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EXHIBIT 99.2
AMENDMENT NO. 1
DATED AS OF JUNE 26, 1998
TO
TRANSACTION AGREEMENT
DATED AS OF MAY 10, 1998
BY AND BETWEEN
THE BLACK & XXXXXX CORPORATION
AND
WINDMERE-DURABLE HOLDINGS, INC.
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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 & Xxxxxx
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
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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 & Xxxxxx X.X. de C.V., and Buyer shall
cause its wholly owned subsidiary, Household Products Limited
de Mexico, S. de X.X. 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:
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"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 xxxxx, 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
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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
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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".
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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 ", Xxxxx X'Xxxxxx, Xxx Xxxx"
following the name Xxxxxx Xxxx.
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
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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 & Xxxxxx X.X. 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 Xxxxxx Xxxxx 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 & Xxxxxx 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.
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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 & Xxxxxx Exempt
Employees Severance Pay Plan," inserting "(covers all salaried and hourly
nonexempt employees)" following the reference in number 3 to "The Black & Xxxxxx
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
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Intemec Bar coding for plant and
D.C. operations
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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.
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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 & XXXXXX CORPORATION
By: /s/
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WINDMERE-DURABLE HOLDINGS, INC.
By /s/
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