AMENDMENT NO. 1
Dated as of September 21, 1998
to
TRANSACTION AGREEMENT
Dated as of July 12, 1998
By and Between
THE BLACK & XXXXXX CORPORATION
and
XXXXXX HOLDING AG
AMENDMENT NO. 1 TO TRANSACTION AGREEMENT
This Amendment No. 1 to Transaction Agreement (the "Amendment") is made
as of the 21st day of September, 1998, by and between among The Black & Xxxxxx
Corporation, a Maryland corporation ("Black & Xxxxxx"), and Xxxxxx Holding AG, a
Swiss corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Black & Xxxxxx, through certain of its direct and indirect
Subsidiaries, is engaged in the Glass Machinery Business;
WHEREAS, Black & Xxxxxx and Buyer entered into a Transaction Agreement
dated as of July 12, 1998 (the "Agreement") pursuant to which Black & Xxxxxx
agreed to sell and Buyer agreed to purchase the Glass Machinery Business upon
the terms and subject to the conditions set forth therein;
WHEREAS, Black & Xxxxxx 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. Definitions. Capitalized terms used but not defined herein
have the meanings given to them in the Agreement.
Section 2. Amendments. The Transaction Agreement is hereby amended as
follows.
2.01. Employment Matters. The following amendments relate to
the provisions of the Transaction Agreement that relate to employment matters.
(a) U.S. Benefit Arrangements. Certain welfare
benefits described on Schedule B.20 (medical, dental, life and disability
benefits) will continue to be provided to the US Transferred Employees by Black
& Xxxxxx on an interim basis pursuant to a Benefit Continuation Agreement
between Black & Xxxxxx and the Buyer to be executed at the Closing.
(b) Pension Asset Transfers. The fund to fund asset
transfers from Seller's U.S. Salaried Pension Plan and Seller's U.S. Hourly
Pension Plan, as contemplated in Sections D.08 and D.09, will be made in the
amounts required under Section 414(l) of the Internal Revenue Code as determined
by the PBGC. The fund to fund asset transfer from Seller's U.K. Pension Plan, as
contemplated in Section D.15(b), will be made in the amount determined by the
Trustees of the Seller's U.K. Pension Plan subject to the consent of each Non-US
Transferred Employee that participates in such plan. Such fund to fund transfers
will be included as pension assets in the Proposed Final Net Tangible Asset
Amount and the Final Net Tangible Asset Amount pursuant to Section 2.04(b) and
Attachment XVIII; provided that the pension assets so included in the Proposed
Final Net Tangible Asset Amount and the Final Net Tangible Asset Amount shall
not exceed the sum of (i) the pension liabilities included in the Proposed Final
Net Tangible Asset Amount and the Final Net Tangible Asset Amount (determined in
accordance with Attachment XVIII), plus (ii) $400,000. An example of the
application of this section using hypothetical amounts is attached as Exhibit A.
(c) Swedish Pension Liability. In accordance with
Section D.19(a), Black & Xxxxxx has made payment to the Swedish pension
authorities in the amount specified by the Swedish pension authorities to
eliminate the unfunded Swedish pension liability. The amount so paid may be
subject to some adjustment to be specified by the Swedish pension authorities
based on updated census data. According to the Swedish pension authorities such
adjustment will not be calculated until after January 1, 1999. B&D will be
responsible for any additional payment required by the adjustment and will be
entitled to any refund if the adjustment results in an overpayment having been
made by B&D and any additional payment requirement shall be an Excluded
Liability or an Excluded Asset, respectively.
(d) Individual Employee Severance Agreements. Prior
to the Closing one of the Employees listed on Schedule B.20 as having an
individual employee severance agreement has been terminated and the severance
benefits described in such agreement have been paid in full prior to the
Closing. Another of the Employees listed on Schedule B.20 as having an
individual employee severance agreement will be terminated after the Closing.
Black & Xxxxxx will be responsible for paying the severance benefits described
in such agreement to the Employee who will be terminated after the Closing Date
and such obligation shall be an Excluded Liability.
(e) Black & Xxxxxx Stock Option Plan. The Buyer shall
assume no liability of Black & Xxxxxx to Employees under the Black & Xxxxxx
Stock Option Plan and such liabilities shall be Excluded Liabilities. The U.S.
Employees who participate in the Black & Xxxxxx Stock Option Plan have been
notified by Black & Xxxxxx of their continuing rights under such plan.
2.02. Kishinev Matter. Since the date of execution of the
Transaction Agreement, a claim has been made against Emhart Deutschland GmbH by
Hermes relating to the Kishinev Matter (as defined in the Supplemental Asset
Sale Agreement between Emhart Deutschland GmbH, Emhart Glass S.A. (formerly, New
Emhart Glass S.A.), Emhart Glass GmbH and Emhart Glass Manufacturing GmbH (the
"German Supplemental Agreement")). The Kishinev Matter shall be deemed to have
been disclosed as a threatened claim under Schedule B.11. Black & Xxxxxx has
retained responsibility for the claim being made by Hermes by treating such
claim as an Excluded Liability under the German Supplemental Agreement and has
retained certain rights against third parties by treating such rights as
Excluded Assets under the German Supplemental Agreement.
2.03. Anchor Bankruptcy Matter. Emhart Glass Machinery (U.S.),
Inc. has unsecured creditor claims against the Anchor bankruptcy estate and
preference claims have been asserted against Emhart Glass Machinery (U.S.), Inc
by the trustee in the bankruptcy proceeding described in Schedule B.11. Emhart
Glass Machinery (U.S.), Inc. will attempt to finally settle the claims by the
date that the statement of the Proposed Final Net Tangible Asset Amount is due.
If such unsecured creditor claims and preference claims are so finally settled,
such claims by and against Emhart Glass Machinery (U.S.), Inc. will be included
in the statement of the Proposed Final Net Tangible Asset Amount and in the
Final Net Tangible Asset Amount. If such unsecured creditor claims and
preference claims are not so finally settled by such date, any assets,
liabilities and reserves relating to such claims will not be included in the
statement of the Proposed Final Net Tangible Asset Amount and in the Final Net
Tangible Asset Amount and shall be treated as Excluded Assets and Excluded
Liabilities, respectively.
2.04. Cash. The parties have agreed to transfer to the Buyer
Companies certain bank accounts used by the Glass Machinery Units. Therefore,
clause (i) of the definition of Excluded Assets is hereby amended to add to the
end of such clause (i): "or cash or cash equivalents that are otherwise
transferred to a Buyer Company on the Closing Date."
2.05 Intellectual Property. The following amendments relate to
the provisions of the Transaction Agreement that relate to Intellectual Property
matters.
(a) Registered Patents and Trademarks. The parties
have agreed that beneficial title to the registered patents and trademarks of a
Glass Machinery Share Company would be transferred to one of the Sellers of
Transferred Assets prior to the Closing and that beneficial title to all such
registered patents and trademarks will be transferred to Emhart Glass S.A.
(formerly, "New Emhart Glass S.A.") by assignment at the Closing.
(b) Trademark License Agreement. The parties have
agreed that a Trademark License Agreement will be executed at the Closing.
2.06 Emhart (U.K.) Ltd.. The following amendments relate to
the provisions of the Transaction Agreement that relate to the sale of the
shares of Emhart (U.K.) Ltd.
(a) Capital Stock. Since the date of the Transaction
Agreement, Emhart (U.K.) Ltd. has issued an additional 500 shares of capital
stock to Emhart International Ltd. The relevant disclosures on Schedule B.03 are
hereby amended to reflect that the number of authorized and issued shares of
capital stock of Emhart (U.K.) Ltd. is 38,000, all of which are held by Emhart
International Ltd. and are being transferred to Xxxxxx Holding A.G. pursuant to
the Supplemental Share Sale Agreement between Emhart International Ltd. and
Xxxxxx Holding A.G.
(b) Midland Bank. Emhart (U.K.) Ltd. is a party to a
guaranty of Black & Xxxxxx credit facilities with Midland Bank. Black & Xxxxxx
will have Emhart (U.K.) Ltd. released from such guaranty and will indemnify
Buyer against any claims made against Emhart (U.K.) Ltd. under such guaranty.
2.07 Allocation. With respect to the allocation of the
Exchange Consideration pursuant to Section 2.02(b), Net Asset Values of the
Glass Machinery Units listed on Attachment IV shall be determined using the same
accounting methods as are used in the determination of the Final Net Tangible
Asset Amount.
2.08 Madrid and Moscow Offices.
(a) Madrid Office. There is an existing, written
agreement between Sistemas de Fijacion Xxxxxx and Emhart Srl. regarding the
provision of Madrid office space and the administration of Xx. Xxxxxxx'x payroll
for Emhart Srl. that will remain in effect after the Closing.
(b) Moscow Office. Xxxxxxxxx Xxxxxxxx, is on the
payroll of Black & Xxxxxx GmbH and Black & Xxxxxx GmbH provides office space and
office support to Xx. Xxxxxxxx pursuant to a written agreement between Black &
Xxxxxx GmbH and Emhart Deutschland GmbH that is being assigned to one of the
Buyers pursuant German Supplemental Agreement. Since Xx. Xxxxxxxx will,
therefor, not be a Transferred Employee, his name is hereby removed from
Attachment XVI.
2.09 Emhart Sweden A.B.. The Buyer agrees that it will cause
Emhart Sweden A.B. not to declare and pay dividends prior to January 1, 1999.
2.10 Environmental Matters. The environmental matters
described below were ascertained by Buyer as the result of the investigations
that Buyer had conducted by Zurich Insurance Company pursuant to Section 6.02.
Each such matter shall be deemed to have been disclosed in Schedule B.15. The
parties agree to the following amendments to the Transaction Agreement with
respect to such matters.
(a) Indemnification Limitation. One hundred percent
shall be substituted for the 75% and 50% limitations contained in Section
10.04(b)(ii) with respect to Black & Xxxxxx'x indemnification obligations under
clauses (iii)(a) and (iii)(b) of Section 10.02(b) arising out of the following
conditions described in the reports prepared by Zurich Insurance Company for
Buyer it being agreed that any Remedial Action conducted with respect to such
conditions shall be conducted in accordance with Section 10.03(b) of the
Transaction Agreement:
(i) Orebro Facility. (A) Diesel contaminated
soil; (B) Lack of spill prevention management; and (C) Oil residue in catch
basin and drainage pipe.
(ii) Sundsvall Facility. (A) Secondary
Containment Upgrade; (B) Asbestos wrapping around piping; and (C) Testing for
PCBs in window insulation.
(iii) Laclede Facility. Failure to have
obtained regulatory approval of disposal of NORM in solid waste landfill.
(b) Contacts with Governmental Authorities.
(i) Elmira Facility. Black & Xxxxxx agrees
that Buyer's contacting the relevant Governmental Authorities to confirm that
the municipal incinerator ash used as fill at the facility does not contain
levels of heavy metals that are below regulatory reporting thresholds will not
affect Buyer's rights to indemnification for such condition.
(ii) Sundsvall Facility. Black & Xxxxxx
agrees that Buyer's contacting the relevant Governmental Authorities to confirm
that the window insulation does not contain PCBs will not affect Buyer's rights
to indemnification for such condition.
2.11 Canceled Orders. The parties agree that the Transferred
Assets affected as the result of the cancellation of the orders for machines
prior to the Closing (such as the cancellation by Rosalko) shall be included in
the determination of the Proposed Final Net Tangible Asset Amount and the Final
Net Tangible Asset Amount after taking into account the cancellation.
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:__________________________________
Name:
Title:
XXXXXX HOLDING AG
By:__________________________________
Name:
Title:
EXHIBIT A
EXAMPLE OF THE APPLICATION OF SECTION 2.01(b)
Pension Liabilities (in 000s) to be determined pursuant to Attachment XVII.
Total PBO Liability Included on
Statements of Proposed Final Net
Tangible Asset Amount and Final
Net Tangible Asset Amount
Pension Plan PBO Liability Transferred
U.S. Hourly 3,500
U.S. Salaried 7,900
U.K. 1,500
Swiss 2,000
German 2,700
Total 17,600 17,600
Pension Assets (in 000s) to be determined pursuant to Attachment XVII.
Total Pension Assets Included on
Statements of Proposed Final Net
Tangible Asset Amount and Final
Net Tangible Asset Amount
Pension Plan Pension Assets Transferred
U.S. Hourly 4,400
U.S. Salaried 10,000
U.K. 2,300
Swiss 3,000
German 0
Total 19,700 18,000*
* Total Pension Assets Included on Statements of Proposed Final Net Tangible
Asset Amount and Final Net Tangible Asset Amount not to exceed Total PBO
Liability plus $400.
Post Retirement Benefits Other Than Pensions (FASB No. 106) and Post Employment
Benefits (FASB No. 112) to be included on Statements of Proposed Final Net
Tangible Asset Amount and Final Net Tangible Asset Amount in the amounts
determined pursuant to Attachment XVII.