Exhibit 10.5
 
 
 
AMENDMENT NO. 2 TO THE
AMENDED AND RESTATED CREDIT AGREEMENT
 
                               Dated as of  March 12, 2010
 
AMENDMENT NO. 2 TO THE AMENDED AND RESTATED CREDIT AGREEMENT among STANLEY BLACK
& DECKER, INC. (formerly known as The Stanley Works), a Connecticut corporation
(the “Borrower”), the Lenders executing this Amendment on the signature pages
hereto and Citibank, N.A., as agent (the “Agent”) for the Lenders.
 
PRELIMINARY STATEMENTS:
 
(1)           The Borrower, the banks, financial institutions and other
institutional lenders parties to the Credit Agreement referred to below
(collectively, the “Lenders”) and the Agent have entered into an Amended and
Restated Credit Agreement dated as of February 27, 2008, and Amendment No. 1
thereto dated as of February 17, 2009 (such Credit Agreement, as so amended, the
“Credit Agreement”).  Capitalized terms not otherwise defined in this Amendment
have the same meanings as specified in the Credit Agreement.
 
(2)           The Borrower and the Required Lenders have agreed to further amend
the Credit Agreement as hereinafter set forth.
 
SECTION 1.   Amendments to Credit Agreement.  The Credit Agreement is, effective
as of the date hereof and subject to the satisfaction of the conditions
precedent set forth in Section 2, hereby amended as follows:
 
(a)           The definitions of “Applicable Facility Fee Rate”, “Base Rate”,
“EBITDA”, “Interest Coverage Ratio” and “Interest Expense” in Section 1.01 are
amended in full to read as follows:
 
“Applicable Facility Fee Rate” means, on any date, a rate per annum equal to (i)
0.150% if on such date the Company’s outstanding Long-Term Indebtedness is rated
A+ or higher by Standard & Poor’s, A1 or higher by Moody’s, or A+ or higher by
Fitch, (ii) 0.200% if on such date clause (i) is inapplicable and the Company’s
outstanding Long-Term Indebtedness is rated A or higher by Standard & Poor’s, A2
or higher by Moody’s, or A or higher by Fitch, (iii) 0.250% if on such date
clauses (i) and (ii) are inapplicable and the Company’s outstanding Long-Term
Indebtedness is rated A- or higher by Standard & Poor’s, A3 or higher by
Moody’s, or A- or higher by Fitch, (iv) 0.300% if on such date clauses (i), (ii)
and (iii) are inapplicable and the Company’s outstanding Long-Term Indebtedness
is rated BBB+ or higher by Standard & Poor’s, Baa1 or higher by Moody’s, or BBB+
or higher by Fitch, and (v) 0.375% if on such date clauses (i), (ii), (iii) and
(iv) are inapplicable (including if such Long-Term Indebtedness is no longer
rated by any agency); provided that if the respective levels of the Company’s
outstanding Long-Term Indebtedness credit ratings differ, the “Applicable
Facility Fee Rate” will be determined based on, (a) if two of the ratings are at
the same level and the other rating is higher or lower than those same ratings,
the level corresponding to the two same ratings shall apply and (b) if each of
the three ratings falls within different levels, then the level corresponding to
the rating that is in between the highest and the lowest ratings shall apply.
 

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“Base Rate” means a fluctuating interest rate per annum as shall be in effect
from time to time, which rate per annum shall at all times be equal to the
highest of:
 
(a)  the rate of interest announced publicly by the Reference Bank in New York,
New York, from time to time, as its base rate;
 
(b)  1/2 of one percent per annum above the Federal Funds Rate; and
 
(c)  the rate equal to the Eurocurrency Rate for a Dollar denominated Advance
having an Interest Period of one month determined for each day that a Base Rate
Loan is outstanding (and in respect of any day that is not a Banking Day, such
rate as in effect on the immediately preceding Banking Day) plus 1.00% per
annum.
 
“EBITDA” means, for any period, the sum (without duplication) for the Company
and its Consolidated Subsidiaries on a consolidated basis of the following: (a)
net income for such period plus (b) to the extent deducted in determining net
income for such period, the sum of (i) depreciation and amortization for such
period, (ii) Interest Expense for such period and (iii) taxes for such
period.  Notwithstanding the foregoing, (1) in calculating EBITDA for any period
that includes one or more Restructuring Periods, EBITDA shall be increased by an
amount equal to the Applicable Restructuring Charges for any such Restructuring
Periods, (2) in calculating EBITDA for any period, any impairment charges or
asset write-offs, in each case pursuant to Financial Accounting Standards
Board’s Staff Position Accounting Principles Board Opinion No. 144 (“Accounting
for the Impairment or Disposal of Long-Lived Assets (Issued 8/01)”), shall be
excluded, (3) in calculating EBITDA for any period, non-cash charges arising
from purchase accounting adjustments (including the effects of such adjustments
pushed down to such Person and its Subsidiaries) in component amounts required
or permitted by GAAP, resulting from the write-up of assets or application of
purchase accounting in relation to any consummated acquisition or the
amortization, depreciation, or write-off of any amounts thereof, net of taxes,
shall be excluded, and (4) in calculating EBITDA for any period, charges
associated with stock-based compensation shall be excluded.  For the purpose of
calculating EBITDA for any period following the acquisition of The Black &
Decker Corporation, EBITDA for such period shall be calculated after giving pro
forma effect to such acquisition as if such acquisition occurred on the first
day of such period.
 
“Interest Coverage Ratio” means, for any period of four consecutive fiscal
quarters, the ratio of (a) EBITDA for such period to (b) Interest Expense for
such period.
 
“Interest Expense” means, for any period, the sum (determined without
duplication) of the aggregate amount of interest reported in respect of such
period on the Indebtedness of the Company and its Consolidated Subsidiaries on a
consolidated basis, including, without limitation, the interest portion of
payments under Capital Lease obligations and any capitalized interest but
excluding imputed (non-cash) interest expense in respect of convertible bonds
issued by the Company or any of its Consolidated Subsidiaries as calculated in
accordance with the Financial Accounting Standards Board’s Staff Position
Accounting Principles Board Opinion No. 14-1 (“Accounting for Convertible Debt
Instruments That May be Settled in Cash upon Conversion (Including Partial Cash
Settlement)”), minus (i) interest income of the Company and its Consolidated
Subsidiaries on a consolidated basis reported in respect of such period, (ii)
interest on deferred compensation reported in respect of such period, and (iii)
any income/expense in respect of such period associated with spot-to-forward
differences or points on foreign currency trades that are included in interest
income/expense as a result of Statement of Financial Accounting Standards No.
133, as amended and interpreted.  For the purpose of calculating Interest
Expense for any period following the acquisition of The Black & Decker
Corporation, Interest Expense for such period shall be calculated after giving
pro forma effect to such acquisition as if such acquisition occurred on the
first day of such period.
 
 
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                (b)           The definition of “Applicable Eurocurrency Margin”
in Section 1.01 is amended by (i) deleting the figure “0.75%” and replacing it
with “the Floor” in both places such figure appears and (i) deleting the figure
“2.50%” and replacing it with “the Cap” in the three places such figure appears.
 
(c)           Section 1.01 is further amended by adding the following
definitions in the appropriate alphabetical order:
 
“Applicable Base Rate Margin” means, on any day, a rate per annum equal to the
higher of (a) the Applicable Eurocurrency Margin for such day minus 1.00% and
(b) 0.00%.
 
“Applicable Restructuring Charge” means
 
           (a)           for any Restructuring Period falling in the Company’s
fiscal year 2009, the restructuring charges reported in the Company’s SEC
Filings for such fiscal quarter; provided that the sum of the Applicable
Restructuring Charges for all of the Restructuring Periods in the Company’s
fiscal year 2009 will not exceed $50,000,000 in the aggregate; and

           (b)           for any Restructuring Period falling in the Company’s
fiscal year 2010, 2011, 2012, or 2013, amounts relating to one or more of the
following: (i) restructuring charges, including, without limitation, the effect
of reconstruction, recommissioning or reconfiguration of fixed assets for
alternative uses, store closure, office closure, plant closure, facility
consolidations, downsizing, shutdown costs (including future lease commitments
and contract termination costs with respect thereto), curtailments or
modifications to pension and post-retirement employee benefit plans, retention,
severance, system establishment costs, and acquisition integration costs; (ii)
change of control payments and transaction fees; (iii) performance-based bonus
payments to Nolan Archibald; (iv) all expenses and charges related to any stock
based compensation; (v) non-cash inventory step-up charges; and (vi) liabilities
under Section 280G of the Internal Revenue Code and gross-ups related thereto;
provided that the sum of the Applicable Restructuring Charges for all of the
Restructuring Periods in the Company’s fiscal years 2010, 2011, 2012, and 2013
will not exceed $1,200,000,000 in the aggregate, of which not more than
$900,000,000 is cash.
 
 
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“Cap” means, on any date, a rate per annum equal to (i) 2.500% if on such date
the Company’s outstanding Long-Term Indebtedness is rated BBB+ or higher by
Standard & Poor’s, Baa1 or higher by Moody’s, or BBB+ or higher by Fitch, and
(ii) 3.000% if on such date clause (i) is inapplicable (including if such
Long-Term Indebtedness is no longer rated by any agency); provided that if the
respective levels of the Company’s outstanding Long-Term Indebtedness credit
ratings differ, the “Cap” will be determined based on, (a) if two of the ratings
are at the same level and the other rating is higher or lower than those same
ratings, the level corresponding to the two same ratings shall apply and (b) if
each of the three ratings falls within different levels, then the level
corresponding to the rating that is in between the highest and the lowest
ratings shall apply.
 
“Floor” means, on any date, a rate per annum equal to (i) 0.750% if on such date
the Company’s outstanding Long-Term Indebtedness is rated A- or higher by
Standard & Poor’s, A3 or higher by Moody’s, or A- or higher by Fitch, (ii)
1.000% if on such date clause (i) is inapplicable and the Company’s outstanding
Long-Term Indebtedness is rated BBB+ or higher by Standard & Poor’s, Baa1 or
higher by Moody’s, or BBB+ or higher by Fitch, and (iii) 1.500% if on such date
clauses (i) and (ii) are inapplicable (including if such Long-Term Indebtedness
is no longer rated by any agency); provided that if the respective levels of the
Company’s outstanding Long-Term Indebtedness credit ratings differ, the “Floor”
will be determined based on, (a) if two of the ratings are at the same level and
the other rating is higher or lower than those same ratings, the level
corresponding to the two same ratings shall apply and (b) if each of the three
ratings falls within different levels, then the level corresponding to the
rating that is in between the highest and the lowest ratings shall apply.
 
“Loan Parties” means, collectively, the Borrowers and the Subsidiary Guarantor.
 
           “Restructuring Period” means (a) if the Company reports taking any
restructuring charges during any quarter of its fiscal year 2009 in the
Company’s Exchange Act disclosure documents filed with the Securities and
Exchange Commission on Forms 8K, 10K or 10Q (or their equivalents) (the
Company’s “SEC Filings”), each such fiscal quarter of the Company during its
fiscal year 2009, and (b) each fiscal quarter of the Company during fiscal years
2010, 2011, 2012, and 2013.
 
“SEC Filings” has the meaning provided in the definition of “Restructuring
Period”.
 
“Subsidiary Guarantor” means The Black & Decker Corporation, a Maryland
corporation.
 
 
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“Subsidiary Guaranty” means the guaranty of the Subsidiary Guarantor, in form
and substance reasonably satisfactory to the Administrative Agent, delivered to
the Administrative Agent on or about the date that the Company acquires the
Subsidiary Guarantor.
 
(d)          Section 2.05(a) is amended by inserting immediately after the
phrase “Base Rate in effect from time to time” the phrase “plus the Applicable
Base Rate Margin”.
 
(e)           Section 3.02(i)(x) is amended by inserting immediately after the
parenthetical phrase “(other than the Excluded Representation”) the phrase “and
in Section 7 of the Subsidiary Guaranty”.
 
(f)           Section 5.02(a)(ix) is amended in full to read as follows:
 
(ix)  Liens on (A) any property existing at the time of acquisition but only if
the amount of outstanding Indebtedness secured thereby does not exceed the
lesser of the fair market value or the purchase price of the property so
purchased and (B) any property of The Black & Decker Corporation existing at the
time of acquisition;
 
(g)          Section 6.01(b) is amended by deleting the word “Borrower” and
replacing it with “Loan Party” in both places such word appears.
 
(h)          Section 6.01(g) is amended by deleting the figure “$25,000,000” and
replacing it with “$75,000,000” in both places such figure appears.
 
(i)           Section 6.01(h) is amended by restating clause (B) thereof in full
to read as follows:
 
(B) any Plan shall have an unfunded liability, which means the excess, if
any, of a Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over
the current value of that Plan’s assets, determined in accordance with the
assumptions used for funding that Plan pursuant to Section 412 of the Internal
Revenue Code for the applicable plan year
 
(j)           Section 6.01(i) is amended by deleting the figure “$25,000,000”
and replacing it with “$75,000,000”.
 
(k)          Section 8.02(a) is amended by deleting the word “Borrower” and
replacing it with “Loan Party”.
 
(l)           Section 8.07(b) is amended by deleting the word “Borrower” and
replacing it with “Loan Party” in both places such word appears.
 
(m)         Section 8.08(a) is amended by deleting the word “Borrower”  and
replacing it with “Loan Party” in each place such word appears.
 
SECTION 2.            Conditions of Effectiveness.  This Amendment shall become
effective as of the time of the delivery of all evidence referenced in clause
(f) below on the date (the “Amendment Effective Date”), which shall be on or
before June 30, 2010, as of which the Administrative Agent shall confirm to the
Company that it has received the following, each dated such day, in form and
substance satisfactory to the Administrative Agent:
 
(a)           Executed Counterparts.  Counterparts of this Amendment executed by
the Company and the Lenders party to the Credit Agreement constituting the
Required Lenders;
 
 
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(b)           Subsidiary Guaranty.  The Subsidiary Guaranty, in substantially
the form of Exhibit A to this Amendment, duly executed and delivered by the
Subsidiary Guarantor;
 
(c)           Authority and Approvals.  Certified copies of the resolutions of
the Board of Directors of the Subsidiary Guarantor (or equivalent documents)
authorizing and approving the Subsidiary Guaranty and the transactions
contemplated thereby and certified copies of all documents evidencing all
necessary corporate action and all other necessary action (corporate,
partnership or otherwise) and governmental approvals, if any, with respect to
the Subsidiary Guaranty;
 
(d)           Secretary’s or Assistant Secretary’s Certificate.  A certificate
of the Secretary or an Assistant Secretary of the Subsidiary Guarantor, dated
the Amendment Effective Date, certifying the names and true signatures of the
officers of the Subsidiary Guarantor authorized to execute and deliver the
Subsidiary Guaranty;
 
(e)           Legal Opinions.  An opinion of counsel to the Subsidiary
Guarantor, dated the Amendment Effective Date;
 
(f)           Acquisition of The Black & Decker Corporation.  Evidence
satisfactory to the Administrative Agent that Blue Jay Acquisition Corp. shall
have consummated the merger with The Black & Decker Corporation that is
contemplated by that certain Agreement and Plan of Merger dated as of November
2, 2009 by and among the Company, Blue Jay Acquisition Corp., and The Black &
Decker Corporation , together with evidence that the commitments under the
Five-Year Credit Agreement dated as of December 7, 2007 among The Black & Decker
Corporation, Black & Decker Luxembourg Finance S.C.A. and Black & Decker
Luxembourg S.aR.L., as borrowers, certain lenders parties thereto and Citibank,
N.A., as administrative agent for said lenders (the “B&D Facility”) have been or
concurrently with the Effective Date are being terminated and all amounts
payable under the B&D Facility have been paid; and
 
(g)           Fees and Expenses.  Payment by the Company in full of the costs,
expenses and fees as set forth in Section 8.04(a) of the Credit Agreement.
 
SECTION 3.            Representations and Warranties.  The Company represents
and warrants to the Lenders and the Administrative Agent, as to itself and each
of its Subsidiaries, that (a) the representations and warranties set forth in
Article IV of the Credit Agreement and in each of the other Loan Documents that
have been entered into by the Company or any of the Designated Borrowers are
true and correct in all material respects on the date hereof as if made on and
as of the date hereof (or, if any such representation or warranty is expressly
stated to have been made as of a specific date, such representation and warranty
shall be true and correct in all material respects as of such specific date) and
as if each reference in said Article IV to “this Agreement” included reference
to this Amendment; provided that (x) in Sections 4.01(f) and 4.01(h) of the
Credit Agreement, the reference to the Company’s Annual Report on Form 10-K for
the year ended December 29, 2007 shall be deemed to be a reference to the
Company’s Annual Report on Form 10-K for the fiscal year ended January 2, 2010,
each of the Company’s reports on Form 8-K and 10-Q during the period from
January 2, 2010 through and including the date of this Amendment and the
Subsidiary Guarantor’s Annual Report on Form 10-K for the year ended December
31, 2009 and (y) in Section 4.01(g) of the Credit Agreement, the reference to
December 29, 2007 shall be deemed to be a reference to January 2, 2010 and (b)
no Default or Event of Default has occurred and is continuing.
 
 
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SECTION 4.            Reference to and Effect on the Loan Documents.  (a)  On
and after the effectiveness of this Amendment, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import
referring to the Credit Agreement, and each reference in the Notes and each of
the other Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or
words of like import referring to the Credit Agreement, shall mean and be a
reference to the Credit Agreement, as amended by this Amendment.
 
(b)           The Credit Agreement, the Notes and each of the other Loan
Documents, as specifically amended by this Amendment, are and shall continue to
be in full force and effect and are hereby in all respects ratified and
confirmed.
 
(c)           The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Lender or the Agent under any of the Loan Documents, nor
constitute a waiver of any provision of any of the Loan Documents.
 
SECTION 5.            Costs and Expenses.  The Borrower agrees to pay on demand
all costs and expenses of the Agent in connection with the preparation,
execution, delivery, administration, modification and amendment of this
Amendment and the other instruments and documents to be delivered hereunder
(including, without limitation, the reasonable fees and expenses of counsel for
the Agent) in accordance with the terms of Section 8.04 of the Credit Agreement.
 
SECTION 6.            Execution in Counterparts.  This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same
agreement.  Delivery of an executed counterpart of a signature page to this
Amendment by telecopier or other electronic communication shall be effective as
delivery of a manually executed counterpart of this Amendment.
 
SECTION 7.            Governing Law.  This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
 
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
 
STANLEY BLACK & DECKER, INC. (formerly
known as The Stanley Works)
 
By
/s/ Craig A. Douglas   
Name:  Craig A. Douglas
 
Title:    VP & Treasurer

 
 
CITIBANK, N.A.,
as Agent and as Lender
 
By
/s/ Carolyn Kee   
Name:  Carolyn Kee 
 
Title:    Vice President

BANK OF AMERICA      
By
/s/ Jeffrey J. McLaughlin   
Name:  Jeffrey J. McLaughlin
 
Title:    SVP

 
CITIBANK, N.A.,
as Agent and as Lender
 
By
/s/ Carolyn Kee   
Name:  Carolyn Kee 
 
Title:    Vice President

 
 
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BANK OF AMERICA      
By
/s/ Jeffrey M. McLaughlin   
Name:  Jeffrey M. McLaughlin
 
Title:    SVP

 

J.P. MORGAN CHASE BANK N.A.      
By
 /s/ Anthony W. White   
Name:  Anthony W. White
 
Title:    Vice President

 
 

BARCLAYS BANK PLC      
By
/s/ Kevin Cullen   
Name:  Kevin Cullen
 
Title:    Director

 
 

BNP PARIBAS      
By
/s/ Curt Price   
Name:  Curt Price
 
Title:    Managing Director
    By  /s/ Fik Durmus    Name:  Fik Durmus    Title:    Director 

 
 

WILLIAM STREET LLC      
By
/s/ Mark Walton   
Name:  Mark Walton
 
Title:    Authorized Signatory

 
 
 
 
 
 
 
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UBS LOAN FINANCE LLC      
By
/s/ Irja R. Otsa   
Name:  Irja R. Otsa
 
Title:    Associate Director
    By  /s/ Mary E. Evans    Name:  Mary E. Evans    Title:   
Associate Director 

 
 

WELLS FARGO BANK, N.A.      
By
/s/ Jordon Fragiacomo   
Name:  Jordon Fragiacomo
 
Title:    Director

 
 

THE BANK OF NEW YORK MELLON      
By
/s/ Donald G. Cassidy, Jr.   
Name:  Donald G. Cassidy, Jr.
 
Title:    Managing Director

 
 

HSBC BANK USA, NATIONAL ASSOCIATION      
By
/s/ Manuel Burgeño   
Name:  Manuel Burgeño
 
Title:    Vice President, Relationship Manager

 
 

MORGAN STANLEY BANK, N.A.      
By
/s/ Melissa James   
Name:  Melissa James 
 
Title:    Authorized Signatory

 
 

ROYAL BANK OF CANADA      
By
/s/ Dustin Craven   
Name:  Dustin Craven 
 
Title:    Authorized Signatory

 
 

 

THE NORTHERN TRUST COMPANY      
By
/s/ Peter Ja. Hallan   
Name:  Peter J. Hallan
 
Title:    Vice President

 
 
 
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