<PAGE>

                                                                     Exhibit 4.2

                                                                  Execution Copy

                          BLACK & DECKER CORPORATION

                                 $400,000,000

                         7.125% Senior Notes due 2011



                  EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
                  ------------------------------------------

                                                                    June 5, 2001

BANC OF AMERICA SECURITIES LLC
J.P. MORGAN SECURITIES INC.,
     as Representatives of the Initial
     Purchasers named in Schedule 1
     to the Purchase Agreement
270 Park Avenue
New York, New York 10017

Ladies and Gentlemen:

          The Black & Decker Corporation, a Maryland corporation (the
"Company"), proposes to issue and sell to Banc of America Securities LLC, J.P.
 -------
Morgan Securities Inc. (together, the "Representatives") and the other Initial
                                       ---------------
Purchasers named on Schedule 1 to the Purchase Agreement (the "Initial
                                                               -------
Purchasers"), upon the terms and subject to the conditions set forth in the
----------
Purchase Agreement dated May 29, 2001 (the "Purchase Agreement") among the
                                            ------------------
Company and the Initial Purchasers, $400,000,000 aggregate principal amount of
its 7.125% Senior Notes due 2011 (the "Securities"). Capitalized terms used but
                                       ----------
not defined herein shall have the meanings given to such terms in the Purchase
Agreement.

          As an inducement to the Initial Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the Initial
Purchasers thereunder, the Company agrees with the Initial Purchasers, for the
benefit of the holders (including the Initial Purchasers) of the Securities and
the Exchange Securities (as defined herein) (collectively, the "Holders"), as
                                                                -------
follows:

          1. Registered Exchange Offer. The Company shall (i) prepare and, not
             -------------------------
later than 90 days following the date of original issuance of the Securities
(the "Issue Date"), file with the Commission a registration statement (the
"Exchange Offer Registration Statement") on an appropriate form under the
Securities Act with respect to a proposed offer to the Holders of the Securities
(the "Registered Exchange Offer") to issue and deliver to such Holders, in
exchange for the Securities, a like aggregate principal amount of debt
securities of the Company (the "Exchange Securities") that are identical in all
material respects to the Securities, except for the transfer restrictions
relating to the Securities, (ii) use its reasonable best efforts to cause the
<PAGE>

Exchange Offer Registration Statement to become effective under the Securities
Act no later than 180 days after the Issue Date and the Registered Exchange
Offer to be consummated no later than 210 days after the Issue Date and (iii)
keep the Exchange Offer Registration Statement effective for not less than 20
business days (or longer, if required by applicable law) after the date on which
notice of the Registered Exchange Offer is mailed to the Holders (such period
being called the "Exchange Offer Registration Period"). The Exchange Securities
will be issued under the Indenture or an indenture (the "Exchange Securities
Indenture") between the Company and the Trustee or such other bank or trust
company that is reasonably satisfactory to the Initial Purchasers, as trustee
(the "Exchange Securities Trustee"), such indenture to be identical in all
material respects to the Indenture, except for the transfer restrictions
relating to the Securities (as described above).

          Upon the effectiveness of the Exchange Offer Registration Statement,
the Company shall promptly commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder electing to
exchange Securities for Exchange Securities (assuming that such Holder (a) is
not an affiliate of the Company or an Exchanging Dealer (as defined herein) not
complying with the requirements of the next sentence, (b) is not an Initial
Purchaser holding Securities that have, or that are reasonably likely to have,
the status of an unsold allotment in an initial distribution, (c) acquires the
Exchange Securities in the ordinary course of such Holder's business and (d) has
no arrangements or understandings with any person to participate in the
distribution of the Exchange Securities) and to trade such Exchange Securities
from and after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of
the several states of the United States. The Company, the Initial Purchasers and
each Holder that is a broker-dealer electing to exchange Securities acquired for
its own account as a result of market-making activities or other trading
activities for Exchange Securities (an "Exchanging Dealer") acknowledge that,
                                        -----------------
pursuant to current interpretations by the Commission's staff of Section 5 of
the Securities Act, each Exchanging Dealer is required to deliver a prospectus
containing substantially the information set forth (i) in Annex A hereto on the
cover of such prospectus, (ii) in Annex B hereto in the "Exchange Offer
Procedures" and the "Purpose of the Exchange Offer" sections of such prospectus
and (iii) in Annex C hereto in the "Plan of Distribution" section of such
prospectus, in connection with a sale of any such Exchange Securities received
by such Exchanging Dealer pursuant to the Registered Exchange Offer.

          In connection with the Registered Exchange Offer, the Company shall:

          (a)    mail to each Holder a copy of the prospectus forming part of
     the Exchange Offer Registration Statement, together with an appropriate
     letter of transmittal and related documents;

          (b)    keep the Registered Exchange Offer open for not less than 20
     business days (or longer, if required by applicable law) after the date on
     which notice of the Registered Exchange Offer is mailed to the Holders;

                                      -2-
<PAGE>

          (c)    utilize the services of a depositary for the Registered
     Exchange Offer with an address in the Borough of Manhattan, The City of New
     York;

          (d)    permit Holders to withdraw tendered Securities at any time
     prior to the close of business, New York City time, on the last business
     day on which the Registered Exchange Offer shall remain open; and

          (e)    otherwise comply in all respects with all laws that are
     applicable to the Registered Exchange Offer.

          As soon as practicable after the close of the Registered Exchange
Offer the Company shall:

          (a)    accept for exchange all Securities tendered and not validly
     withdrawn pursuant to the Registered Exchange Offer;

          (b)    deliver to the Trustee for cancellation all Securities so
     accepted for exchange; and

          (c)    cause the Trustee or the Exchange Securities Trustee, as the
     case may be, promptly to authenticate and deliver to each Holder, Exchange
     Securities equal in principal amount to the Securities of such Holder so
     accepted for exchange.

          The Company shall use its reasonable best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein in order to permit such prospectus to be used by
all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided that (i) in the case where
such prospectus and any amendment or supplement thereto must be delivered by an
Exchanging Dealer, such period shall be the lesser of 90 days and the date on
which all Exchanging Dealers have sold all Exchange Securities held by them and
(ii) the Company shall make such prospectus and any amendment or supplement
thereto available to any broker-dealer for use in connection with any resale of
any Exchange Securities for a period of not less than 90 days after the
consummation of the Registered Exchange Offer.

          The Indenture or the Exchange Securities Indenture, as the case may
be, shall provide that the Securities and the Exchange Securities shall vote and
consent together on all matters as one class and that none of the Securities or
the Exchange Securities will have the right to vote or consent as a separate
class on any matter.

          Interest on each Exchange Security issued pursuant to the Registered
Exchange Offer will accrue from the last interest payment date on which interest
was paid on the Securities surrendered in exchange therefor or, if no interest
has been paid on the Securities, from the Issue Date.

                                      -3-
<PAGE>

          Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understanding with any person to participate in the
distribution of the Securities or the Exchange Securities within the meaning of
the Securities Act and (iii) such Holder is not an affiliate of the Company or,
if it is such an affiliate, such Holder will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable.

          Notwithstanding any other provisions hereof, the Company will ensure
that (i) any Exchange Offer Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Exchange Offer Registration Statement and any
amendment thereto does not, when it becomes effective, contain an 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 and
(iii) any prospectus forming part of any Exchange Offer Registration Statement,
and any supplement to such prospectus, does not, as of the consummation of the
Registered Exchange Offer, include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

          2. Shelf Registration. If (i) because of any change in law or
             ------------------
applicable interpretations thereof by the Commission's staff the Company is not
permitted to effect the Registered Exchange Offer as contemplated by Section 1
hereof, or (ii) for any other reason the Registered Exchange Offer is not
consummated within 210 days after the Issue Date, or (iii) any Initial Purchaser
so requests with respect to Securities not eligible to be exchanged for Exchange
Securities in the Registered Exchange Offer and held by it following the
consummation of the Registered Exchange Offer, or (iv) any applicable law or
interpretations do not permit any Holder to participate in the Registered
Exchange Offer, then the following provisions shall apply:

          (a)    The Company shall use its reasonable best efforts to file with
the Commission on or before the later of 90 days after the Issue Date or 20 days
after so required or requested (the "Shelf Filing Date"), and thereafter shall
                                     -----------------
use its reasonable best efforts to cause to be declared effective, a shelf
registration statement on an appropriate form under the Securities Act relating
to the offer and sale of the Transfer Restricted Securities (as defined below)
by the Holders thereof from time to time in accordance with the methods of
distribution set forth in such registration statement (hereafter, a "Shelf
                                                                     -----
Registration Statement" and, together with any Exchange Offer Registration
----------------------
Statement, a "Registration Statement").
              ----------------------

          (b)    The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective in order to permit the
prospectus forming part thereof to be used by Holders of Transfer Restricted
Securities for a period ending on the earlier of (i) two years from the Issue
Date or such shorter period that will terminate when all the Transfer Restricted
Securities covered by the Shelf Registration Statement have been sold pursuant
thereto and (ii) the date on which the Securities become eligible for resale
without

                                      -4-
<PAGE>

volume restrictions pursuant to Rule 144 under the Securities Act (in any such
case, such period being called the "Shelf Registration Period"). The Company
                                    -------------------------
shall be deemed not to have used its reasonable best efforts to keep the Shelf
Registration Statement effective during the requisite period if the Company
voluntarily takes any action that would result in Holders of Transfer Restricted
Securities covered thereby not being able to offer and sell such Transfer
Restricted Securities during that period, unless such action is required by
applicable law.

          (c)    Notwithstanding any other provisions hereof, the Company will
ensure that (i) any Shelf Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Shelf Registration Statement and any amendment
thereto (in either case, other than with respect to information included therein
in reliance upon or in conformity with written information furnished to the
Company by or on behalf of any Holder specifically for use therein (the
"Holders' Information")) does not contain an 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 and (iii) any prospectus forming part
of any Shelf Registration Statement, and any supplement to such prospectus (in
either case, other than with respect to Holders' Information), does not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

          (d)    In the absence of the events described in clauses (i) through
(v) of the first paragraph of this Section 2, the Company shall not be permitted
to discharge its obligations hereunder by means of the filing of a Shelf
Registration Statement.

          3. Additional Interest. (a) The parties hereto agree that the Holders
             -------------------
of Transfer Restricted Securities will suffer damages if the Company fails to
fulfill its obligations under Section 1 or Section 2, as applicable, and that it
would not be feasible to ascertain the extent of such damages. Accordingly, if
(i) the Exchange Offer Registration Statement is not filed with the Commission
on or prior to 90 days after the Issue Date or the Shelf Registration Statement
is not filed with the Commission on or before the Shelf Filing Date, (ii) the
Exchange Offer Registration Statement is not declared effective within 180 days
after the Issue Date or the Shelf Registration Statement is not declared
effective within 90 days after the Shelf Filing Date, (iii) the Registered
Exchange Offer is not consummated on or prior to 210 days after the Issue Date,
or (iv) the Shelf Registration Statement is filed and declared effective within
90 days after the Shelf Filing Date but shall thereafter cease to be effective
(at any time that the Company is obligated to maintain the effectiveness
thereof) without being succeeded within 30 days by an additional Registration
Statement filed and declared effective (each such event referred to in clauses
(i) through (iv), a "Registration Default"), the Company will be obligated to
pay, as liquidated damages for such Registration Default, additional cash
interest to each Holder of Transfer Restricted Securities, during the period of
one or more such Registration Defaults, in an amount equal to 0.25% per annum of
the principal amount of Transfer Restricted Securities held by such Holder until
(i) the applicable Registration Statement is filed, (ii) the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
is declared effective, (iii) the Registered Exchange Offer is consummated, or
(iv) the Shelf Registration

                                      -5-
<PAGE>

Statement again becomes effective, as the case may be. Following the cure of all
Registration Defaults, the accrual of additional interest will cease. As used
herein, the term "Transfer Restricted Securities" means (i) each Security until
the date on which such Security has been exchanged for a freely transferable
Exchange Security in the Registered Exchange Offer, (ii) each Security until the
date on which it has been effectively registered under the Securities Act and
disposed of in accordance with the Shelf Registration Statement or (iii) each
Security until the date on which it is distributed to the public pursuant to
Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under
the Securities Act. Notwithstanding anything to the contrary in this Section
3(a), the Company shall not be required to pay additional interest to a Holder
of Transfer Restricted Securities if such Holder failed to comply with its
obligations to make the representations set forth in the second to last
paragraph of Section 1 or failed to provide the information required to be
provided by it, if any, pursuant to Section 4(n).

          (b)    The Company shall notify the Trustee and the Paying Agent under
the Indenture as promptly as practicable upon the happening of each and every
Registration Default. The Company shall pay the additional interest due on the
Transfer Restricted Securities by depositing with the Paying Agent (which may
not be the Company for these purposes), in trust, for the benefit of the Holders
thereof, prior to 10:00 a.m., New York City time, on the next interest payment
date specified by the Indenture and the Securities, sums sufficient to pay the
additional interest then due. The additional interest due shall be payable on
each interest payment date specified by the Indenture and the Securities to the
record holder entitled to receive the interest payment to be made on such date.
Each obligation to pay additional interest shall be deemed to accrue from and
including the date of the applicable Registration Default.

          (c)    The parties hereto agree that the additional interest provided
for in this Section 3 constitute a reasonable estimate of and are intended to
constitute the sole damages that will be suffered by Holders of Transfer
Restricted Securities by reason of the failure of (i) the Shelf Registration
Statement or the Exchange Offer Registration Statement to be filed, (ii) the
Shelf Registration Statement to remain effective or (iii) the Exchange Offer
Registration Statement to be declared effective and the Registered Exchange
Offer to be consummated, in each case to the extent required by this Agreement.

          4. Registration Procedures. In connection with any Registration
             -----------------------
Statement, the following provisions shall apply:

          (a)    The Company shall (i) furnish to each Initial Purchaser, prior
to the filing thereof with the Commission, a copy of the Registration Statement
and each amendment thereof and each supplement, if any, to the prospectus
included therein and shall use its reasonable best efforts to reflect in each
such document, when so filed with the Commission, such comments as any Initial
Purchaser may reasonably propose; (ii) include the information set forth in
Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer
Procedures" section and the "Purpose of the Exchange Offer" section, and in
Annex C hereto in the "Plan of Distribution" section of the prospectus forming a
part of the Exchange Offer Registration Statement, and include the information
set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to
the Registered Exchange Offer and (iii) if requested by any Initial Purchaser,
include

                                      -6-
<PAGE>

the information required by Items 507 or 508 of Regulation S-K, as applicable,
in the prospectus forming a part of the Exchange Offer Registration Statement.

          (b)    The Company shall advise each Initial Purchaser, each
Exchanging Dealer and the Holders (if applicable) and, if requested by any such
person, confirm such advice in writing (which advice pursuant to clauses (ii)-
(v) hereof shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made):

                 (i)    when any Registration Statement and any amendment
     thereto has been filed with the Commission and when such Registration
     Statement or any post-effective amendment thereto has become effective;

                 (ii)   of any request by the Commission for amendments or
     supplements to any Registration Statement or the prospectus included
     therein or for additional information;

                 (iii)  of the issuance by the Commission of any stop order
     suspending the effectiveness of any Registration Statement or the
     initiation of any proceedings for that purpose;

                 (iv)   of the receipt by the Company of any notification with
     respect to the suspension of the qualification of the Securities or the
     Exchange Securities for sale in any jurisdiction or the initiation or
     threatening of any proceeding for such purpose; and

                 (v)    of the happening of any event that requires the making
     of any changes in any Registration Statement or the prospectus included
     therein in order that the statements therein are not misleading and do not
     omit to state a material fact required to be stated therein or necessary to
     make the statements therein not misleading.

          (c)    The Company will make every reasonable effort to obtain the
withdrawal at the earliest possible time of any order suspending the
effectiveness of any Registration Statement.

          (d)    The Company will furnish to each Holder of Transfer Restricted
Securities included within the coverage of any Shelf Registration Statement,
without charge, at least one conformed copy of such Shelf Registration Statement
and any post-effective amendment thereto, including financial statements and
schedules and, if any such Holder so requests in writing, all exhibits thereto
(including those, if any, incorporated by reference).

          (e)    The Company will, during the Shelf Registration Period,
promptly deliver to each Holder of Transfer Restricted Securities included
within the coverage of any Shelf Registration Statement, without charge, as many
copies of the prospectus (including each preliminary prospectus) included in
such Shelf Registration Statement and any amendment or supplement thereto as
such Holder may reasonably request; and the Company consents to the use of such
prospectus or any amendment or supplement thereto by each of the selling Holders
of

                                      -7-
<PAGE>

Transfer Restricted Securities in connection with the offer and sale of the
Transfer Restricted Securities covered by such prospectus or any amendment or
supplement thereto.

          (f)    The Company will furnish to each Initial Purchaser and each
Exchanging Dealer, and to any other Holder who so requests, without charge, at
least one conformed copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
and, if any Initial Purchaser or Exchanging Dealer or any such Holder so
requests in writing, all exhibits thereto (including those, if any, incorporated
by reference).

          (g)    The Company will, during the Exchange Offer Registration Period
or the Shelf Registration Period, as applicable, promptly deliver to each
Initial Purchaser, each Exchanging Dealer and such other persons that are
required to deliver a prospectus following the Registered Exchange Offer,
without charge, as many copies of the final prospectus included in the Exchange
Offer Registration Statement or the Shelf Registration Statement and any
amendment or supplement thereto as such Initial Purchaser, Exchanging Dealer or
other persons may reasonably request; and the Company consents to the use of
such prospectus or any amendment or supplement thereto by any such Initial
Purchaser, Exchanging Dealer or other persons, as applicable, as aforesaid.

          (h)    Prior to the effective date of any Registration Statement, the
Company will use its reasonable best efforts to register or qualify, or
cooperate with the Holders of Securities or Exchange Securities included therein
and their respective counsel in connection with the registration or
qualification of, such Securities or Exchange Securities for offer and sale
under the securities or blue sky laws of such jurisdictions as any such Holder
reasonably requests in writing and do any and all other acts or things necessary
or advisable to enable the offer and sale in such jurisdictions of the
Securities or Exchange Securities covered by such Registration Statement;
provided that the Company will not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process or to taxation in
any such jurisdiction where it is not then so subject.

          (i)    The Company will cooperate with the Holders of Securities or
Exchange Securities to facilitate the timely preparation and delivery of
certificates representing Securities or Exchange Securities to be sold pursuant
to any Registration Statement free of any restrictive legends and in such
denominations and registered in such names as the Holders thereof may request in
writing prior to sales of Securities or Exchange Securities pursuant to such
Registration Statement.

          (j)    If any event contemplated by Section 4(b)(ii) through (v)
occurs during the period for which the Company is required to maintain an
effective Registration Statement, the Company will promptly prepare and file
with the Commission a post-effective amendment to the Registration Statement or
a supplement to the related prospectus or file any other required document so
that, as thereafter delivered to purchasers of the Securities or Exchange
Securities from a Holder, the prospectus will not include an untrue statement of
a material fact or omit to

                                      -8-
<PAGE>

state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

          (k)    Not later than the effective date of the applicable
Registration Statement, the Company will provide a CUSIP number for the
Securities and the Exchange Securities, as the case may be, and provide the
applicable trustee with printed certificates for the Securities or Exchange
Securities, as the case may be, in a form eligible for deposit with The
Depository Trust Company.

          (l)    The Company will comply with all applicable rules and
regulations of the Commission and will make generally available to its security
holders as soon as practicable after the effective date of the applicable
Registration Statement an earning statement satisfying the provisions of Section
11(a) of the Securities Act; provided that in no event shall such earning
statement be delivered later than 45 days after the end of a 12-month period (or
90 days, if such period is a fiscal year) beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
applicable Registration Statement, which statement shall cover such 12-month
period.

          (m)    The Company will cause the Indenture or the Exchange Securities
Indenture, as the case may be, to be qualified under the Trust Indenture Act as
required by applicable law in a timely manner.

          (n)    The Company may require each Holder of Transfer Restricted
Securities to be registered pursuant to any Shelf Registration Statement to
furnish to the Company such information concerning the Holder and the
distribution of such Transfer Restricted Securities as the Company may from time
to time reasonably require for inclusion in such Shelf Registration Statement,
and the Company may exclude from such registration the Transfer Restricted
Securities of any Holder that fails to furnish such information within a
reasonable time after receiving such request.

          (o)    In the case of a Shelf Registration Statement, each Holder of
Transfer Restricted Securities to be registered pursuant thereto agrees by
acquisition of such Transfer Restricted Securities that, upon receipt of any
notice from the Company pursuant to Section 4(b)(ii) through (v), such Holder
will discontinue disposition of such Transfer Restricted Securities until such
Holder's receipt of copies of the supplemental or amended prospectus
contemplated by Section 4(j) or until advised in writing (the "Advice") by the
                                                               ------
Company that the use of the applicable prospectus may be resumed. If the Company
shall give any notice under Section 4(b)(ii) through (v) during the period that
the Company is required to maintain an effective Registration Statement (the
"Effectiveness Period"), such Effectiveness Period shall be extended by the
 --------------------
number of days during such period from and including the date of the giving of
such notice to and including the date when each seller of Transfer Restricted
Securities covered by such Registration Statement shall have received (x) the
copies of the supplemental or amended prospectus contemplated by Section 4(j)
(if an amended or supplemental prospectus is required) or (y) the Advice (if no
amended or supplemental prospectus is required).

                                      -9-
<PAGE>

          (p)    In the case of a Shelf Registration Statement, the Company
shall enter into such customary agreements (including, if requested, an
underwriting agreement in customary form) and take all such other action, if
any, as Holders of a majority in aggregate principal amount of the Securities
being sold or the managing underwriters (if any) shall reasonably request in
order to facilitate any disposition of Securities pursuant to such Shelf
Registration Statement.

          (q)    In the case of a Shelf Registration Statement, the Company
shall (i) make reasonably available for inspection by a representative of, and
Special Counsel (as defined below) acting for, Holders of a majority in
aggregate principal amount of the Securities being sold and any underwriter
participating in any disposition of Securities or Exchange Securities pursuant
to such Shelf Registration Statement, all relevant financial and other records,
pertinent corporate documents and properties of the Company and its subsidiaries
and (ii) use its reasonable best efforts to have its officers, directors,
employees, accountants and counsel supply all relevant information reasonably
requested by such representative, Special Counsel or any such underwriter (an
"Inspector") in connection with such Shelf Registration Statement.
 ---------

          (r)    In the case of a Shelf Registration Statement, the Company
shall, if requested by Holders of a majority in aggregate principal amount of
the Securities being sold, their Special Counsel or the managing underwriters
(if any) in connection with such Shelf Registration Statement, use its
reasonable best efforts to cause (i) its counsel to deliver an opinion relating
to the Shelf Registration Statement and Securities in customary form, (ii) its
officers to execute and deliver all customary documents and certificates
requested by Holders of a majority in aggregate principal amount of the
Securities, being sold, their Special Counsel or the managing underwriters (if
any) and (iii) its independent public accountants to provide a comfort letter or
letters in customary form, subject to receipt of appropriate documentation as
contemplated, and only if permitted, by Statement of Auditing Standards No. 72.

          5.     Registration Expenses. The Company will bear all expenses
                 ---------------------
incurred in connection with the performance of its obligations under Sections 1,
2, 3 and 4 and the Company will reimburse the Initial Purchasers and the Holders
for the reasonable fees and disbursements of one firm of attorneys (in addition
to any local counsel) chosen by the Holders of a majority in aggregate principal
amount of the Securities and the Exchange Securities to be sold pursuant to each
Registration Statement (the "Special Counsel") acting for the Initial Purchasers
or Holders in connection therewith.


          6.     Indemnification. (a) In the event of a Shelf Registration
                 ---------------
Statement or in connection with any prospectus delivery pursuant to an Exchange
Offer Registration Statement by an Initial Purchaser or Exchanging Dealer, as
applicable, the Company shall indemnify and hold harmless each Holder
(including, without limitation, any such Initial Purchaser or Exchanging
Dealer), its affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls such Holder
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 6 and Section 7 as a Holder) from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, without limitation, any loss, claim, damage,
liability or

                                      -10-
<PAGE>

action relating to purchases and sales of Securities or Exchange Securities), to
which that Holder may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such Registration
Statement or any prospectus forming part thereof or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and shall reimburse each Holder promptly upon demand for
any legal or other expenses reasonably incurred by that Holder in connection
with investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, an untrue statement
or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with any Holders' Information; and
provided, further, that with respect to any such untrue statement in or omission
from any related preliminary prospectus, the indemnity agreement contained in
this Section 6(a) shall not inure to the benefit of any Holder from whom the
person asserting any such loss, claim, damage, liability or action received
Securities or Exchange Securities to the extent that such loss, claim, damage,
liability or action of or with respect to such Holder results from the fact that
both (A) a copy of the final prospectus was not sent or given to such person at
or prior to the written confirmation of the sale of such Securities or Exchange
Securities to such person and (B) the untrue statement in or omission from the
related preliminary prospectus was corrected in the final prospectus unless, in
either case, such failure to deliver the final prospectus was a result of non-
compliance by the Company with Section 4(d), 4(e), 4(f) or 4(g).

          (b)    In the event of a Shelf Registration Statement, each Holder
shall indemnify and hold harmless the Company and its affiliates, officers,
directors, employees, representatives and agents, and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act (collectively referred to for purposes of this Section 6(b) and Section 7 as
the Company), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company may become
subject, whether commenced or threatened, under the Securities Act, the Exchange
Act, any other federal or state statutory law or regulation, at common law or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any such Registration Statement or any prospectus
forming part thereof or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, but in
each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with any Holders' Information furnished to the Company by such
Holder, and shall reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
or preparing to defend against or appearing as a third party witness in

                                      -11-
<PAGE>

connection with any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that no such Holder shall be liable
                       --------  -------
for any indemnity claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale of Securities or Exchange Securities
pursuant to such Shelf Registration Statement.

          (c)  Promptly after receipt by an indemnified party under this Section
6 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 6(a) or 6(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
                                                                  --------
however, that the failure to notify the indemnifying party shall not relieve it
-------
from any liability which it may have under this Section 6 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and provided, further, that the failure to
                                         --------  -------
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 6.  If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party.  After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than the reasonable costs of investigation; provided, however,
                                                          --------  -------
that an indemnified party shall have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties.  It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties.  Each indemnified party, as a condition of the indemnity agreements
contained in Sections 6(a) and 6(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim.  No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and

                                      -12-
<PAGE>

hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.

          7.   Contribution.  If the indemnification provided for in Section 6
               ------------
is unavailable or insufficient to hold harmless an indemnified party under
Section 6(a) or 6(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company from the offering and sale
of the Securities on the one hand and a Holder with respect to the sale by such
Holder of Securities or Exchange Securities on the other hand or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and such Holder on the other hand with respect to the statements or
omissions that resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations.  The
relative benefits received by the Company on the one hand and a Holder on the
other hand with respect to such offering and such sale shall be deemed to be in
the same proportion as the total net proceeds from the offering of the
Securities (before deducting expenses) received by or on behalf of the Company
as set forth in the Purchase Agreement on the one hand bear to the total
proceeds received by such Holder with respect to its sale of Securities or
Exchange Securities on the other hand.  The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to the Company or information supplied by the Company on
the one hand or to any Holders' Information supplied by such Holder on the other
hand, the intent of the parties and their relative knowledge, access to
information, and opportunity to correct or prevent such untrue statement or
omission.  The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 7 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to herein.  The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 7 shall be deemed
to include, for purposes of this Section 7, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending or preparing to defend any such action or claim.  Notwithstanding
the provisions of this Section 7, an indemnifying party that is a Holder of
Securities or Exchange Securities shall not be required to contribute any amount
in excess of the amount by which the total price at which the Securities or
Exchange Securities sold by such indemnifying party to any purchaser exceeds the
amount of any damages which such indemnifying party has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission.  No person guilty of fraudulent

                                      -13-
<PAGE>

misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

          8.   Rules 144 and 144A.  The Company shall use its reasonable best
               ------------------
efforts to file the reports required to be filed by it under the Securities Act
and the Exchange Act in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the written request of any Holder
of Transfer Restricted Securities, make publicly available other information so
long as necessary to permit sales of such Holder's securities pursuant to Rules
144 and 144A.  The Company covenants that it will take such further action as
any Holder of Transfer Restricted Securities may reasonably request, all to the
extent required from time to time to enable such Holder to sell Transfer
Restricted Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including, without
limitation, the requirements of Rule 144A(d)(4) in the event that the Company
ceases to be a company subject to or in compliance with Section 13 or 15(d) of
the Exchange Act).  Upon the written request of any Holder of Transfer
Restricted Securities, the Company shall deliver to such Holder a written
statement as to whether it has complied with such requirements. Notwithstanding
the foregoing, nothing in this Section 8 shall be deemed to require the Company
to register any of its securities pursuant to the Exchange Act.

          9.   Underwritten Registrations.  If any of the Transfer Restricted
               --------------------------
Securities covered by any Shelf Registration Statement are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the Holders of
a majority in aggregate principal amount of such Transfer Restricted Securities
included in such offering, subject to the consent of the Company (which shall
not be unreasonably withheld or delayed), and such Holders shall be responsible
for all underwriting commissions and discounts in connection therewith.

          No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.

          10.  Miscellaneous.  (a)  Amendments and Waivers.  The provisions of
               -------------        ----------------------
this Agreement may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the
Company has obtained the written consent of Holders of a majority in aggregate
principal amount of the Securities or Exchange Securities, taken as a single
class.  Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders whose Securities or Exchange Securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect the rights of other Holders may be given by Holders of a majority in
aggregate principal amount of the Securities or Exchange Securities being sold
by such Holders pursuant to such Registration Statement.

                                      -14-
<PAGE>

          (b)  Notices.  All notices and other communications provided for or
               -------
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier or air courier guaranteeing next-day delivery:

          (1)  if to a Holder, at the most current address given by such Holder
     to the Company in accordance with the provisions of this Section 10(b),
     which address initially is, with respect to each Holder, the address of
     such Holder maintained by the Registrar under the Indenture, with a copy in
     like manner to Banc of America Securities LLC and J.P. Morgan Securities
     Inc.;

          (2)  if to an Initial Purchaser, initially at its address set forth in
     the Purchase Agreement; and

          (3)  if to the Company, initially at the address of the Company set
     forth in the Purchase Agreement.

          All such notices and communications shall be deemed to have been duly
given:  when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.

          (c)  Successors And Assigns.  This Agreement shall be binding upon the
               ----------------------
Company and its respective successors and assigns.

          (d)  Counterparts.  This Agreement may be executed in any number of
               ------------
counterparts (which may be delivered in original form or by telecopier) and by
the 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 one and the same agreement.

          (e)  Definition of Terms. For purposes of this Agreement, (a) the term
               -------------------
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act and (c) except where otherwise expressly provided, the
term "affiliate" has the meaning set forth in Rule 405 under the Securities Act.

          (f)  Headings.  The headings in this Agreement are for convenience of
               --------
reference only and shall not limit or otherwise affect the meaning hereof.

          (g)  Governing Law.  This Agreement shall be governed by and construed
               -------------
in accordance with the laws of the State of New York.

          (h)  Remedies.  In the event of a breach by the Company or by any
               --------
Holder of any of their respective obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to exercise
all rights granted by law, including recovery of damages (other than the
recovery of damages for a breach by the Company of its obligations under
Sections 1 or 2 hereof for which additional interest has been paid pursuant to
Section 3

                                      -15-
<PAGE>

hereof), will be entitled to specific performance of its rights under this
Agreement. The Company and each Holder agree that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agree that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.

          (i)  No Inconsistent Agreements.  The Company represents, warrants and
               --------------------------
agrees that (i) it has not entered into, shall not, on or after the date of this
Agreement, enter into any agreement that is inconsistent with the rights granted
to the Holders in this Agreement or otherwise conflicts with the provisions
hereof, (ii) it has not previously entered into any agreement which remains in
effect granting any registration rights with respect to any of its debt
securities to any person and (iii) without limiting the generality of the
foregoing, without the written consent of the Holders of a majority in aggregate
principal amount of the then outstanding Transfer Restricted Securities, it
shall not grant to any person the right to request the Company to register any
debt securities of the Company under the Securities Act unless the rights so
granted are not in conflict or inconsistent with the provisions of this
Agreement.

          (j)  No Piggyback on Registrations. Neither the Company nor any of its
               -----------------------------
security holders (other than the Holders of Transfer Restricted Securities in
such capacity) shall have the right to include any securities of the Company in
any Shelf Registration or Registered Exchange Offer other than Transfer
Restricted Securities.

          (k)  Severability. The remedies provided herein are cumulative and not
               ------------
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

                                      -16-
<PAGE>

          Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Initial Purchasers.

                               Very truly yours,

                               THE BLACK & DECKER CORPORATION

                               By /s/ MARK M. ROTHLEITNER
                                  -----------------------------------
                                  Name: Mark M. Rothleitner
                                  Title: Vice President - Investor
                                     Relations and Treasuer

                                      -17-
<PAGE>

Accepted:

BANC OF AMERICA SECURITIES LLC


By /s/ LYNN MCCONNELL
   ------------------------------------
   Authorized Signatory


Address for notices pursuant to Section 6(c):

Banc of America Securities LLC
100 North Tryon Street
Charlotte, North Carolina 28255
Attention: Legal Department


J.P. MORGAN SECURITIES INC.,
 for itself and for the several Initial
 Purchasers named on Schedule 1
 to the Purchase Agreement


By /s/ KATHERYN ROSEN
   ------------------------------------
   Name: Katheryn Rosen
   Title: Vice President

Address for notices pursuant to Section 6(c):

J.P. Morgan Securities Inc.
270 Park Avenue, 9th Floor
New York, New York 10017
Attention: Transaction Execution Group
Facsimile: (212) 834-6702

with a copy to:

J.P. Morgan Securities Inc.
1 Chase Manhattan Plaza, 26th floor
New York, New York 10081
Attention: Legal Department

                                      -18-
<PAGE>

                                                                         ANNEX A


          Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.  This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Securities received in exchange for
Securities where such Securities were acquired by such broker-dealer as a result
of market-making activities or other trading activities.  The Company has agreed
that, for a period of 180 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale.  See "Plan of Distribution".
<PAGE>

                                                                         ANNEX B


          Each broker-dealer that receives Exchange Securities for its own
account in exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities.  See "Plan of Distribution".
<PAGE>

                                                                         ANNEX C


                              PLAN OF DISTRIBUTION

          Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Securities
received in exchange for Securities where such Securities were acquired as a
result of market-making activities or other trading activities.  The Company has
agreed that, for a period of 180 days after the Expiration Date, it will make
this Prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale.

          The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers.  Exchange Securities received by broker-dealers
for their own account pursuant to the Registered Exchange Offer may be sold from
time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices.  Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer or the
purchasers of any such Exchange Securities.  Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Registered Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
Exchange Securities and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that, by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.

          For a period of 180 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal.  The Company has agreed to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one counsel
for the Holders of the Securities) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
<PAGE>

                                                                         ANNEX D


[_]    CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
       COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
       THERETO.

       Name:
       Address:



If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities.  If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.