and only to the
extent sold in Mexico, Central America, South America
(other than Brazil) and the Caribbean."
Section 13. The definition of "Excluded Assets" set forth in Exhibit A
of the Agreement is amended by inserting the phrase "(other than Inventory
representing administrative returns located at the national disposition center
(i.e., Nashville facility))" after the first reference to "Canada".
Section 14. The definition of "Intellectual Property Assignment
Agreements" set forth in Exhibit A of the Agreement is amended by inserting the
word "and" before the phrase "the Assignment of US Copyrights," and by deleting
the phrase "and the Assignment of Mexican Trademarks, Trademark Registrations
and Applications for Registration," and by deleting the roman numeral "IX".
Section 15. Exhibit A of the Agreement is amended by adding the
following definitions:
"Escrow Agent" means the escrow agent acting as
such from time to time pursuant to the terms of the
Escrow Agreement.
"Escrow Agreement" means the Escrow Agreement
in the form contemplated by Attachment XXXI.
"Escrow Funds" means any funds held from time
to time by the Escrow Agent under the Escrow Agreement.
"Manufacturing Agreement" means the
Manufacturing Agreement in the form contemplated by
Attachment XXXII.
"Mexico Closing Date" means the Mexico Closing
Date as defined in the Manufacturing Agreement.
Section 16. The definition of "Transaction Documents" set forth in
Exhibit A of the Agreement is deleted in its entirety and the following is
inserted in its place and stead:
""Transaction Documents" means this Agreement,
the Assignment and Assumption Agreements, the Services
Agreements, the Intellectual Property Assignment
Agreements, the Cross License Agreement, the Trademark
License Agreement, the Kuantan Transition Agreement, the
Manufacturing Agreement, the Escrow Agreement, the
Supply Agreement contemplated by Section 2.01(viii), the
Distribution Services Agreement (United States), and the
Distribution Services Agreement (Latin America), and any
exhibits or attachments to any of the foregoing, as the
same may be amended from time to time."
Section 17. The definition of "Transferred Assets" set forth in Exhibit
A of the Agreement is amended by inserting "or the Mexico Closing Date, as the
case may be," following the phrase "Closing Date" throughout the lead-in
language in such definition, by deleting the word "and" following the semi-colon
in clause (xiv), by deleting the "." at the end of clause (xv) and inserting in
its place and stead ";" and by adding the following proviso at the end of the
definition of "Transferred Assets":
"provided, however, that assets, properties,
rights, licenses, permits, Contracts, or causes of
actions located at or relating to the Queretaro Property
shall only be "Transferred Assets" on and as of the
Mexico Closing Date."
Section 18. The first sentence of Section D.01 of Exhibit D of the
Agreement is deleted in its entirety and the following is inserted in its place
and stead:
"On the Closing Date, the employment of all
Active Employees of the HPG Business, including
employees based in the HPG Business' headquarters in
Shelton, Connecticut, employees based in the Asheboro
Property, and the employees listed on Attachment XV, but
excluding the employees based at the Kuantan Facility
and the Queretaro Property, shall be transferred to
Buyer Companies. On the Mexico Closing Date, the
employment of all Active Employees of the HPG Business
based in the Queretaro Property shall be transferred to
Buyer Companies. Buyer and Buyer Companies shall ensure
that the transfer of employment of all such persons
shall be considered continuous employment under
Applicable Law."
Section 19. The third sentence of the original draft of Section D.01 of
Exhibit D of the Agreement is amended by inserting "(or with regard to Active
Employees of the HPG Business at the Queretaro Property, on or after the Mexico
Closing Date)" after the phrase "Closing Date".
Section 20. The last sentence of Section D.02 of Exhibit D of the
Agreement is amended by inserting "(or with regard to Active Employees of the
HPG Business at the Queretaro Property, on or after the Mexico Closing Date)"
after the phrase "Closing Date".
Section 21. The first sentence of Section D.03 of Exhibit D of the
Agreement is amended by inserting the word "applicable" before each of the
references to "Closing Date".
Section 22. The first sentence of Section D.05 of Exhibit D of the
Agreement is amended by inserting "(or with regard to Active Employees of the
HPG Business at the Queretaro Property, on or after the Mexico Closing Date)"
after the phrase "Closing Date".
Section 23. The second sentence of Section D.05 of Exhibit D of the
Agreement is amended by inserting "or the closing of the transactions
contemplated by Section 7 of the Manufacturing Agreement" after the word
"Closing" and before the "," and by inserting "(or with regard to Active
Employees of the HPG Business at the Queretaro Property, on or after the Mexico
Closing Date)" after the phrase "Closing Date".
Section 24. The third sentence of Section D.05 of Exhibit D of the
Agreement is amended by inserting "(or with regard to Active Employees of the
HPG Business at the Queretaro Property, on or after the Mexico Closing Date)"
after the phrase "Closing Date".
Section 25. The second sentence of Section D.06 of Exhibit D of the
Agreement is revised by deleting the phrase ", David O'Connor, Kaj Koft"
following the name Rafael Diaz.
Section 26. Section D.11 of Exhibit D of the Agreement is deleted in
its entirety and the following is inserted in its place and stead:
"D.11 General. For a period of one year
following the Closing Date (or with regard to Active
Employees of the HPG Business at the Queretaro Property,
the Mexico Closing Date), Buyer shall ensure that the
Non-US Transferred Employees are provided benefits that
are comparable in the aggregate to those provided under
the Non-US Benefit Arrangements as in effect for those
Non-US Transferred Employees immediately prior to the
Closing Date (or the Mexico Closing Date, as the case
may be), it being understood that each Non-US
Transferred Employee shall receive credit for all
service and compensation with Seller Companies and any
of their predecessors or Affiliates prior to the Closing
Date (or the Mexico Closing Date, as the case may be)
for all purposes to the same extent that service and
compensation are recognized immediately prior to such
date."
Section 27. Section D.12 of Exhibit D of the Agreement is deleted in
its entirety and the following is inserted in its place and stead:
"D.12 Severance/Termination Indemnities. In
furtherance and not in limitation of the provisions of
Section D.11, for a period of at least one year from the
Closing Date (or with regard to Active Employees of the
HPG Business at the Queretaro Property, the Mexico
Closing Date), Buyer shall provide severance programs
and termination indemnities with substantially the same
terms and conditions as those provided by Seller
Companies to the Non-US Transferred Employees
immediately prior to the Closing Date (or with regard to
Active Employees of the HPG Business at the Queretaro
Property, the Mexico Closing Date) and agrees to pay any
benefit to Non-US Transferred Employees to which they
may be entitled under such severance programs and/or
termination indemnities with respect to events that
occur as a result of the Closing or the closing of the
transactions contemplated by Section 7 of the
Manufacturing Agreement, and on or after such date."
Section 28. Section D.13 of Exhibit D of the Agreement is deleted in
its entirety and the following is inserted in its place and stead:
"D.13 Mexico Plan. In furtherance and not in
limitation of the provisions of Section D.11:
(a) Prior to or as soon as practicable after
the Mexico Closing Date, Buyer shall designate or
establish a plan ("Buyer's Mexico Plan"), providing
pension and seniority premiums to Non-US Transferred
Employees who were participants in the Black & Decker
S.A. de C.V. Pension and Seniority Premium Plan
("Seller's Mexico Plan"). Buyer's Mexico Plan shall
cover all Non-US Transferred Employees who were
participants in the Seller's Mexico Plan, each of whom
shall be eligible to participate therein on
substantially the same terms and conditions as provided
to the Non-US Transferred Employees under Seller's
Mexico Plan immediately prior to the Mexico Closing
Date. Buyer covenants and agrees that service with the
Seller or any of its predecessors or Affiliates prior to
the Mexico Closing Date that is recognized for any
purpose under the Seller's Mexico Plan will be
recognized by Buyer's Mexico Plan for such purpose.
(b) As soon as practicable after the Mexico
Closing Date, the Seller shall cause assets of the
Seller's Mexico Plan to be transferred to the Buyer's
Mexico Plan in an amount that is equal to the sum of (i)
the accrued current liability ("ABO") as reported on the
funding valuation report of Watson Wyatt Worldwide for
Seller's Mexico Plan as of January 1, 1998 plus (ii) 50%
of the difference between the actuarial accrued
liability ("PBO") as reported on such funding valuation
report under Seller's Mexico Plan and ABO as reported on
such funding valuation report. For purposes of making
this determination, the assets and liabilities of each
component of Seller's Mexico Plan shall be aggregated
and the calculations of ABO and PBO shall relate solely
to the Non-US Transferred Employees and will be updated
through the Mexico Closing Date.
(c) Upon the transfer of assets from Seller's
Mexico Plan to Buyer's Mexico Plan as contemplated
herein, Buyer and its Affiliates shall assume all of the
liabilities and obligations of Black & Decker or any of
its Affiliates in respect of the benefit obligations of
all Non-US Transferred Employees and their beneficiaries
under Seller's Mexico Plan.
Section 29. Section D.17 of Exhibit D of the Agreement is amended by
inserting "(or in the case of Active Employees of the HPG Business in Mexico, on
or after the Mexico Closing Date)" after the word "Closing" in clauses (i) and
(ii).
Section 30. Section D.18 of Exhibit D of the Agreement is deleted in
its entirety.
Section 31. Section D.19 of Exhibit D of the Agreement is renumbered
Section D.18.
Section 32. Section D.19 of Exhibit D of the Agreement (which is being
renumbered pursuant to Section 30 above as Section D.18) is amended by inserting
"(or in the case of Active Employees of the HPG Business in Mexico, on or after
the Mexico Closing Date)" after the phrase "Closing Date".
Section 33. Attachment IV is deleted in its entirety and the Assignment
of Foreign Trademarks, Trademark Registrations and Applications for Registration
attached to this Amendment as Exhibit A is inserted in its place and stead.
Section 34. Attachment VII is deleted in its entirety and the Trademark
License Agreement attached to this Amendment as Exhibit B is inserted in its
place and stead.
Section 35. Attachment X is deleted in its entirety and the Cross
License Agreement attached to this Amendment as Exhibit C is inserted in its
place and stead.
Section 36. Table 1 and Table 2 of Attachment XII are deleted in their
entirety and Table 1 and Table 2 attached to this Amendment as Exhibit D are
inserted in their place and stead.
Section 37. Item I.D. of Schedule B.18 to the Agreement titled "United
States Severance Programs" is amended by inserting "(covers all salaried exempt
employees)" following the reference in number 2 to "The Black & Decker Exempt
Employees Severance Pay Plan," inserting "(covers all salaried and hourly
nonexempt employees)" following the reference in number 3 to "The Black & Decker
Nonexempt Employees Severance Pay Plan," and adding a new number 5 in Item I.D.
as follows: "For all employees at the Asheboro Property employed prior to April
27, 1984, severance benefits consisting of two weeks pay for each of the
employee's full years of continuous service, plus one-half week's pay for each
additional three months of continuous service at the time of termination, and
related Education & Retraining Assistance of up to $1,800 in accordance with the
Asheboro Property Employee Handbook."
Section 38. The list of Licensed Software in Schedule B.19 to the
Agreement is amended by adding the following:
Licensor Description
Intemec Bar coding for plant and D.C. operations
Section 39. For purposes of the Agreement, Seller and Buyer agree that
sales by the HPG Business to agencies of the United States Armed Forces for sale
in Armed Forces owned outlets and stores on Armed Forces bases, whether or not
such outlets or stores are located in Designated Countries, shall be considered
sales in the United States.
Section 40. Attachment A-2 to Schedule A to the Agreement is deleted in
its entirety and Attachment A-2 attached to this Amendment as Exhibit E is
inserted in its place and stead.
IN WITNESS WHEREOF, the parties hereto caused this Amendment to be duly
executed by their respective authorized officers on the day and year first above
written.
THE BLACK & DECKER CORPORATION
By: /s/ MARK M. ROTHLEITNER
Vice President and Treasurer
WINDMERE-DURABLE HOLDINGS, INC.
By: /s/ DAVID M. FRIEDSON
Chairman, President and Chief
Executive Officer