-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LNd8R8lBXR0Fi4nfmc9+7+MqtFVvEm+GDe+tVQDCngmXXhRzucn1NQBERtRvWd68 //XtqiABy/fk6fc3Rc5Djg== 0000903423-00-000552.txt : 20001218 0000903423-00-000552.hdr.sgml : 20001218 ACCESSION NUMBER: 0000903423-00-000552 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20001215 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ECOLAB INC CENTRAL INDEX KEY: 0000031462 STANDARD INDUSTRIAL CLASSIFICATION: SOAP, DETERGENT, CLEANING PREPARATIONS, PERFUMES, COSMETICS [2840] IRS NUMBER: 410231510 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-08345 FILM NUMBER: 790408 BUSINESS ADDRESS: STREET 1: ECOLAB CTR STREET 2: 370 N WABASHA ST CITY: ST PAUL STATE: MN ZIP: 55102 BUSINESS PHONE: 6122932233 FORMER COMPANY: FORMER CONFORMED NAME: ECONOMICS LABORATORY INC DATE OF NAME CHANGE: 19861203 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HC INVESTMENTS INC CENTRAL INDEX KEY: 0000921748 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 100 N MARKET ST SUITE 780 CITY: WILMINGTON STATE: DE ZIP: 29890 BUSINESS PHONE: 2122252142 MAIL ADDRESS: STREET 1: ONE LIBERTY PLAZA STREET 2: ONE LIBERTY PLAZA CITY: NEW YORK STATE: NY ZIP: 10006 SC 13D/A 1 0001.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 5)* Ecolab Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $1.00 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 278865100 - -------------------------------------------------------------------------------- (CUSIP Number) William A. Groll, Esq. Cleary, Gottlieb, Steen & Hamilton One Liberty Plaza Suite 4300 New York, New York 10006-1470 212-225-2000 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 7, 2000 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box |_|. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. Seess. 240.13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D - ---------------------- CUSIP No. 278865100 - ---------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Henkel KgaA - -------------------------------------------------------------------------------- 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Germany - -------------------------------------------------------------------------------- NUMBER OF SHARES 7 SOLE VOTING POWER BENEFICIALLY OWNED BY 17,570,512 EACH REPORTING ------------------------------------------------------ BENEFICIALLY OWNED BY EACH REPORTING 8 SHARED VOTING POWER WITH 14,666,664 ------------------------------------------------------ 9 SOLE DISPOSITIVE POWER 17,570,512 ------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 14,666,664 ------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 32,237,176 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 25.4 % - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! SCHEDULE 13D - ---------------------- CUSIP No. 278865100 - ---------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON HC Investments, Inc. - -------------------------------------------------------------------------------- 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF, WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF SHARES 7 SOLE VOTING POWER BENEFICIALLY OWNED BY 0 EACH REPORTING ------------------------------------------------------ BENEFICIALLY OWNED BY EACH REPORTING 8 SHARED VOTING POWER WITH 14,666,664 ------------------------------------------------------ 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 14,666,664 ------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 14,666,664 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 11.5 % - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! 9 This Amendment No. 5 (this "Amendment") amends and supplements the Schedule 13D filed on December 20, 1989, as previously amended (the "Schedule 13D"), of Henkel KGaA ("KGaA") and HC Investments, Inc. ("HCI"), with respect to the Common Stock, par value $1.00 per share ("Common Stock"), of Ecolab Inc. ("Ecolab" or the "Company"). As required by Rule 101(a)(2)(ii) of Regulation S-T, this Amendment restates the text of the Schedule 13D in its entirety as amended hereby. Item 1. Security and Issuer. ------------------- The security to which this statement relates is the Common Stock of Ecolab. The principal executive offices of the Company are located at 370 Wabasha Street North, St. Paul, Minnesota 55102. Item 2. Identity and Background. ----------------------- The Schedule 13D is filed by KGaA and HCI. KGaA is a Kommanditgesellschaft auf Aktien organized under the laws of Germany, the principal executive offices of which are located at 67 Henkelstra(beta)e, 40191 Dusseldorf, Germany (KGaA is referred to herein, collectively with its affiliates, as "Henkel"). Henkel is a world leader in adhesives, surface technologies and oleochemicals. It is also a producer of detergents, household cleaners, cosmetics and toiletries. HCI is a holding company that holds certain U.S. investments of Henkel. Its principal executive offices are located at 1105 North Market Street, Suite 1300, Wilmington, Delaware 19899. All of the outstanding stock of HCI is owned by Henkel Corporation, a Delaware corporation, the principal executive offices of which are located at 2200 Renaissance Boulevard, Gulph Mills, Pennsylvania 19406. Henkel Corporation is engaged primarily in the manufacture and sale within the United States of chemical products. All of the outstanding common stock of Henkel Corporation is owned by Henkel of America, Inc., a Delaware corporation, the principal executive offices of which are located at 2200 Renaissance Boulevard, Gulph Mills, Pennsylvania 19406. Henkel of America, Inc. is a holding company. All of the outstanding stock of Henkel of America, Inc. is owned by KGaA. The names, addresses, occupations and citizenship of the executive officers, directors and controlling persons of HCI and KGaA are set forth on Annex I hereto. None of KGaA, HCI or, to the best knowledge of KGaA and HCI, any of the persons listed on Annex I hereto has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration. ------------------------------------------------- KGaA acquired 995,000 shares of Common Stock in open market purchases during October and November, 1999, for an aggregate amount equal to approximately $34,200,000. KGaA had previously acquired 150,700 shares of Common Stock in similar open market transactions in December 1997. The funds used for such purchases came from KGaA's general corporate resources. The remaining shares of Common Stock beneficially owned by Henkel were acquired by HCI and KGaA in connection with the consummation of certain transactions in 1989 and 1991, including the purchase and subsequent conversion of the Preferred Stock (as defined in Item 4 below), the initial establishment of the Joint Venture (as defined in Item 4 below) and the sale by Henkel of certain businesses to Ecolab, or as a result of subsequent stock splits. The Preferred Stock was initially acquired by HCI in 1989 for $110,000,000, the funds for which were obtained from indirect advances and capital contributions from KGaA out of its general corporate resources. Thereafter, in light of the greater value of the businesses that Henkel contributed to the Joint Venture and as compensation to Henkel for the sale of its non-European operations in the industrial and institutional cleaning and sanitizing business in 1991, KGaA received 3,803,333 shares of Common Stock and payments from Ecolab of approximately $138 million in cash and other consideration. Approximately $7 million of this cash amount was held by a German partnership that is part of the Joint Venture and was used to purchase 265,195 additional shares of Common Stock in open market transactions, from time to time between December 12, 1991 and September 24, 1993, that were distributed to KGaA in respect of its investment in the Joint Venture. In addition, upon consummation of the 1991 Transactions (as defined in Item 4 below), the Preferred Stock held by HCI was automatically converted, in accordance with its terms, into 3,666,666 shares of Common Stock. Item 4. Purpose of Transaction. ---------------------- Henkel and Ecolab have entered into a series of agreements and consummated a series of transactions through which they established and have conducted a long-term cooperative business relationship. Henkel's primary purpose for these agreements and transactions was for it to become and remain a long-term significant minority investor in Ecolab. As an initial step in establishing the relationship with Ecolab, on December 11, 1989, HCI acquired 1,100,000 shares of Series A Cumulative Convertible Preferred Stock ("Preferred Stock") of the Company. On July 11, 1991, Henkel and Ecolab completed the formation of a joint venture, called Henkel-Ecolab, combining the respective European industrial and institutional cleaning and sanitizing businesses of Henkel and Ecolab (the "Joint Venture"). The Joint Venture is owned substantially equally by Henkel and Ecolab, with Henkel having a simple majority interest. In addition, in connection with the establishment of the Joint Venture, Henkel sold to Ecolab its industrial and institutional cleaning and sanitizing business in approximately 20 other countries in other areas of the world (collectively, with the formation of the Joint Venture, the "1991 Transactions"). In connection with the consummation of the 1991 Transactions, KGaA and Ecolab executed an Amended and Restated Umbrella Agreement (the "Umbrella Agreement"), an Amended and Restated Joint Venture Agreement (the "Joint Venture Agreement"), an Amended and Restated ROW Purchase Agreement and an Amended and Restated Stockholder's Agreement (the "Stockholder's Agreement"), each dated as of June 26, 1991. HCI also executed the Stockholder's Agreement and agreed to be bound by its terms. On July 18, 2000, KGaA and Ecolab executed Amendment No. 1 to Amended and Restated Stockholder's Agreement ("Amendment No. 1"), dated as of June 30, 2000. The Stockholder's Agreement, as amended by Amendment No.1, is referred to herein collectively as the "Existing Stockholder's Agreement." The Existing Stockholder's Agreement and the Joint Venture Agreement establish certain rights, obligations and limitations for Henkel with respect to its investment in Ecolab, as described herein. The Umbrella Agreement, the Joint Venture Agreement and the Stockholder's Agreement were filed as Exhibit 13, Exhibit 14 and Exhibit 15 to the Schedule 13D, respectively, and each is incorporated herein by this reference in its entirety. Amendment No. 1 is filed with this Amendment as Exhibit 17 to the Schedule 13D and is incorporated herein by this reference in its entirety. The descriptions contained in the Schedule 13D of various of the terms of the Joint Venture Agreement, the Stockholder's Agreement and Amendment No.1 are qualified in their entirety by reference to the respective agreement. On December 7, 2000, KGaA and Ecolab executed a Master Agreement (the "Master Agreement") providing for a series of transactions which, if consummated, will result in the sale by Henkel of its interests in the Joint Venture to Ecolab (the "Proposed Sale") in exchange for cash in Euro or additional shares of Common Stock, at the election of Henkel, in an amount to be determined based on the earnings of the Joint Venture in fiscal years 2000 and 2001 pursuant to a formula in the Master Agreement. Based on current estimates, the purchase price will range between 520 million and 560 million Euro. If Henkel elects to take Common Stock, the number of shares to be issued will be calculated using a per share value of $41.0625, subject to a maximum of 13,203,672 and a minimum of 9,270,664 shares being issued. The Proposed Sale is subject to a number of conditions, including regulatory filings and approvals, set out in the Master Agreement. It is anticipated that the Proposed Sale would be consummated in January 2002. The Master Agreement provides that, if the Proposed Sale is consummated, the Existing Stockholder's Agreement will be further amended and restated in the form attached as an exhibit to the Master Agreement (the "Proposed Amended Stockholder's Agreement"), and the Umbrella Agreement and the Joint Venture Agreement will be terminated. If the Proposed Sale is consummated, the business relationship between Henkel and Ecolab will be changed, and Henkel's primary relationship with Ecolab will be that of a significant minority stockholder. In that event, the existing rights, obligations and limitations of Henkel, as restated and described herein, would be amended in certain respects, also as described herein. The Master Agreement and the form of Proposed Amended Stockholder's Agreement are filed with this Amendment as Exhibit 18 and Exhibit 19 to the Schedule 13D, respectively, and each is incorporated herein by this reference in its entirety. The descriptions contained in the Schedule 13D of various terms of the Master Agreement and the Proposed Amended Stockholder's Agreement are qualified in their entirety by reference to the respective agreement. Under the terms of the Existing Stockholder's Agreement, KGaA agreed that for the period ending the earlier of (x) two years after the later of (A) the termination of the Joint Venture Agreement and (B) the date on which KGaA owns less than 1% of the Company's outstanding voting securities and (y) June 26, 2009 (such period being the "Agreement Period"), subject to extension as described below, without the prior written consent of the Company, KGaA and its affiliates will not, subject to certain limitations: (i) acquire or propose to acquire any equity securities of the Company ("Equity Securities") or any rights to acquire any Equity Securities; (ii) make or participate in any solicitation of proxies or written consents, become a participant in any election contest with respect to the Company or seek to advise, encourage or influence any person or entity with respect to the voting of any voting securities of the Company; (iii) initiate, propose or otherwise solicit, or participate in the solicitation of, stockholders for the approval of any stockholder proposal as contemplated by Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); (iv) form, join or in any way participate in a "group" or act in concert with any other entity with respect to any Equity Securities; (v) participate in or encourage the formation of any group which owns or seeks or offers to acquire beneficial ownership of securities of the Company or rights to acquire such securities or which seeks or offers to affect control of the Company or for the purpose of circumventing any provision of the Existing Stockholder's Agreement; (vi) solicit, seek or offer to effect, negotiate with or provide any information to any party or make any statement or proposal to the Company, or otherwise make any public announcement with respect to (A) any form of business combination or transaction involving the Company, (B) any form of restructuring, recapitalization or similar transaction with respect to the Company, (C) any acquisition or disposition of assets material to the Company, (D) any request to amend, waive or terminate certain provisions of the Existing Stockholder's Agreement or (E) any proposal or other statement inconsistent with the terms of such provisions; (vii) otherwise act, alone or in concert with others, to seek or offer to control or influence, in any manner, the management, the Board of Directors of the Company (the "Board") or policies of the Company; or (viii) knowingly instigate or encourage any person to take any of the actions described above (the foregoing being the "Standstill Provisions"). Notwithstanding the foregoing, KGaA and HCI may acquire additional voting securities of the Company either (x) from the Company, if the Company has issued additional securities in an issuance in which KGaA does not participate, subject to certain limitations or (y) so long as such acquisition would not cause KGaA and its affiliates collectively to have more than 30% (the "Permitted Percentage") of the voting power of the Company's outstanding voting. If the Proposed Sale is consummated, the Proposed Amended Stockholder's Agreement will increase the Permitted Percentage to 35%. If the Proposed Sale is consummated, the Standstill Provisions of the Existing Stockholder's Agreement will generally stay in place, but the Proposed Amended Stockholder's Agreement will contain an exception permitting Henkel, after December 31, 2010 or, in certain circumstances, in the event that Ecolab issues shares in such number as to dilute Henkel's percentage ownership by more than 50%, to make a written proposal (which may be modified or amended to respond to the Board or to competition from third parties) to the Board to acquire all, but not less than all, of the outstanding Equity Securities of the Company as long as the proposal includes a provision that the management headquarters of the cleaning and sanitizing business would be maintained in St. Paul, Minnesota for a least ten years. If any such proposal did not result in a transaction, Henkel would be permitted under the Proposed Amended Stockholder's Agreement to make additional comparable proposals at intervals set forth in the Proposed Amended Stockholder's Agreement (18 months after the first proposal made after December 31, 2010, 36 months after any such second proposal and 5 years after any other subsequent proposal). Any proposal made by Henkel under the exception described in this paragraph will be disclosed in a future amendment to the Schedule 13D to the extent KGaA is then advised by counsel that such disclosure is required. In addition, under the terms of the Existing Stockholder's Agreement, KGaA and HCI agreed that each will not sell, transfer, pledge, encumber or otherwise dispose of any Equity Securities acquired by them in connection with the 1991 Transactions together with any Equity Securities acquired during the Agreement Period (collectively, "Shares") except (i) to the Company or in a transaction approved by the Board; (ii) to one or more affiliates of KGaA that agree to be bound by the Existing Stockholder's Agreement; (iii) in accordance with the requirements of Rule 144 under the Securities Act of 1933, as amended (the "Securities Act") (provided KGaA uses reasonable efforts to see that no purchaser owns more than 2% of the voting power of the Company's securities after any such sale, transfer or disposition or such purchaser agrees to be bound by the terms of the Existing Stockholder's Agreement and the Board approves such transaction); (iv) in a valid private placement if KGaA reasonably believes after due inquiry that the purchaser would not own more than 2% of the voting power of the Company's securities or such purchaser agrees to be bound by the terms of the Existing Stockholder's Agreement and the Board approves such transaction; (v) pursuant to an underwritten public offering under the Securities Act in which the managing underwriter agrees to effect the sale in a manner which will effect a broad distribution thereof (provided KGaA uses reasonable efforts to see that no purchaser owns more than 2% of the voting power of the Company's securities); (vi) pursuant to a third party tender offer not opposed by the Board; and (vii) to a bona fide financial institution in connection with the grant of a pledge or other encumbrance securing a bona fide loan under certain circumstances. Pursuant to the Existing Stockholder's Agreement, the Company has been granted certain rights of first refusal with respect to permitted transfers to be made by KGaA or HCI. In addition, in the event that, as a result of repurchases by the Company of its securities, KGaA and its affiliates have, at any time, voting power of the Company's outstanding voting securities in excess of the Permitted Percentage, the Company can cause KGaA to sell such number of shares as is necessary so that its ownership is at or below the Permitted Percentage. Under the Existing Stockholder's Agreement, the parties agreed that during the seventeenth year of the Agreement Period, the Company and KGaA would negotiate in good faith with respect to the extension of the Agreement Period. If the parties reach agreement, the Agreement Period shall be extended for the period agreed upon not to be less than two years. If no agreement to extend the Agreement Period is reached, the Existing Stockholder's Agreement provides that the Company shall have a put of its interest in the Joint Venture, and KGaA shall have a call on the Company's interest in the Joint Venture, as provided in the Joint Venture Agreement. The consideration payable by KGaA upon the exercise of any such put or call shall be paid first in Shares. If the Shares are purchased by the Company pursuant to any such put or call, the Agreement Period terminates on the second anniversary of the closing date of such purchase, which closing, in accordance with the Joint Venture Agreement, shall take place on December 31, 2008 unless otherwise agreed. If the Proposed Sale is consummated, the Proposed Amended Stockholder's Agreement will eliminate these provisions and extend the Agreement Period automatically until such time as Henkel and its affiliates own less than 2% of the Company's outstanding voting securities. KGaA has agreed in the Existing Stockholder's Agreement that, for a period of ten years from July 11, 1991 (subject to extension as provided in the Existing Stockholder's Agreement as described below), KGaA shall be present, in person or by proxy, at all meetings of stockholders of the Company so that all voting securities beneficially owned by KGaA shall be counted for purposes of determining the presence of a quorum at such meetings. In addition, KGaA agreed that it and its affiliates would vote their Shares, at KGaA's option, either in accordance with the recommendation or direction of the Board or pro rata in the same manner and proportion that votes of the stockholders of the Company (excluding KGaA and its affiliates and all executive officers or directors of Ecolab holding voting securities and the members of their immediate families) have been cast. KGaA agreed that, notwithstanding the foregoing, it and its affiliates shall cast their votes in accordance with the recommendation of the Board (i) in all elections of directors of the Company in which KGaA's designees are included in the slate of nominees in accordance with the terms of the Existing Stockholder's Agreement (as described below) and (ii) on all matters (A) submitted to the vote of stockholders of the Company which have been proposed by any stockholder or stockholders, (B) affecting or regarding the compensation or benefits of directors, officers or employees of the Company and (C) relating to matters concerning the continued independent, publicly traded nature of the Company or any potential change in control of the Company (other than the matters set forth in clauses (v), (w) and (x) below) or concerning federal or state statutes relating to such matters. KGaA and its affiliates are free to cast their votes as KGaA determines in its sole discretion with respect to any of the following transactions initiated by the Board which are presented at a meeting of stockholders of the Company for their approval (any such transaction being referred to herein as a "Strategic Transaction"): (v) any disposition of the Company (by way of merger, sale of assets or otherwise) or a substantial part of its assets; (w) any recapitalization of the Company (other than a recapitalization for the purpose of forming a holding company or to effect a change in the Company's state of incorporation); (x) any liquidation of, or consolidation involving, the Company; (y) any increase in the Company's authorized shares or other amendment to the Restated Certificate of Incorporation or By-Laws of the Company; or (z) any transaction not otherwise covered by the provisions described in this paragraph that could reasonably be expected to have a material effect on KGaA's investment in the Shares. The Existing Stockholder's Agreement provides that until the end of the Agreement Period the period of the voting agreement described in the preceding paragraph shall be extended automatically for a period of one year on the last day of each year of the voting agreement unless KGaA elects, upon notice provided in accordance with the Existing Stockholder's Agreement, not to extend the voting agreement. If KGaA elects not to extend the voting agreement provisions as described above, the Company shall have a call on the Shares at the then average market value and on Henkel's ownership interest in the Joint Venture, as provided in the Joint Venture Agreement. If the Proposed Sale is consummated, the Proposed Amended Stockholder's Agreement will amend these provisions to eliminate any difference between the period during which these voting agreements apply and the Agreement Period and will extend these voting agreements as long as the agreement is in effect. In the Existing Stockholder's Agreement, the Company agreed to take or cause to be taken all necessary actions to appoint or elect to the Board and, at each annual meeting of the stockholders of the Company thereafter until the end of the Agreement Period, to nominate or cause to be nominated for election to the Board such number of individuals designated by KGaA for election as members of the Board as is necessary to provide KGaA with representation on the Board proportionate with its stock ownership. In accordance with these provisions, Albrecht Woeste, Roland Schulz and Hugo Uyterhoeven currently serve as members of the Board. This provision will remain generally the same if the Proposed Amended Stockholder's Agreement becomes effective, except that, if Henkel acquires additional shares of Common Stock up to the Permitted Percentage, the number of individuals that Henkel would be entitled to designate for nomination could increase correspondingly. In the Existing Stockholder's Agreement, the Company agreed to grant KGaA certain "piggyback" registration rights and certain demand registration rights with respect to permitted sales of at least 500,000 shares of Common Stock. If the Proposed Amended Stockholder's Agreement becomes effective, these provisions will generally remain unchanged except that the minimum size for a demand registration would be 1% of the Company's then outstanding Common Stock. The restrictions on, among other things, sales, purchases and voting described above terminate under the Existing Stockholder's Agreement upon a Change in Control of the Company (as hereinafter defined), the determination of the Board to effect, or to solicit proposals to effect, or to cause the Company to enter into a definitive agreement providing for the Sale of the Company (as hereinafter defined) or a breach by the Company of any material obligation under the Existing Stockholder's Agreement. For purposes of the Existing Stockholder's Agreement and the Joint Venture Agreement, a "Change in Control of the Company" shall be deemed to have occurred if (i) at any time, any person (other than KGaA or any of its affiliates or the Company, an employee stock ownership plan or other pension, stock bonus or stock incentive plan of the Company or any of its subsidiaries) is or becomes the beneficial owner of, or makes a tender or exchange offer pursuant to Section 14(d) of the Exchange Act with respect to which the Company does not recommend rejection (it being understood that such restrictions shall not be terminated until the Company has publicly taken a position with respect to such offer or has stated that it will remain neutral or is unable to take a position with respect thereto) in accordance with Rule 14e-2 of the Exchange Act, any successor regulation or otherwise for, an amount of voting securities of the Company greater than one-half of the excess of (A) the number of outstanding voting securities of the Company over (B) the number of voting securities of the Company which result from multiplying the number of outstanding voting securities of the Company by the percentage of voting securities of the Company that KGaA and its affiliates are permitted to own (if the Proposed Amended Stockholder's Agreement becomes effective, the amount of voting securities that will trigger this will be changed to greater than 32.5%), (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board, together with any new director whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof or (iii) at any time any person other than KGaA or any of its affiliates by way of ownership of voting securities, representation on the Board or both, is in fact controlling the operations of the Company. For purposes of the Existing Stockholder's Agreement, a "Sale of the Company" shall mean a merger (other than a merger for the purpose of forming a holding company or to effect a change in the Company's state of incorporation), combination or, in any one or more related transactions, sale of all or substantially all of the Company's assets as a result of which the directors of the Company immediately prior to such transaction do not represent a majority of the board of directors, or the stockholders of the Company immediately prior to such transaction do not continue to own equity securities representing more than 50% of the vote and of the equity, of the ultimate controlling corporation following such merger or combination or succeeding to ownership of all or substantially all of the Company's assets. The material changes to the terms of the Existing Stockholder's Agreement that will be implemented by the Proposed Amended Stockholder's Agreement are as set forth in this Amendment, including Item 6 below. The remaining provisions of the Existing Stockholder's Agreement described in this Amendment will remain in full force and effect. Henkel intends to continue to review its investment in Common Stock from time to time and, depending upon certain factors, including without limitation the financial performance of Ecolab, the availability and price of shares of Common Stock on the open market, Henkel's overall relationship with Ecolab and the status of the Joint Venture, and other general market and investment conditions, Henkel may determine to acquire through open market purchases or otherwise additional shares of Common Stock, or, based upon such factors, to sell shares of Common Stock, from time to time, in each case to the extent permitted under the Existing Stockholder's Agreement and applicable law. Except as set forth herein, Henkel has no current plans or proposals that relate to or would result in any of the actions or events enumerated in clauses (a) through (j) of Item 4 of Schedule 13D, as promulgated by the Securities and Exchange Commission. Item 5. Interest in Securities of the Issuer. ------------------------------------ (a)-(b) At the date hereof, in the aggregate, the 32,237,176 shares of Common Stock owned by HCI and KGaA represent approximately 25.4% of the 127,014,480 shares of Common Stock represented by Ecolab to be outstanding in the Master Agreement. Of that total, HCI beneficially owns 14,666,664 shares of Common Stock (approximately 11.5% of such total). HCI and, by virtue of its indirect control of HCI, KGaA share the power to vote and the power to dispose of these shares of Common Stock. KGaA directly and beneficially owns the remaining 17,570,512 shares of Common Stock (approximately 13.8% of such total). KGaA has the sole power to vote and the sole power to dispose of those shares of Common Stock. At the date hereof, to the best knowledge of HCI and KGaA, Albrecht Woeste (the Chairman of the Supervisory Board of KGaA and a member of the Board) is the beneficial owner (with sole voting and dispositive power) of 43,404 shares of Common Stock (including 24,800 shares that could be purchased under stock options granted by Ecolab and 6,669 shares represented by stock units granted by Ecolab under its Non-Employee Director Deferred Compensation Plan). At the date hereof, to the best knowledge of HCI and KGaA, Roland Schulz (a member of the Board of Management of KGaA and a member of the Board) is the beneficial owner (with sole voting and dispositive power) of 41,541 shares of Common Stock (including 21,600 shares that could be purchased under stock options granted by Ecolab and 5,924 shares represented by stock units granted by Ecolab under its Non-Employee Director Deferred Compensation Plan). HCI and KGaA disclaim beneficial ownership of any of the shares beneficially owned by Albrecht Woeste and Roland Schulz. At the date hereof, except as stated herein, neither HCI nor KGaA nor, to the best of their knowledge, Henkel of America, Inc., Henkel Corporation or any of the persons listed on Annex I hereto beneficially owns any shares of Common Stock (other than shares of Common Stock beneficially owned by HCI or KGaA of which one or more of such other persons may be deemed to have beneficial ownership pursuant to Rule 13d-3 of the Exchange Act). (c) No transactions in shares of Common Stock were effected during the past 60 days by HCI or KGaA or, to the best of their knowledge, by Henkel of America, Inc., Henkel Corporation or any of the persons listed on Annex I hereto. (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships -------------------------------------------------------- with Respect to Securities of the Issuer. ---------------------------------------- The Joint Venture Agreement contains provisions affording KGaA, upon the occurrence of certain events, a call on the Company's ownership interest in the Joint Venture. The price to be paid to the Company upon the exercise of any such call varies depending upon the event that triggers the right. Upon the refusal of KGaA to extend the Agreement Period of the Stockholder's Agreement, KGaA would pay a portion of the "Acquisition Value" of the Joint Venture for the Company's interest in the Joint Venture. The Joint Venture Agreement provides that such Acquisition Value shall be the fair market value of the Joint Venture as a going concern being sold as an entirety as determined by three qualified appraisers. If the Company does not agree to extend the Agreement Period in spite of KGaA's willingness to do so, KGaA would pay a portion of the "Trading Value" of the Joint Venture for the Company's interest. The Joint Venture Agreement provides that such Trading Value shall be the market value of the Joint Venture determined as if it were publicly traded without taking into account any acquisition value or "premium" as if sold as an entirety. KGaA also has a call on the Company's interest in the Joint Venture for a portion of the Trading Value of the Joint Venture upon the issuance of securities by the Company in an amount sufficient to dilute KGaA's ownership interest in the Company below certain levels, the occurrence of a Change in Control of the Company, a breach by the Company of the Joint Venture Agreement or the bankruptcy of the Company. If a third party acquires more than 50% of the Company's outstanding voting securities, KGaA has a call on the Company's ownership interest in the Joint Venture for a portion of the Trading Value of the Joint Venture, with the Shares used as payment being valued at the highest price per share paid by such third party. As described below, following any such acquisition, KGaA also has certain rights to "economic parity." The consideration payable by KGaA upon the exercise of any call described above must be paid first in Shares, valued (except as described in the previous paragraph) at their then average market value, and then in cash. In each case, if the value of the Shares exceeds the amount payable, the Company shall have a call on the remaining Shares owned by KGaA at their then average market value. The Joint Venture Agreement also provides the Company with certain similar rights to put its interest in the Joint Venture to KGaA in return for Shares in the case of a refusal of KGaA or the Company to extend the Agreement Period, a change in control of Henkel or a breach by KGaA of the Joint Venture Agreement. The Company shall also have a call on KGaA's ownership interest in the Joint Venture if KGaA elects not to extend the voting agreement provisions of the Stockholder's Agreement or in the event of a bankruptcy of KGaA. As described above, the Existing Stockholder's Agreement provides certain similar put and call rights pursuant to which KGaA may cause the Company to purchase, or the Company may cause KGaA to sell, the Shares held by KGaA in certain events, including some of the events triggering puts or calls in the Joint Venture Agreement. If the Proposed Sale is consummated and the Proposed Amended Stockholder's Agreement becomes effective, the put and call rights relating to the Joint Venture would be terminated. If a third party acquires beneficial ownership of more than 50% of the outstanding voting securities of the Company, KGaA has the right to give notice to the Company of its election to receive "economic parity" for its Shares. On July 18, 2000, KGaA and Ecolab executed Amendment No. 1 to Amended and Restated Stockholder's Agreement ("Amendment No. 1"), dated as of June 30, 2000, pursuant to which this, but only this, provision of the Stockholder's Agreement was amended. Amendment No. 1 is filed with this Amendment as Exhibit 17 to the Schedule 13D and is incorporated herein by this reference in its entirety. The descriptions contained in this Amendment of the terms of Amendment No. 1 are qualified in their entirety by reference to Amendment No. 1. As so amended, if KGaA gives notice within a specified period of its election to receive "economic parity," the Company must pay KGaA the aggregate spread between the market value of the Shares it continues to hold, and between the sale price of Shares it sold after the third party's acquisition of 50%, and the highest price per share paid by the third party in obtaining its 50%. The Company may elect to pay this spread in cash or in non-redeemable securities with a value equal to the spread, in which case the Company must, if requested by KGaA within a specified period, either find a purchaser of these securities or register them for resale in a manner that ensures that KGaA receives cash in the amount of the spread. This provision would remain generally unchanged if the Proposed Amended Stockholder's Agreement becomes effective. In addition, as described above, the Existing Stockholder's Agreement contains certain standstill provisions with respect to KGaA's actions with respect to the Shares. The Proposed Amended Stockholder's Agreement contains a provision entitling KGaA, in the event Henkel's ownership interest is diluted by more than 25% over any 24-month period by issuances of Voting Securities, to require the Company to (at the Company's election) buy or arrange the sale of all of the Shares. Under this provision, within 24 months of KGaA's exercise of this right, Henkel would be guaranteed to receive an aggregate amount equal to the average closing price of the Common Stock at the time of the dilution, plus interest until paid in full, with the Company required to pay any shortfall to Henkel, and Henkel paying any excess amount to the Company. In addition, the Proposed Amended Stockholder's Agreement contains a provision entitling the Company to buy back the Shares from Henkel in the event KGaA agrees to be acquired by or becomes controlled by a competitor of the Company with at least $200 million in annual sales in the cleaning and sanitizing field. Except as set forth herein or in the agreements described or incorporated by reference herein, neither HCI nor KGaA nor, to the best of their knowledge, Henkel of America, Inc., Henkel Corporation or any of the persons listed on Annex I hereto has any contract, arrangement, understanding or relationship with respect to any securities of the Company. Item 7. Material to be Filed as Exhibits. -------------------------------- Exhibit 1 Stock Purchase Agreement by and among HC Investments, Inc., Henkel KGaA and Ecolab Inc. dated as of December 11, 1989 Exhibit 2 Amendment No. 1 to Stock Purchase Agreement by and among HC Investments, Inc., Henkel KGaA and Ecolab Inc. dated as of December 11, 1989 Exhibit 3 Confidentiality Agreement between Henkel KGaA and Ecolab Inc. dated November 13, 1989 Exhibit 4 Press Release issued by Ecolab Inc. and Henkel KGaA on December 11, 1989 Exhibit 5 Amendment No. 2 to Stock Purchase Agreement by and among HC Investments, Inc., Henkel KGaA and Ecolab Inc. dated as of September 11, 1990 Exhibit 6 Umbrella Agreement by and between Henkel KGaA and Ecolab Inc. dated as of September 11, 1990 Exhibit 7 Joint Venture Agreement by and between Henkel KGaA and Ecolab Inc. dated as of September 11, 1990 Exhibit 8 Stockholder's Agreement between Henkel KGaA and Ecolab Inc. dated as of September 11, 1990 Exhibit 9 Amendment No. 3 to Stock Purchase Agreement by and among HC Investments, Inc., Henkel KGaA and Ecolab Inc. dated as of March 8, 1991 Exhibit 10 First Amendment to the Umbrella Agreement by and between Henkel KGaA and Ecolab Inc. dated as of March 8, 1991 Exhibit 11 First Amendment to the Joint Venture Agreement by and between Henkel KGaA and Ecolab Inc. dated as of March 8, 1991 Exhibit 12 First Amendment to the Stockholder's Agreement between Henkel KGaA and Ecolab Inc. dated as of March 8, 1991 Exhibit 13 Amended and Restated Umbrella Agreement by and between Henkel KGaA and Ecolab Inc. dated as of June 26, 1991 Exhibit 14 Amended and Restated Joint Venture Agreement by and between Henkel KGaA and Ecolab Inc. dated as of June 26, 1991 Exhibit 15 Amended and Restated Stockholder's Agreement between Henkel KGaA and Ecolab Inc.dated as of June 26, 1991 Exhibit 16 Press Release issued by Ecolab Inc. and Henkel KGaA on July 11, 1991 Exhibit 17 Amendment No. 1 to Amended and Restated Stockholder's Agreement between Henkel KGaA and Ecolab Inc. dated as of June 30, 2000 Exhibit 18 Master Agreement, dated as of December 7, 2000, between Ecolab Inc. and Henkel KGaA Exhibit 19 Form of Second Amended and Restated Stockholder's Agreement Signature After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct. Dated: December 14, 2000 Henkel KGaA By: /s/ Carl Braun -------------------------------- Dr. Carl Braun Vice President By: /s/ Thomas-Gerd Kuhn -------------------------------- Thomas-Gerd Kuhn Senior Corporate Counsel HC Investments, Inc. By: /s/ James E. Ripka -------------------------------- James E. Ripka President Exhibit Index ------------- Exhibit 1 Stock Purchase Agreement by and among HC Investments, Inc., * Henkel KgaA and Ecolab Inc. dated as of December 11, 1989 Exhibit 2 Amendment No. 1 to Stock Purchase Agreement by and among HC * Investments, Inc., Henkel KGaA and Ecolab Inc. dated as of December 11, 1989 Exhibit 3 Confidentiality Agreement between Henkel KGaA and Ecolab Inc. * dated November 13, 1989 Exhibit 4 Press Release issued by Ecolab Inc. and Henkel KGaA on December * 11, 1989 Exhibit 5 Amendment No. 2 to Stock Purchase Agreement by and among HC ** Investments, Inc., Henkel KGaA and Ecolab Inc. dated as of September 11, 1990 Exhibit 6 Umbrella Agreement by and between Henkel KGaA and Ecolab Inc. ** dated as of September 11, 1990 Exhibit 7 Joint Venture Agreement by and between Henkel KGaA and ** Ecolab Inc. dated as of September 11, 1990 Exhibit 8 Stockholder's Agreement between Henkel KGaA and Ecolab Inc. ** dated as of September 11, 1990 Exhibit 9 Amendment No. 3 to Stock Purchase Agreement by and among HC *** Investments, Inc., Henkel KGaA and Ecolab Inc. dated as of March 8, 1991 Exhibit 10 First Amendment to the Umbrella Agreement by and between *** Henkel KGaA and Ecolab Inc. dated as of March 8, 1991 Exhibit 11 First Amendment to the Joint Venture Agreement by and between *** Henkel KGaA and Ecolab Inc. dated as of March 8, 1991 Exhibit 12 First Amendment to the Stockholder's Agreement between Henkel *** KGaA and Ecolab Inc. dated as of March 8, 1991 Exhibit 13 Amended and Restated Umbrella Agreement by and between Henkel **** KGaA and Ecolab Inc. dated as of June 26, 1991 Exhibit 14 Amended and Restated Joint Venture Agreement by and between **** Henkel KGaA and Ecolab Inc. dated as of June 26, 1991 Exhibit 15 Amended and Restated Stockholder's Agreement between Henkel **** KGaA and Ecolab Inc. dated as of June 26, 1991 Exhibit 16 Press Release issued by Ecolab Inc. and Henkel KGaA on **** July 11, 1991 Exhibit 17 Amendment No. 1 to Amended and Restated Stockholder's Agreement 34 between Henkel KGaA and Ecolab Inc. dated as of June 30, 2000 Exhibit 18 Master Agreement, dated as of December 7, 2000, between Ecolab 37 Inc. and Henkel KGaA Exhibit 19 Form of Second Amended and Restated Stockholder's Agreement 90 * Previously filed as an Exhibit to the Schedule 13D on December 20, 1989. ** Previously filed as an Exhibit to Amendment No. 2 to the Schedule 13D on September 17, 1990. *** Previously filed as an Exhibit to Amendment No. 3 to the Schedule 13D on March 15, 1991. **** Previously filed as an Exhibit to Amendment No. 4 to the Schedule 13D on July 16, 1991. ANNEX I ------- Officers and Directors of HC Investments, Inc. ---------------------------------------------- The following table sets forth the name, business address, position with HCI and present principal occupation of each director and executive officer of HCI. Each individual listed below is a citizen of the United States. Position with HCI and Present Name and Address Principal Occupation or Employment - ---------------- ---------------------------------- Mr. James E. Ripka Vice President and Treasurer of Henkel Henkel Corporation Corporation; Director, Chairman of the Board The Triad, Suite 200 of Directors and President of HCI 2200 Renaissance Boulevard Gulph Mills, PA 19406 Mr. Kenneth R. Pina Senior Vice President, Chief Legal Officer Henkel Corporation and Secretary of Henkel Corporation; The Triad, Suite 200 Secretary of HCI 2200 Renaissance Boulevard Gulph Mills, PA 19406 Mr. Timothy V. Eisenhut Vice President, Tax of Henkel Corporation; Henkel Corporation Director and Vice President, Finance The Triad, Suite 200 and Treasurer of HCI 2200 Renaissance Boulevard Gulph Mills, PA 19406 Mr. Brian Friend Director of Tax of Henkel Corporation; Henkel Corporation Director and Vice President, Tax of HCI The Triad, Suite 200 2200 Renaissance Boulevard Gulph Mills, PA 19406 Mr. Lloyd Overton Martin Assistant Vice President, Corporate, Wilmington Trust Company Financial Services Department, Wilmington 1105 North Market Street Trust Company; Director and Assistant Suite 1300 Treasurer of HCI Wilmington, DE 19899 Mr. Gregory Gaglione Associate General Counsel and Assistant Henkel Corporation Secretary of Henkel Corporation; The Triad, Suite 200 Assistant Secretary of HCI 2200 Renaissance Boulevard Gulph Mills, PA 19406 Officers and Directors of Henkel KGaA ------------------------------------- The following table sets forth the name, business address (except as noted), position with KGaA and present principal occupation of each director, executive officer and controlling person of KGaA. Each individual listed below is a citizen of Germany, except Mr. de Keersmaecker, who is a citizen of Belgium, and Dr. Morwind, who is a citizen of the Republic of Austria. Name and Address Present Principal Occupation or Employment - ---------------- ------------------------------------------ Supervisory Board: - ------------------ Mr. Albrecht Woeste Owner, President and Managing Henkelstrasse 67 Director of R. Woeste GmbH & Co. KG 40191 Dusseldorf and Chairman of the Supervisory Board Germany and Chairman of the Shareholders' Committee of KGaA Dr. Ulrich Cartellieri Member of the Board of Management of Deutsche Bank AG Deutsche Bank AG D-60262 Frankfurt Germany Mr. Hans Dietrichs Member of the Works Council of KGaA Ziegeleistrasse 56 39307 Genthin Germany Mrs. Ursula Fairchild Photographer 6126 Avenida Cresta La Jolla, California 92037 United States (residence) Mr. Benedikt-Joachim Freiherr von Herman Forester Obere Dorfstrasse 1 88489 Wain Germany Mr. Bernd Hinz Member of the Works Council of KGaA Rheinstrasse 48 51371 Leverkusen Germany Name and Address Present Principal Occupation or Employment - ---------------- ------------------------------------------ Supervisory Board: (continued) - ------------------ Prof. Dr. Dr. h.c. Heribert Meffert Professor at the University of Potstiege 56 Munster and Director of the 48161 Munster Institute for Marketing Germany Mr. Hans Mehnert Member of the Works Council of KGaA Im Strasschen 51 40789 Monheim Germany Prof. Dr. Dr. Heinz Riesenhuber Member of Parliament Bundesforschungsminister a.D. Deutscher Bundestag Platz der Republik 1 11011 Berlin Germany Mr. Heinrich Thorbecke Owner and Managing Director of Bank Wolfgangweg 17 Thorbecke in Geneva, Switzerland CH-9014 St. Gallen Switzerland Mr. Michael Vassilidias Chemical Engineer at IG Bergbau Konigsworther Platz 6 30167 Hannover Germany Mr. Bernhard Walter Chairman of the Board of Managing 60301 Frankfurt Directors of Dresdner Bank AG Germany Mr. Jurgen Walter Officer of IG Bergbau - Chemie, c/o IG Bergbau - Chemie, Energie Energie (Industrial union of Konigsworther Platz 6 employees in the chemical industry) 30167 Hannover Germany Mrs. Brigitte Weber Member of the Works Council of KGaA Pestalozzistrasse 12 40764 Langenfeld Germany Name and Address Present Principal Occupation or Employment - ---------------- ------------------------------------------ Supervisory Board: (continued) - ------------------ Dr. Anneliese Wilsch-Irrgang Chairman of the Management Personnel Flotowstrasse 2a Representatives of KGaA 40593 Dusseldorf Germany Mr. Winfried Zander Chairman of the Works Council of KGaA Henkelstrasse 67 and Vice Chairman of the Supervisory 40191 Dusseldorf Board Germany Board of Management: - ------------------- Dr. Ulrich Lehner President and Chief Executive Henkelstrasse 67 Officer and Chairman of the Board 40191 Dusseldorf of Management of KGaA Germany Mr. Guido de Keersmaecker Executive Vice President-Adhesives Henkelstrasse 67 of KGaA 40191 Dusseldorf Germany Dr. Jochen Krautter Executive Vice President Finance and Henkelstrasse 67 Logistics of KGaA 40191 Dusseldorf Germany Dr. Klaus Morwind Executive Vice President-Detergents/ Henkelstrasse 67 Cleaning Products of KGaA 40191 Dusseldorf Germany Dr. Roland Schulz Executive Vice President-Human Henkelstrasse 67 Resources, Hygiene and Surface 40191 Dusseldorf Technologies of KGaA Germany Name and Address Present Principal Occupation or Employment - ---------------- ------------------------------------------ Board of Management: (continued) - -------------------- Dr. Uwe Specht Executive Vice President- Cosmetics/ Henkelstrasse 67 Toiletries of KGaA 40191 Dusseldorf Germany Shareholders' Committee: - ------------------------ Mr. Albrecht Woeste Owner, President and Managing Henkelstrasse 67 Director of R. Woeste GmbH & Co. KG 40191 Dusseldorf and Chairman of the Supervisory Germany Board and Chairman of the Shareholders' Committee of KGaA Dr. Simone Bagel Biologist Beethovenstrasse 62 53115 Bonn Germany Mr. Stefan Hamelmann Owner of Franz Hamelmann Hebbelstrasse 13 Baugesellschaft MbH 40237 Dusseldorf Germany Dr. h.c. Ulrich Hartmann President and Chief Executive Officer Bennigsenplatz 1 of E.ON AG 40474 Dusseldorf Germany Chrisoph Henkel Independent Entrepreneur and Business Henkelstrasse 67 Executive 40191 Dusseldorf Germany Dr. Jurgen Manchot Vice Chairman of the Shareholders' Henkelstrasse 67 Committee of KGaA and Chemist 40191 Dusseldorf Germany Mr. Thomas Manchot Entrepreneur Kaiser-Wilhelm-Ring 43a 40545 Dusseldorf Germany Name and Address Present Principal Occupation orEmployment - ---------------- ----------------------------------------- Shareholders' Committee: (continued) - ------------------------ Dr. Christa Plichta Physician Chemin Colladon 22 CH-1209 Geneve Switzerland Dr. Wolfgang Roller Chairman of the Supervisory Board of c/o Dresdner Bank AG Dresdner Bank AG 60301 Frankfurt Am Main Germany Mr. Burkhard Schmidt Managing Director of Jahr Holding Stubbenhuk 7 GmbH & Co KG 20459 Hamburg Germany Dr. Hans-Dietrich Winkhaus Former President and Chief Executive Henkelstrasse 67 Officer of KGaA; Chairman of the 40191 Dusseldorf Supervisory Board of Deutsche Telekom Germany AG EX-17 2 0002.txt Exhibit 17 AMENDMENT NO. 1 TO AMENDED AND RESTATED STOCKHOLDER'S AGREEMENT AMENDMENT NO. 1 TO AMENDED AND RESTATED STOCKHOLDER'S AGREEMENT (this "Amendment"), dated as of June 30, 2000, between ECOLAB INC., a Delaware corporation (the "Company"), and HENKEL KOMMANDITGESELLSCHAFT AUF AKTIEN, organized under the laws of the Federal Republic of Germany (the "Stockholder"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Company and the Stockholder are party to that certain Amended and Restated Stockholder's Agreement, dated as of June 26, 1991, between the Company and the Stockholder (the "Stockholder's Agreement") (capitalized terms used herein and not defined herein shall have the respective meanings set forth in the Stockholder's Agreement); and WHEREAS, the Company and the Stockholder have agreed to amend certain provisions of the Stockholder's Agreement as set forth below. NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows: 1. Economic Parity. Section 6 of the Stockholder's Agreement is hereby amended and restated in its entirety as follows: Section 6. Economic Parity. If at any time during the Agreement Period any person or group acquires beneficial ownership of Voting Securities, whether pursuant to a tender or exchange offer made pursuant to Section 14(d) of the 1934 Act as to which the Company has recommended that its stockholders reject such offer or otherwise, such that such person or group beneficially owns more than 50% of the outstanding Voting Securities (a "Change in Control Transaction"), in addition to any other rights the Stockholder may have, the Stockholder shall have the right for a period of six months after such person or group acquires such beneficial ownership to deliver a notice relating to all, but not less than all, of the Shares then held by the Stockholder at that time (the "Notice Shares") to the Company. Within 45 days following receipt of such notice, the Company shall pay to the Stockholder an amount of consideration, in either, at the Company's sole discretion, (i) cash or (ii) in the form of equity securities of the Company or any other consideration that would not result in any Shares held by the Stockholder being classified as a "redeemable equity security" pursuant to the Commission's Accounting Series Release No. 268, having a value equal to the product of the number of Notice Shares times the positive difference between (i) the consideration per Share equal to the highest price per share paid by such person or group in acquiring Voting Securities and (ii) in the case of Notice Shares held by the Stockholder on the date of such payment, the Market Price on the day before the payment and, in the case of Notice Shares sold by the Stockholder after the Change in Control Transaction and prior to such payment, the amount realized by the Stockholder pursuant to such dispositions, net of transaction costs (the aggregate amount being the "Aggregate Spread"). The Company shall indemnify and hold the Stockholder harmless against any adverse tax consequences suffered by the Stockholder as a result of the Company's payment to the Stockholder pursuant to the previous sentence as compared to the tax consequences of purchasing the Notice Shares at the consideration per share equal to the highest price per share paid by such person or group in acquiring Voting Securities. Such indemnification shall take the form of either, at the Company's sole discretion, (i) cash or (ii) equity securities of the Company or any other consideration that would not result in any Shares held by the Stockholder being classified as a "redeemable equity security" pursuant to the Commission's Accounting Series Release No. 268. In the event that the Company determines to make a payment to the Stockholder pursuant to this Section 6 in a form of consideration other than cash, the Company shall provide an opinion to the Stockholder from an internationally recognized investment banking firm, mutually agreeable to both parties hereto, as to the value of such consideration. In addition, unless the Company arranges for the purchase of such securities from the Stockholder at a price at least equal to the Aggregate Spread, upon request of the Stockholder within 45 days of such payment, the Company shall, within 90 days of such request, register the securities delivered as payment (the "Registered Securities") for resale by the Stockholder to the extent possible in an underwritten offering with an internationally recognized underwriter mutually agreeable to both parties. If the aggregate net proceeds to the Stockholder in such registered offering will be less than the Aggregate Spread, the Company shall deliver to the Stockholder either, at the Company's sole discretion, (i) cash equal to the amount by which the Aggregate Spread exceeds such net proceeds, or (ii) additional Registered Securities for resale in such registered offering in the amount required so that the aggregate net proceeds of such offering to the Stockholder equals the Aggregate Spread. In the event that the Company determines to make a payment to the Stockholder pursuant to this Section 6 in the form of cash, then the Company shall make such payment within such 45 day period to the extent funds are legally available therefor (and, if not then legally available therefor, as soon thereafter as such funds are legally available therefor). 2. References. Upon the effectiveness of this Amendment, all references in the Stockholder's Agreement and in all other agreements, documents, certificates, schedules and instruments executed pursuant thereto to the Stockholder's Agreement including, without limitation, references to "this Agreement," "hereunder," "hereof," "herein" and words of like import contained in the Stockholder's Agreement shall, except where the context otherwise requires, mean and be a reference to the Stockholder's Agreement, as amended hereby. 3. Ratification. Except as expressly amended hereby, all of the provisions of the Stockholder's Agreement, as amended hereby, shall remain unaltered and in full force and effect, and, as amended hereby, the Stockholder's Agreement is in all respects agreed to and ratified and confirmed by the parties hereto. 4. Severability. If any provision of this Amendment shall be declared by any court of competent jurisdiction to be illegal, void or unenforceable, all other provisions of this Amendment shall not be affected and shall remain in full force and effect. 5. Counterparts. This Amendment may be executed in one or more counterparts, all of which shall be considered one and the same agreement and each of which shall be deemed an original. 6. Headings. The headings of the paragraphs of this Amendment are inserted for convenience only and shall not constitute a part hereof or affect in any way the meaning or interpretation of this Amendment. 7. Governing Law. This Amendment shall be construed under and governed by the laws of the State of Delaware without regard to the conflicts-of-laws provisions thereof. * * * * * * * * IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the date first above written. ECOLAB INC. By: /s/ Allan L. Schuman ---------------------------------------- Name: Allan L. Schuman Title: Chairman of the Board, President and Chief Executive Officer HENKEL KOMMANDITGESELLSCHAFT AUF AKTIEN By: /s/ Lothar Steinebach ---------------------------------------- Name: Dr. Lothar Steinebach Title: Senior Vice President By: /s/ Thomas-Gerd Kuhn ---------------------------------------- Name: Thomas-Gerd Kuhn Title: Senior Corporate Counsel EX-18 3 0003.txt EXECUTION COPY MASTER AGREEMENT DATED DECEMBER 7, 2000 BETWEEN ECOLAB INC. AND HENKEL KGaA TABLE OF CONTENTS 1. DEFINITIONS................................................................1 1.1. DEFINED TERMS.......................................................1 1.2. OTHER DEFINED TERMS.................................................7 2. EXECUTION AND TERMINATION OF AGREEMENTS....................................8 2.1. AMENDED AND RESTATED STOCKHOLDER'S AGREEMENT........................8 2.2. INTELLECTUAL PROPERTY AGREEMENTS....................................8 2.3. SERVICES AGREEMENTS.................................................8 2.4. UMBRELLA AGREEMENT..................................................8 2.5. JOINT VENTURE AGREEMENT.............................................8 2.6. TOLL MANUFACTURING AGREEMENTS.......................................8 2.7. ENVIRONMENTAL AGREEMENT.............................................8 2.8. LOCAL JURISDICTION AGREEMENTS.......................................8 2.9. LEASE AGREEMENT.....................................................8 3. TRANSFER OF JV INTERESTS...................................................8 3.1. TRANSFER............................................................9 3.2. STRUCTURING PLAN....................................................9 3.3. LOCAL JURISDICTION AGREEMENTS.......................................9 4. CONSIDERATION............................................................9 4.1. PURCHASE PRICE......................................................9 4.2. ELECTION AS TO FORM OF CONSIDERATION...............................11 4.3. CONSIDERATION PAID WITH ECOLAB SHARES..............................12 4.4. COLLAR ON NUMBER OF ECOLAB SHARES..................................12 5. CLOSING...................................................................12 5.1. CLOSING DATE AND CONDITIONS........................................12 5.2. DELIVERIES BY HENKEL...............................................12 5.3. DELIVERIES BY ECOLAB...............................................14 5.4. FURTHER ASSURANCES.................................................15 6. REPRESENTATIONS AND WARRANTIES OF HENKEL..................................15 6.1. CORPORATE ORGANIZATION, ETC........................................15 6.2. AUTHORIZATION, ETC.................................................15 6.3. NO VIOLATION; NO CONSENT...........................................16 6.4. CAPITALIZATION; OWNERSHIP..........................................16 6.5. COMPLIANCE WITH LAWS, ETC..........................................17 6.6. FINANCIAL STATEMENTS...............................................17 6.7. UNDISCLOSED LIABILITIES............................................17 6.8. NO MATERIAL ADVERSE CHANGE, ETC....................................17 6.9. JV ENTITIES' ASSETS................................................17 6.10. TRANSACTIONS WITH AFFILIATES.......................................18 6.11. INVESTMENT REPRESENTATION..........................................18 6.12. DISCLOSURE.........................................................18 7. REPRESENTATIONS AND WARRANTIES OF ECOLAB..................................18 7.1. CORPORATE ORGANIZATION, ETC........................................18 7.2. AUTHORIZATION, ETC.................................................19 7.3. NO VIOLATION; NO CONSENT...........................................20 7.4. COMPLIANCE WITH LAWS, ETC..........................................20 7.5. CAPITAL STOCK......................................................20 7.6. SEC FILINGS........................................................21 7.7. INVESTMENT REPRESENTATION..........................................22 7.8. DISCLOSURE.........................................................22 8. COVENANTS OF ECOLAB AND HENKEL............................................22 8.1. NONASSIGNABILITY; CONSENTS AND APPROVALS...........................22 8.2. CONFIDENTIALITY AND ANNOUNCEMENTS..................................25 8.3. STRUCTURING PLAN...................................................26 8.4. COOPERATION........................................................26 8.5. TAX MATTERS........................................................26 8.6. REGULATORY MATTERS.................................................28 8.7. EMPLOYEE MATTERS...................................................30 8.8. TREASURY MATTERS...................................................30 9. COVENANTS OF HENKEL.......................................................32 9.1. PRESERVATION OF AND ACCESS TO BOOKS AND RECORDS...................... 9.2. DISCLOSURE SCHEDULE................................................33 9.3. AMENDMENTS TO DISCLOSURE SCHEDULE..................................34 9.4. RESIGNATION OF OFFICERS AND DIRECTORS..............................34 9.5. NONCOMPETITION.....................................................34 9.6. GENERAL............................................................34 10. COVENANTS OF ECOLAB.......................................................35 10.1. BOOKS AND RECORDS..................................................35 11. CONDITIONS TO HENKEL'S OBLIGATION.........................................35 11.1. REPRESENTATIONS AND WARRANTIES TRUE................................36 11.2. PERFORMANCE........................................................36 11.3. DELIVERIES.........................................................36 11.4. CONSENTS OBTAINED..................................................36 11.5. NO GOVERNMENT PROCEEDING OR LITIGATION.............................36 11.6. NO INJUNCTION......................................................36 11.7. MATERIAL ADVERSE EFFECT............................................37 12. CONDITIONS TO ECOLAB'S OBLIGATION.........................................37 12.1. REPRESENTATIONS AND WARRANTIES TRUE................................37 12.2. PERFORMANCE........................................................37 12.3. DELIVERIES.........................................................37 12.4. CONSENTS OBTAINED..................................................38 12.5. NO GOVERNMENT PROCEEDING OR LITIGATION.............................38 12.6. NO INJUNCTION......................................................38 12.7. UPDATED DISCLOSURE SCHEDULE........................................38 12.8. NO MATERIAL ADVERSE EFFECT.........................................38 13. TERMINATION...............................................................38 13.1. TERMINATION PRIOR TO CLOSING.......................................38 13.2. EFFECT OF TERMINATION..............................................39 14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION...............40 14.1. SURVIVAL...........................................................40 14.2. HENKEL INDEMNIFICATION OF ECOLAB...................................40 14.3. LIMITATION ON HENKEL'S INDEMNIFICATION OBLIGATION..................40 14.4. ECOLAB INDEMNIFICATION OF HENKEL...................................40 14.5. METHOD OF ASSERTING CLAIMS, ETC....................................41 14.6. REMEDIES CUMULATIVE................................................42 15. SETTLEMENT OF DISPUTES....................................................42 15.1. INFORMAL DISPUTE RESOLUTION........................................42 15.2. ARBITRATION........................................................43 15.3. COMMENCEMENT OF ARBITRATION AND SELECTION OF ARBITRATORS...........43 15.4. CONFLICTS WITH I.C.C. RULES; SEAT AND LANGUAGE OF ARBITRATION......43 15.5. BASIS FOR ARBITRATION DECISIONS AND GOVERNING LAW..................43 15.6. FINALITY OF ARBITRAL AWARD; ARBITRATION EXPENSES...................43 15.7. CONSOLIDATION OF CLAIMS............................................44 15.8. JUDGMENT ON THE ARBITRAL AWARD.....................................44 16. MISCELLANEOUS.............................................................44 16.1. AMENDMENTS.........................................................44 16.2. WAIVERS............................................................44 16.3. ASSIGNABILITY......................................................44 16.4. SEVERABILITY.......................................................45 16.5. NOTICES............................................................45 16.6. GOVERNING LAW......................................................46 16.7. ASSURANCE OF FURTHER ACTION........................................46 16.8. COSTS..............................................................46 16.9. ENTIRE AGREEMENT...................................................46 16.10. HEADINGS; REFERENCES TO SECTIONS, EXHIBITS AND SCHEDULES...........47 16.11. COUNTERPARTS.......................................................47 16.12. THIRD PARTIES......................................................48 MASTER AGREEMENT THIS MASTER AGREEMENT dated as of this 7th day of December, 2000 (this "Agreement"), is between Henkel Kommanditgesellschaft auf Aktien, organized under the laws of the Federal Republic of Germany ("Henkel"), and Ecolab Inc., a corporation incorporated under the laws of the State of Delaware ("Ecolab"). WHEREAS, Henkel, directly or indirectly, owns the joint venture interests (the "JV Interests") in the joint venture entities (such entities, together with all Subsidiaries of such entities, the "JV Entities") formed pursuant to that certain Amended and Restated Umbrella Agreement, dated as of June 26, 1991 (the "Umbrella Agreement"), between Henkel and Ecolab, or thereafter, all as listed on Schedule 1.1, in the amounts set forth opposite each JV Entity on Schedule 1.1; WHEREAS, Ecolab desires to acquire from Henkel, and Henkel desires to transfer to Ecolab or its Affiliates, all of the JV Interests, upon the terms and conditions hereinafter set forth; WHEREAS, Henkel and Ecolab have agreed that the transactions contemplated by this Agreement should be carried out in accordance with the terms of a Structuring Plan, substantially in the form set forth as Exhibit A attached hereto; WHEREAS, Henkel and Ecolab have agreed to enter into the Amended and Restated Stockholder's Agreement (as hereinafter defined), in the form set forth as Exhibit B attached hereto; and WHEREAS, Henkel and Ecolab have agreed to terminate their joint venture relationship, which was established pursuant to the Umbrella Agreement and the Joint Venture Agreement (as hereinafter defined). NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: ARTICLE I 1. DEFINITIONS 1.1. Defined Terms. The following terms shall have the meanings set forth below: "Affiliate" shall mean a Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with the Person specified. For purposes of this definition, the term "control" (including, without limitation, the terms "controlling," "controlled by" and "under common control with") means the possession, direct or indirect, of the power to (a) vote more than 50% of the voting securities of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise. For purposes of this Agreement and the other Transaction Documents, the parties acknowledge that Ecolab and Henkel will not be considered Affiliates of each other. "Amended and Restated Stockholder's Agreement" shall mean that certain Second Amended and Restated Stockholder's Agreement, dated as of the Closing Date, between Ecolab and Henkel, in the form of Exhibit B attached hereto. "Antitrust Laws" shall mean all Applicable Laws that are designed or intended to prohibit, restrict or regulate actions including, without limitation, joint ventures, mergers and acquisitions, that may create, strengthen or abuse a dominant position, substantially lessen competition, monopolize or attempt to monopolize, or otherwise have the purpose or effect of restraining, lessening or affecting competition or trade. "Applicable Laws" shall mean all federal, state, local and foreign statutes, laws, ordinances, regulations, rules, permits, orders, judgments, decrees, injunctions, and writs of any Governmental Entity having jurisdiction over the parties, their Affiliates or the JV Entities, as may be in effect on or prior to the Closing. "Audited Financial Statements" shall mean the audited combined balance sheets of the JV Entities at November 30, 1999, and the related combined statements of income and comprehensive income, of equity and of cash flows for the fiscal year ended on that date, together with the reports thereon of PricewaterhouseCoopers Gesellschaft mit beschrankter Haftung Wirtschaftsprufungsgesellschaft and KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellchaft. "Cleaning and Sanitizing Field" shall mean the business of the JV Entities, as conducted from time to time from inception through the Closing Date including, without limitation, the manufacture, marketing and sale of textile, kitchen, surface, food processing, agricultural, brewery, beverage, dairy, Hospital Hygiene, quick-serve restaurant, effluent, process, waste and other water treatment or recycling, pest elimination, on-premise laundry, housekeeping, professional hygiene, pharmaceutical, cosmetic and critical environment cleaning, conditioning, rinsing agent, detergent, disinfecting and sanitizing products, systems (including, without limitation, dispensing systems and related applications parts and equipment), services and related equipment, all destined for the institutional and industrial markets exclusively. "Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder. "Communications Plan" shall mean that certain communications plan attached as Exhibit C hereto regarding external and internal communications including, without limitation, press release, as well as any employee Q&A and workers council notification matters. "Damages" shall mean all Liabilities, damages, penalties, deficiencies, expenses, professionals' fees, losses or judgments suffered by any party, in each case after the application of any amounts recovered under insurance contracts or similar arrangements, other than amounts recovered under such contracts or arrangements the premiums of which are adjusted by an amount equal to any proceeds paid, and from third parties by the damaged party. "Ecolab Common Stock" shall mean common stock of Ecolab, par value $1.00 per share, together with the associated rights to purchase shares of Series A Junior Participating Preferred Stock of Ecolab issued pursuant to the Rights Agreement dated February 24, 1996 between Ecolab and First Chicago Trust Company of New York, as rights agent. "Ecolab Entities" shall mean certain Persons that may be designated by Ecolab from time to time prior to the Closing Date. "Encumbrance" shall mean any lien, mortgage, charge, security interest, pledge, voting agreement, claim, option or encumbrance or any kind, character or description whatsoever, whether or not recorded. "Environmental Agreement" shall mean that certain Environmental Agreement dated as of the Closing Date, between Ecolab and Henkel, in the form of Exhibit D attached hereto. "GAAP" shall mean United States Generally Accepted Accounting Principles as in effect on the date or for the period with respect to which such principles are applied. "Governmental Entity" shall mean any supranational, federal, state, local or foreign court, administrative agency or governmental or regulatory authority or body. "Henkel Entities" shall mean those Subsidiaries and Affiliates of Henkel that have a relationship with the JV Entities as set forth in the Structuring Plan and on Schedule 1.2. "Hospital Hygiene" means the sale and distribution of antiseptic, disinfectant, cleaning and personal care products, services and equipment to hospitals, nursing homes, sanatoria and private medial and dental practices. "Imposed" means for purposes of Section 8.5, Taxes which have not been paid, accrued or reserved. "Indemnified Party" means a party making a claim under Article XIV hereof. "Indemnifying Party" means a party against whom a claim is made under Article XIV hereof. "Intellectual Property" shall mean Patents, including shop rights, Trademarks, Technology, copyrights, trade secrets, registered designs, utility models and all other intellectual property rights whether registered or not, in each case wherever such rights exist throughout the world, and including the right to recover for any past infringements. "Intellectual Property Agreements" shall mean those documents including, without limitation, technology, know-how, patent and trademark licenses, transfers, assignments and agreements dated as of the Closing Date between Ecolab (and its Affiliates) and Henkel (and its Affiliates) necessary to accomplish the transactions contemplated by the Intellectual Property Plan. "Intellectual Property Plan" shall mean that certain intellectual property plan attached hereto as Exhibit E. "Joint Venture Agreement" shall mean that certain Amended and Restated Joint Venture Agreement, dated as of June 26, 1991, between Henkel and Ecolab. "Lease Agreement" shall mean that certain lease agreement dated as of the Closing Date between Ecolab and Henkel providing for continuation of Ecolab's lease of Henkel's training center and laundry facilities, designated L34 and L19 and currently used by the JV Entities, for a period of two (2) years after the Closing Date on the terms and conditions existing on the date hereof. "Liability" means any debt, obligation, commitment, responsibility or liability, whether accrued or fixed, known or unknown, contingent, absolute or otherwise, determined or undetermined and whenever arising. "Local Jurisdiction Agreements" shall mean those documents necessary to accomplish the transactions contemplated by the Transaction Documents in compliance with any local jurisdiction requirements and the Structuring Plan. "Material Adverse Effect" shall mean any event or occurrence that has had or may reasonably be expected to have a material adverse effect on the condition, financial or otherwise, business, operations, affairs, properties, assets or Liabilities of the relevant entity or business. "Patents" shall mean patents (including, without limitation, all reissues, divisions, continuations, continuations in part and extensions thereof), utility patents, patent applications, patent disclosures docketed and related patent rights. "Person" shall mean an individual, partnership, joint venture, corporation, limited liability company, trust, unincorporated organization, government or any department or agency thereof or any other entity. "Plans" shall mean all pension and employee benefit plans, profit sharing plans, bonus, deferred compensation, supplemental executive retirement plans, excess benefit plans, phantom stock, stock options, stock appreciation or other forms of incentive or other compensation plans or arrangements, and all welfare, severance, vacation and other employee fringe benefit plans maintained by Henkel or the JV Entities relating to the employees of the JV Entities. "Post-Signing Audited Financial Statements" shall mean the audited Post-Signing Financial Statements for the fiscal years ended on November 30, 2000 and 2001, together with the reports thereon of PricewaterhouseCoopers Gesellschaft mit beschrankter Haftung Wirtschaftsprufungsgesellschaft and KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft. "Post-Signing Financial Statements" shall mean the combined balance sheets of the JV Entities, and the related combined statements of income and comprehensive income, of equity and of cash flows for the periods then ended, to be delivered pursuant to Section 8.10 hereof, prepared in accordance with GAAP consistently applied and the past practice of the JV Entities. "Services Agreements" shall mean those documents including, without limitation, services agreements dated as of the Closing Date between Ecolab and Henkel, providing for continuation, for a period of two (2) years after the Closing Date and, thereafter, on a year-to-year basis unless terminated on one (1) year's prior notice of all services arrangements (including, without limitation, those services listed on Exhibit G attached hereto but excluding third-party liability insurance coverage) between Henkel (and its Affiliates) and the JV Entities, on the terms and conditions existing on the date hereof. "Structuring Plan" shall mean that certain Structuring Plan dated as of the Closing Date between Ecolab and Henkel, substantially in the form of Exhibit A attached hereto. "Subsidiary" shall mean in relation to an entity, any other entity with respect to which the first mentioned entity, directly or indirectly: (a) has the power to exercise more than half of the voting rights; or (b) has the power to appoint more than half the members of the supervisory board, the board of directors, the administrative board or other body or organ statutorily empowered to represent such undertaking. For purposes of this Agreement and the other Transaction Documents, the parties acknowledge that the JV Entities will not be considered Subsidiaries of either Ecolab or Henkel. "Taxes" shall mean any tax (including, without limitation, income, capital, gains, value added, customs, duties, salary and wage withholdings, social security contributions and stamp taxes) or fee (including, without limitation, registration fees), whether collected by way of withholding or otherwise, together with any related Liability, penalties, fines, additions to tax or interest thereon, howsoever due and owing, to any Governmental Entity irrespective of whether the Liability is primary or secondary (and including taxes of any other person for which Liability is imposed as a result of filing tax returns on a combined, affiliated, unitary, consolidated or similar basis). "Technology" means all technical information and know-how, confidential and non-confidential, including, without limitation, all computer software, research data, trade secrets and other proprietary know-how, formulas, operating manuals, copyright registrations and rights of ownership and authorship in documents and other artistic works, equipment and parts lists, product packaging instructions, product and production specifications, analytical and evaluation methods, sources and specifications for raw materials, efficacy, toxicity and general health and safety information and data, environmental compliance and regulatory information and data, research and development records, and manufacturing and product application know-how. "Toll Manufacturing Agreements" shall mean those documents including, without limitation, toll manufacturing agreements dated as of the Closing Date between Ecolab and Henkel (and its Subsidiaries), providing for continuation, for a period of two (2) years after the Closing Date and, thereafter, on a year-to-year basis unless terminated on one (1) year's prior notice, of all toll manufacturing and supply arrangements (including, without limitation, those set forth on Exhibit F attached hereto) between Henkel (and its Subsidiaries) and the JV Entities, on the terms and conditions existing on the date hereof. "Trademarks" shall mean all registered and unregistered trademarks, service marks, trade dress and trade names and related rights, logos and designs. "Transaction Documents" shall mean this Agreement, the Structuring Plan, the Intellectual Property Plan and Agreements, the Services Agreements, the Toll Manufacturing Agreements, the Local Jurisdiction Agreements, the Environmental Agreement, the Lease Agreement and all other documents and agreements executed in connection with the Closing, except for the Amended and Restated Stockholder's Agreement. "Transfer" shall mean any sale, transfer, offer for sale, exchange, pledge, mortgage, assignment or other disposition or conveyance. "Unaudited Financial Statements" shall mean the unaudited combined balance sheet of the JV Entities as of August 31, 2000, and the related combined statements of income and comprehensive income, of equity and of cash flows for the nine-month period then ended. 1.2. Other Defined Terms. The following terms shall have the meanings set forth in the sections referred to below: DEFINED TERM SECTION ------------ ------- "2001 Estimated Adjusted EBIT" 4.3 "Actual 2001 Adjusted EBIT" 4.3 "Adjusted EBIT" 4.2 "Adjusted EBIT Valuation" 4.1 "Agreement" Recitals "Auditor" 4.3 "Claim Notice" 14.5(a) "Claimant" 15.2 "Closing" 5.1 "Closing Date" 5.1 "Competing Business" 9.5 "Direct Claim" 14.5(a) "Disclosure Schedule" 9.2 "Dispute" 15.1 "EBIT" 4.2 "Ecolab" Recitals "Ecolab SEC Reports" 7.6 "Estimated Purchase Price" 4.3 "Exchange Act" 7.6 "Exchange Rate Average" 4.8 "Final Purchase Price" 4.3 "First Election Date" 4.5 "First Interim Period" 8.5(a)(i) "German Partnership" 8.5(a)(i)(D) "Governmental Antitrust Entity" 8.1(b)(ii) "Henkel" Recitals "HSR Act" 8.1(b)(i) "I.C.C." 15.2 "JV Entities" Recitals "JV Interests" Recitals "Measurement Date" 4.6 "Multiple" 4.1 "Post-Closing Period" 8.5(b) "Pre-Closing Periods" 8.5(a)(i) "Purchase Price" 4.1 "Respondent" 15.3 "SEC" 7.6 "Stipulated 2000 Adjusted EBIT" 4.3 "Straddle Period" 8.5(a)(i) "Third Party Claim" 14.5(a) "Umbrella Agreement" Recitals "Updated Disclosure Schedule" 9.3 ARTICLE II 2. EXECUTION AND TERMINATION OF AGREEMENTS 2.1. Amended and Restated Stockholder's Agreement. On the Closing Date, Ecolab and Henkel shall execute the Amended and Restated Stockholder's Agreement, which shall govern the rights and obligations of Henkel with respect to the ownership by Henkel and its Affiliates of shares of Ecolab Common Stock. 2.2. Intellectual Property Agreements. On the Closing Date, Ecolab and Henkel shall execute the Intellectual Property Agreements, which shall govern the rights and obligations of Ecolab, Henkel and the JV Entities with respect to certain Intellectual Property of Ecolab, Henkel and the JV Entities. 2.3. Services Agreements. On the Closing Date, Ecolab and Henkel shall execute the Services Agreements related to certain services to be provided by Henkel to the JV Entities following the Closing Date. 2.4. Umbrella Agreement. Effective on the Closing Date, the Umbrella Agreement shall terminate and be of no further force or effect, except with respect to claims made by the parties thereunder which are pending on the Closing Date which claims shall continue to be governed by the Umbrella Agreement. 2.5. Joint Venture Agreement. Effective on the Closing Date, the Joint Venture Agreement shall terminate and be of no further force or effect, except with respect to claims made by the parties thereunder which are pending on the Closing Date which claims shall continue to be governed by the Joint Venture Agreement. 2.6. Toll Manufacturing Agreements. On the Closing Date, Ecolab and Henkel shall execute the Toll Manufacturing Agreements related to certain manufacturing arrangements to exist between Henkel (and its Subsidiaries) and the JV Entities following the Closing Date. 2.7. Environmental Agreement. On the Closing Date, Ecolab and Henkel shall execute the Environmental Agreement. 2.8. Local Jurisdiction Agreements. On the Closing Date and/or as promptly as practicable thereafter, as applicable, Ecolab and Henkel shall, in accordance with Section 3.3 hereof, execute the Local Jurisdiction Agreements. 2.9. Lease Agreement. On the Closing Date, Ecolab and Henkel shall execute the Lease Agreement. ARTICLE III 3. TRANSFER OF JV INTERESTS 3.1. Transfer. Upon the terms and provisions of this Agreement and in accordance with the Structuring Plan, Ecolab agrees to (or shall cause the applicable Ecolab Entity to) acquire and accept delivery (from Henkel or the applicable Henkel Entity) of, and Henkel agrees to (or shall cause the applicable Henkel Entity to) assign, transfer and deliver to Ecolab or the applicable Ecolab Entity, at the Closing, the JV Interests, free and clear of all Encumbrances, other than restrictions on Transfer pursuant to applicable securities laws. 3.2. Structuring Plan. Ecolab and Henkel hereby agree that the transactions contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement will be completed in accordance with the timing and other provisions of the Structuring Plan. 3.3. Local Jurisdiction Agreements. Ecolab and Henkel hereby agree to cooperate and undertake all actions necessary or appropriate to consummate the transactions contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement in compliance with the requirements of the local jurisdictions where the businesses of the JV Entities are conducted and in accordance with the timing and other provisions of the Structuring Plan. ARTICLE IV 4. CONSIDERATION 4.1. Purchase Price. Subject to the terms and conditions of this Agreement, the consideration to be paid by Ecolab (or its Affiliates) to Henkel (or its Affiliates) for the JV Interests (and the intellectual property (as described in the Intellectual Property Plan)) shall be calculated in accordance with this Article IV and shall be equal to the Adjusted EBIT Valuation (expressed in Euro) of the JV Entities ("Purchase Price"). The "Adjusted EBIT Valuation" shall be calculated by multiplying the average of the Stipulated 2000 Adjusted EBIT (as hereinafter defined) and the Adjusted EBIT of the JV Entities (taken as a whole) for the fiscal year ended November 30, 2001 by 5.498 ("Multiple"). 4.2 Adjusted EBIT. "Adjusted EBIT" shall mean the operating income (that is, earnings before interest and taxes and other expenses/income, net) of the JV Entities (taken as a whole) for the fiscal year ended November 30, 2001 as reflected in the Post-Signing Audited Financial Statements for such year prepared in accordance with GAAP consistently applied ("EBIT"), provided that the following adjustments shall be made to the actual EBIT of the JV Entities: (i) the amount of all expenses of the JV Entities for royalties paid to Henkel and to Ecolab by any of the JV Entities during fiscal year 2001, as reflected in the operating income in the Post-Signing Audited Financial Statements for such period, shall be added back to the actual EBIT of the JV Entities; (ii) exclude the impact in the income statement in the Post-Signing Audited Financial Statements for fiscal year 2001 of non-recurring, unusual items (if agreed to by the parties); (iii) the parties agree to exclude in the income statement in the Post-Signing Audited Financial Statements for fiscal year 2001 the impact of Germany early retirement and related costs and the results of over-funded pensions in Sweden and The Netherlands; and (iv) all earnings adjustments attributable to changes in accounting principles permitted or required under GAAP or other applicable accounting principles which are first implemented for the JV Entities in the 2001 fiscal year shall be excluded (subtracted or added back, as the case may be) from the actual EBIT of the JV Entities. For purposes of this Article IV, the parties agree that, notwithstanding any other provision to the contrary, the Adjusted EBIT for the fiscal year ended November 30, 2000 is Euro 94.23 million (the "Stipulated 2000 Adjusted EBIT"). 4.3 Determination of Purchase Price. In the event that the Post-Signing Audited Financial Statements of the JV Entities for the fiscal year ended November 30, 2001 are not available prior to the Measurement Date (as hereinafter defined), then the parties shall estimate the Adjusted EBIT for the fiscal year ended November 30, 2001 based on the internal unaudited management accounts of the JV Entities available as of the third business day prior to the Measurement Date (the "2001 Estimated Adjusted EBIT") as presented to the parties by the chief financial officer of the JV Entities and the Purchase Price payable at the Closing shall be based on such 2001 Estimated Adjusted EBIT (as well as the Stipulated 2000 Adjusted EBIT) (the "Estimated Purchase Price"). In such event, the JV Entities shall, within ninety (90) days after the Closing, deliver to Henkel and Ecolab Post-Signing Audited Financial Statements of the JV Entities (taken as a whole) for the fiscal year ended November 30, 2001, prepared in the same manner as is consistent with the past practice of the JV Entities and in accordance with GAAP consistently applied, and the actual Adjusted EBIT for the fiscal year ended November 30, 2001 shall be derived from such statements (the "Actual 2001 Adjusted EBIT"). The Adjusted EBIT Valuation and final Purchase Price shall then be calculated based on the Stipulated 2000 Adjusted EBIT and the Actual 2001 Adjusted EBIT (the "Final Purchase Price"). In the event the Final Purchase Price exceeds the Estimated Purchase Price, Ecolab shall, within ten (10) days after the final determination of the Final Purchase Agreement, pay to Henkel the amount of such difference payable in the form of consideration elected by Henkel pursuant to Section 4.5. In the event such election shall have been for Ecolab Common Stock, Ecolab shall issue that number of shares of Ecolab Common Stock with a value equal to such difference, with such valuation determined pursuant to the procedures set forth in Section 4.6 (and subject to Section 4.7 hereof). In the event the Estimated Purchase Price exceeds the Final Purchase Price, Henkel shall within ten (10) days after the final determination of the Final Purchase Agreement pay to Ecolab the amount of such difference in the form of consideration elected by Henkel pursuant to Section 4.5. In the event such election shall have been for Ecolab Common Stock, Henkel shall surrender for cancellation that number of shares of Ecolab Common Stock with a value equal to such difference, with such valuation determined pursuant to the procedures set forth in Section 4.6; provided, however, that Henkel may elect to pay to Ecolab the amount of such difference in cash (in U.S. dollars) but, in this event, the amount of cash to be paid to Ecolab shall be determined by multiplying (x) the number of shares that would have been surrendered in accordance with this sentence by (y) the average closing price of Ecolab Common Stock on the New York Stock Exchange over the fifteen consecutive trading days ending on the business day immediately preceding the date of such payment. The Final Purchase Price shall be deemed to be the Purchase Price for purposes of this Agreement, except, in this Article IV, as the context otherwise requires. Any disputes regarding the Post-Signing Audited Financial Statements of the JV Entities (taken as a whole) for the fiscal year ended November 30, 2001, or the calculation of the Final Purchase Price, shall be resolved in accordance with Section 4.4. 4.4 Disagreement. Notwithstanding Article XV hereof, if Ecolab and Henkel disagree as to the amount of the Actual 2001 Adjusted EBIT, Ecolab and Henkel shall promptly consult with each other in an effort to resolve such dispute. If the disagreement is not resolved within fifteen (15) days after the date of consultation, Ecolab and Henkel shall, within ten (10) days after such 15-day period, jointly engage a neutral "Big Five" accounting firm (the "Auditor") to act as an arbitrator to resolve all points of disagreement concerning such Adjusted EBIT number. All fees and expenses relating to the work performed by any Auditor or arbitrator in accordance with this Section 4.4 shall be borne equally by Ecolab and Henkel, unless otherwise ordered by the Auditor or arbitrator. 4.5 Election as to Form of Consideration. At Henkel's option, Henkel shall irrevocably elect to have the Purchase Price paid in its entirety in cash (in Euro) or in shares of Ecolab Common Stock. Henkel shall notify Ecolab of its election at least 45 business days prior to Closing (the "First Election Date") so that Ecolab has sufficient time to arrange financing. Henkel may make its election as to the form of consideration after the First Election Date, but in any case not later than the Measurement Date (defined in Section 4.6 below) provided that, in such event, if cash is the form of consideration so elected by Henkel, then Ecolab will have the option to make such payment by delivering an unsecured, non-negotiable promissory note in the principal amount equal to the Purchase Price payable to Henkel in Euro with a maturity 60 days after Closing and bearing interest at the two-month LIBOR rate plus thirty (30) basis points, as quoted on Telerate page number 3750 as of 11:00 a.m. London time, per annum. Once Henkel notifies Ecolab of its election pursuant to this Section, the election may not be revoked or changed. 4.6 Consideration Paid With Ecolab Shares. If Henkel elects to have the Purchase Price paid by Ecolab in shares of Ecolab Common Stock, then the Purchase Price shall be converted into U.S. Dollars at the average of the Dollar/Euro reference exchange rates as announced by the European Central Bank (the "Exchange Rate Average") for the 15 business days immediately prior to the date that is 5 business days before Closing (such date, the "Measurement Date"). Subject to Section 4.7 below, after giving effect to such currency exchange rate calculation, the U.S. Dollar equivalent of the Purchase Price shall then be divided by $41.0625 per share to yield a number of shares of Ecolab Common Stock that will be delivered to Henkel as the Purchase Price. 4.7 Collar on Number of Ecolab Shares. Notwithstanding anything in this Agreement to the contrary, the number of shares of Ecolab Common Stock to be issued by Ecolab and delivered to Henkel at Closing shall not be greater than 13,203,672 or less than 9,270,664; so in the event that the number of shares to be issued pursuant to Section 4.6 is greater than 13,203,672 then 13,203,672 shall be the number of shares issued pursuant to this Agreement, and in the event the number of shares is less than 9,270,664, then 9,270,664 shall be the number of the shares issued pursuant to this Agreement, and, in any such case, no further Purchase Price shall be due. Notwithstanding the foregoing or any other provision of this Agreement, in no case shall shares of Ecolab Common Stock be issued hereunder which would cause Henkel to exceed the Permitted Percentage (as defined in the Amended and Restated Stockholder's Agreement) and the shares issued pursuant to this Agreement shall be capped accordingly. ARTICLE V 5. CLOSING 5.1. Closing Date and Conditions. Subject to Articles XI and XII hereof, the closing of the transactions provided for in the Transaction Documents (the "Closing") shall take place at Henkel's offices in Dusseldorf, at 11:00 a.m., local time, on the later of (a) January 2, 2002, or (b) the fifth (5th) business day following the satisfaction of or waiver of all of the closing conditions set forth in Articles XI and XII hereof, or at such other location or time as the parties hereto may agree (the "Closing Date"). 5.2. Deliveries by Henkel. At the Closing, Henkel will, or will cause the Henkel Entities or the JV Entities to, take all necessary action to convey, transfer and assign the JV Interests to Ecolab or the Ecolab Entities, and to enter into such agreements and take such other actions as may be reasonably required, in the respective jurisdictions where the JV Entities are located, for the consummation of the transactions contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement, all in accordance with the Transaction Documents, the Amended and Restated Stockholder's Agreement and the Structuring Plan. In furtherance of and without limiting the generality of the foregoing, Henkel will, or will cause the Henkel Entities or the JV Entities to, deliver or cause to be delivered to Ecolab: (a) stock certificates, partnership certificates, limited liability company certificates and other similar instruments representing the JV Interests, free and clear of Encumbrances, other than restrictions on Transfer pursuant to applicable securities laws, which certificates shall be duly endorsed to Ecolab or the Ecolab Entities, as set forth in the Structuring Plan, or accompanied by duly executed stock powers, notarial deeds or other applicable transfer documents in form reasonably satisfactory to Ecolab, along with the originals of any of the stock ledgers, minute books and other corporate, partnership, limited liability company and similar records of the JV Entities held by Henkel; (b) a certificate of Henkel, in form reasonably satisfactory to Ecolab, certifying (i) as to the accuracy of Henkel's representations and warranties under this Agreement and the other Transaction Documents at and as of the Closing, (ii) that Henkel has performed and complied with all of the terms, provisions and conditions to be performed and complied with by Henkel under this Agreement at or before the Closing, and (iii) that the conditions precedent set forth in Article XI have been satisfied or waived; (c) resignations (effective as of the Closing Date) of the members of the Shareholders Committees and of the Boards of Directors of the JV Entities appointed by Henkel; (d) an executed original of each relevant Transaction Document and the Amended and Restated Stockholder's Agreement; (e) (i) a certified copy of a recent excerpt from the Commercial Register at the Lower Court of Dusseldorf regarding the registration of Henkel from a day dated less than 30 days prior to the Closing Date, and (ii) an excerpt signed by the Secretary of the committee of the minutes of a stockholders' committee (Gesellschafterausschuss) meeting in which the committee members have with the requisite majority approved the execution, delivery and performance of this Agreement and the other Transaction Documents and the Amended and Restated Stockholder's Agreement and consummation of all of the transactions contemplated by such agreements; (f) a written legal opinion of Henkel's General Counsel in a form agreed to by the parties reasonably in advance of the Closing and covering customary matters; and (g) such other documents in form and substance reasonably satisfactory to Ecolab, as may be reasonably requested by Ecolab in order to effect the Closing or complete the transactions contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement. 5.3. Deliveries by Ecolab. At the Closing, Ecolab will, or will cause its Subsidiaries to, take all necessary actions and enter into such agreements as may be reasonably required, in the respective jurisdictions where the JV Entities are located, for the consummation of the transactions contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement, all in accordance with the Transaction Documents, the Amended and Restated Stockholder's Agreement and the Structuring Plan. In furtherance of and without limiting the generality of the foregoing, Ecolab will, or will cause its Subsidiaries to, deliver or cause to be delivered to Henkel: (a) the Purchase Price consideration to be paid to Henkel; (b) a certificate of Ecolab, in form reasonably satisfactory to Henkel, certifying (i) as to the accuracy of Ecolab's representations and warranties at and as of the Closing, (ii) that Ecolab has performed and complied with all of the terms, provisions and conditions to be performed and complied with by Ecolab under this Agreement at or before the Closing, and (iii) that the conditions precedent set forth in Article XII have been satisfied or waived; (c) an executed original of each relevant Transaction Document and the Amended and Restated Stockholder's Agreement; (d) a copy of each of (i) the text of the resolutions adopted by the Board of Directors of Ecolab authorizing the execution, delivery and performance of this Agreement, the other Transaction Documents and the Amended and Restated Stockholder's Agreement and the consummation of all of the transactions contemplated by this Agreement, the other Transaction Documents and the Amended and Restated Stockholder's Agreement, (ii) the Bylaws of Ecolab, along with certificates executed on behalf of Ecolab by its corporate secretary certifying to Ecolab that such copies are true, correct and complete copies of such resolutions and Bylaws, respectively, and that such resolutions and Bylaws were duly adopted and have not been amended or rescinded; and (iii) a good standing certificate with respect to Ecolab certified by the Secretary of State of the State of Delaware as of a date not more than thirty (30) days prior to Closing; (e) a written legal opinion of Ecolab's General Counsel in a form agreed to by the parties reasonably in advance of the Closing and covering customary matters and (f) such other documents in form and substance reasonably satisfactory to Henkel, as may be reasonably requested by Henkel in order to effect the Closing or complete the transactions contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement. 5.4. Further Assurances. After the Closing Date, each party hereto shall, or shall cause its respective Affiliates to, from time to time, at the request of the other party and without further cost or expense to the party making the request, execute and deliver (and, if appropriate, file) or cause to be executed and delivered (and, if appropriate, filed) such other instruments of conveyance and transfer as the other party may reasonably request and continue to use reasonable efforts to obtain any consents, approvals, authorizations and waivers necessary in order to more effectively consummate the transactions contemplated herein, in the other Transaction Documents and in the Amended and Restated Stockholder's Agreement. ARTICLE VI 6. REPRESENTATIONS AND WARRANTIES OF HENKEL Henkel hereby represents and warrants to Ecolab that: 6.1 Corporate Organization, etc. Henkel and each of the Henkel Entities is a corporation or partnership duly organized, validly existing and, if relevant, in good standing under the laws of the jurisdiction of its incorporation or formation, and each has all requisite corporate or partnership power and authority to own, operate and lease its respective properties and assets and to conduct its respective businesses as now conducted and is qualified to do business in each jurisdiction where the nature of its properties, assets or businesses requires such qualification other than where the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect on Henkel and the Henkel Entities, taken as a whole. 6.2 Authorization, etc. Henkel and each of the Henkel Entities has the full power and authority to execute, deliver and carry out the terms and provisions of the Transaction Documents and the Amended and Restated Stockholder's Agreement to be executed, delivered and carried out by it and to consummate the transactions contemplated thereby. Henkel has, and prior to the Closing Date all Henkel Entities shall have, taken all necessary corporate or partnership action to authorize the execution, delivery and performance of this Agreement. Henkel and the Henkel Entities shall have, prior to the Closing Date, taken all necessary corporate or partnership action to authorize the execution, delivery and performance of the other Transaction Documents and the Amended and Restated Stockholder's Agreement. This Agreement is, and the other Transaction Documents and the Amended and Restated Stockholder's Agreement will be, when executed and delivered, legal, valid and binding agreements of Henkel and the appropriate Henkel Entities, enforceable against them in accordance with their terms, except to the extent that (a) such enforceability may be limited by laws of public policy or bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting creditors, rights generally and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to certain equitable defenses and to the discretion of the court before which any proceedings therefor may be brought. 6.3 No Violation; No Consent. Except as set forth in Schedule 6.3, the execution and delivery of the Transaction Documents and the Amended and Restated Stockholder's Agreement and the consummation of the transactions contemplated thereby will not conflict with, result in the breach of any of the terms or conditions of, constitute a default under or violate, accelerate or permit the acceleration of any other similar right of any other party or result in the creation or imposition of any Encumbrance on any of the assets or properties of Henkel under the Charter (Satzung) of Henkel or the constituent documents of any Henkel Entity or any JV Entity, any Applicable Laws or any agreement, lease, mortgage, note, bond, indenture, license or other document or undertaking, to which Henkel, any Henkel Entity or any JV Entity is a party or by which Henkel, any Henkel Entity, any JV Entity or any of its or their properties may be bound, nor will such execution, delivery and consummation violate any order, writ, injunction or decree of any Governmental Entity to which Henkel, any Henkel Entity, any JV Entity or any of its or their properties is subject, the effect of any of which, either individually or in the aggregate, would impair the ability of Henkel or any Henkel Entity to perform its obligations under the Transaction Documents and the Amended and Restated Stockholder's Agreement, have a Material Adverse Effect on Henkel and its Subsidiaries, taken as a whole, or the JV Entities, taken as a whole, or materially diminish the benefits intended to be afforded to Ecolab under any of the Transaction Documents or the Amended and Restated Stockholder's Agreement. The execution, delivery and performance by Henkel or any Henkel Entity of this Agreement, the other Transaction Documents and the Amended and Restated Stockholder's Agreement will not require any notice to, filing with, or the consent, approval or authorization of any Person or Governmental Entity, except as contemplated in Section 8.1(b), filings under the Exchange Act (as hereinafter defined), and except for such consents, approvals or authorizations the failure of which to obtain or make, individually or in the aggregate, would not be reasonably expected to have a Material Adverse Effect on the JV Entities, taken as a whole, or materially diminish the benefits intended to be afforded to Ecolab under any of the Transaction Documents or the Amended and Restated Stockholder's Agreement 6.4 Capitalization; Ownership. Henkel and the Henkel Entities, as appropriate, own, beneficially and of record, the JV Interests, free and clear of all Encumbrances other than restrictions on Transfer pursuant to applicable securities laws, and have, subject to compliance with such securities laws, full power and legal right to sell, assign, transfer and deliver the same to Ecolab. Upon consummation of the transactions contemplated by the Transaction Documents, Ecolab shall acquire in accordance with the Structuring Plan all issued and outstanding shares of each class of capital stock and all partnership interests or other equity interests of the JV Entities free and clear of all Encumbrances other than restrictions on Transfer pursuant to applicable securities laws. 6.5 Compliance with Laws, etc. Henkel, each Henkel Entity and the JV Entities have obtained and maintain in full force and effect all permits, licenses, consents, approvals, registrations, memberships, authorizations and qualifications under all federal, state, local and foreign laws and regulations, and with all Governmental Entities, required for the conduct by them of their businesses and the ownership or possession by them of their properties and assets other than where the failure to obtain or maintain such permits, licenses, consents, approvals, registrations, memberships, authorizations or qualifications would not, individually or in the aggregate, have a Material Adverse Effect on the JV Entities, taken as a whole. The business of each of Henkel, the Henkel Entities and the JV Entities has each been conducted in compliance with all Applicable Laws (excepting environmental matters which are set forth in the Environmental Agreement), other than where the failure so to comply would not, individually or in the aggregate, have a Material Adverse Effect on the JV Entities, taken as a whole. 6.6 Financial Statements. Except as set forth in the notes thereto, the Audited Financial Statements were, and the Post-Signing Audited Financial Statements will be, prepared from the books and records of the JV Entities and present fairly, and the Post-Signing Audited Financial Statements will present fairly, in all material respects, the financial position of the JV Entities as of the respective dates of said balance sheets and the results of their operations and their cash flows for the periods then ended in conformity with GAAP consistently applied. 6.7 Undisclosed Liabilities. The JV Entities have no Liabilities, except Liabilities (a) adequately provided for in the balance sheet which is part of the Unaudited Financial Statements as of August 31, 2000, or (b) which would not, individually or in the aggregate, have a Material Adverse Effect on the JV Entities, taken as a whole. 6.8 No Material Adverse Change, etc. Since August 31, 2000, the business of each of the JV Entities has been conducted only in the ordinary and usual course consistent with past practice, except for matters jointly approved by Henkel and Ecolab at a meeting of the Board of Directors of a JV Entity. Since August 31, 2000 the JV Entities, taken as whole, have not suffered a Material Adverse Effect. 6.9 JV Entities' Assets. The properties and assets owned, leased or licensed by the JV Entities, together with the Lease Agreement, the properties transferred or licensed to JV Entities by Henkel under the Intellectual Property Plan and the services provided JV Entities by Henkel under the Services Agreements and the Toll Manufacturing Agreements, shall permit Ecolab immediately after the Closing to continue to conduct the business of the JV Entities substantially as it has heretofore been conducted. Except for Henkel's manufacturing facilities, the properties covered by the Lease Agreement, and certain of Henkel's facilities used to render the services set forth on Exhibit G hereto, there is no material real or personal property owned by Henkel or by any of its Affiliates (other than the JV Entities) which is used or held for use primarily in the operation of the JV Entities. Except as would not have a Material Adverse Effect on the JV Entities, taken as a whole, neither Henkel nor any Henkel Entity has received, written notice of any proceedings, claims or disputes affecting any material real or leased property which is used or held for use in connection with the business of the JV Entities that might curtail or interfere with the use of any such real or leased property. Except as would not have a Material Adverse Effect on the JV Entities, taken as a whole, there is no condemnation proceeding, expropriation or other exercise of power of eminent domain pending or, to the knowledge of Henkel, threatened which would impair or preclude the use of any material real or personal property (whether owned, leased or licensed) by the JV Entities. 6.10 Transactions with Affiliates. The services agreements listed on Exhibit G the toll manufacturing and supply agreements listed on Exhibit F, and the lease for Henkel's training center and laundry facilities constitute all material agreements or arrangements between Henkel or any of its Affiliates (other than the JV Entities), on the one hand, and any JV Entity, on the other hand, in effect as of the date hereof and, as of the Closing Date, no further such affiliated arrangement shall exist which has not been approved in writing by Ecolab. 6.11 Investment Representation. Any shares of Ecolab Common Stock delivered pursuant to this Agreement will be subject to the Amended and Restated Stockholder's Agreement and are being acquired by Henkel for its own account and not with a view to the public distribution thereof. Henkel acknowledges that the sale of the Ecolab Common Stock pursuant to this Agreement has not been registered under Applicable Laws (including, without limitation, the Securities Act of 1933, as amended, and any state, local or foreign securities law) and that the Ecolab Common Stock may not be Transferred without registration under, pursuant to an exemption from or in a transaction not subject to, all Applicable Laws. 6.12 Disclosure. Henkel does not make any representation or warranty regarding the transactions contemplated by this Agreement, except as set forth in this Agreement, the other Transaction Documents and the Amended and Restated Stockholder's Agreement. ARTICLE VII 7. REPRESENTATIONS AND WARRANTIES OF ECOLAB Ecolab represents and warrants to Henkel as follows: 7.1. Corporate Organization, etc. Ecolab and each Ecolab Entity existing on the date hereof is, and each Ecolab Entity organized after the date hereof will be prior to the Closing Date, a corporation or partnership duly organized, validly existing and, if relevant, in good standing under the laws of the jurisdiction of its incorporation or formation, and each has, and each Ecolab Entity organized after the date hereof will have prior to the Closing Date, all requisite corporate or partnership power and authority to own, operate and lease its respective properties and assets and to conduct its respective businesses as now conducted and is, and each Ecolab Entity organized after the date hereof will be prior to the Closing Date, qualified to do business in each state or other jurisdiction where the nature of its properties, assets or businesses requires such qualification other than where the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect on Ecolab and its Subsidiaries, taken as a whole. 7.2. Authorization, etc. (a) Ecolab and each of the Ecolab Entities existing on the date hereof has, and each Ecolab Entity organized after the date hereof will have prior to the Closing Date, the full power and authority to execute, deliver and carry out the terms and provisions of the Transaction Documents and the Amended and Restated Stockholder's Agreement to be executed, delivered and carried out by it and to consummate the transactions contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement. Ecolab has, and prior to the Closing Date all Ecolab Entities shall have, taken all necessary corporate or partnership action to authorize the execution, delivery and performance of this Agreement. Ecolab and the Ecolab Entities shall have, prior to the Closing Date, taken all necessary corporate or partnership action to authorize the execution, delivery and performance of the other Transaction Documents and the Amended and Restated Stockholder's Agreement. This Agreement is, and the other Transaction Documents and the Amended and Restated Stockholder's Agreement will be, when executed and delivered, legal, valid and binding agreements of Ecolab and the appropriate Ecolab Entities, enforceable against them in accordance with their terms, except to the extent that (i) such enforceability may be limited by laws of public policy or bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting creditors' rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to certain equitable defenses and to the discretion of the court before which any proceedings therefor may be brought. (b) The Board of Directors of Ecolab has taken all steps necessary to authorize the acquisition by Henkel of Ecolab Common Stock pursuant to the Transaction Documents and as permitted by the Amended and Restated Stockholder's Agreement under Section 203 of the Delaware General Corporation Law and neither the execution of the Transaction Documents and the Amended and Restated Stockholder's Agreement nor the acquisition of such Ecolab Common Stock by Henkel shall create any rights for other stockholders or impair Henkel's rights as a stockholder under the Rights Agreement, dated February 24, 1996, between Ecolab and First Chicago Trust Company of New York, as rights agent. 7.3. No Violation; No Consent. The execution and delivery of the Transaction Documents and the Amended and Restated Stockholder's Agreement and the consummation of the transactions contemplated thereby will not conflict with, result in the breach of any of the terms or conditions of, constitute a default under or violate, accelerate or permit the acceleration of any other similar right of any other party or result in the creation or imposition of any Encumbrance on any of the assets or properties of Ecolab under the Restated Certificate of Incorporation or Bylaws of Ecolab or the constituent documents of any Ecolab Entity, any Applicable Laws or any agreement, lease, mortgage, note, bond, indenture, license or other document or undertaking, to which Ecolab or any Ecolab Entity is a party or by which Ecolab, any Ecolab Entity or any of its or their properties may be bound, nor will such execution, delivery and consummation violate any order, writ, injunction or decree of any Governmental Entity to which Ecolab, any Ecolab Entity or any of its properties is subject, the effect of any of which, either individually or in the aggregate, would impair the ability of Ecolab or any Ecolab Entity to perform its obligations under the Transaction Documents and the Amended and Restated Stockholder's Agreement, have a Material Adverse Effect on Ecolab and its Subsidiaries, taken as a whole, or materially diminish the benefits intended to be afforded to Henkel under any of the Transaction Documents or the Amended and Restated Stockholder's Agreement. The execution, delivery and performance by Ecolab of this Agreement, the other Transaction Documents and the Amended and Restated Stockholder's Agreement will not require any notice to, filing with, or the consent, approval or authorization of any Person or Governmental Entity, except as contemplated in Section 8.1(b) and except for such consents, approvals or authorizations the failure of which to obtain or make, individually or in the aggregate, would not be reasonably expected to have a Material Adverse Effect on Ecolab and its Subsidiaries, taken as a whole, or materially diminish the benefits intended to be afforded to Henkel under any of the Transaction Documents or the Amended and Restated Stockholder's Agreement. 7.4. Compliance with Laws, etc. Ecolab and each Ecolab Entity has obtained and maintains in full force and effect all permits, licenses, consents, approvals, registrations, memberships, authorizations and qualifications under all federal, state, local and foreign laws and regulations, and with all Governmental Entities, required for the conduct by them of their businesses and the ownership or possession by them of their properties and assets other than where the failure to obtain or maintain such permits, licenses, consents, approvals, registrations, memberships, authorizations or qualifications would not, individually or in the aggregate, have a Material Adverse Effect on Ecolab and the Ecolab Entities, taken as a whole. The business of Ecolab and the Ecolab Entities has each been conducted in compliance with all Applicable Laws, other than where the failure so to comply would not, individually or in the aggregate, have a Material Adverse Effect on Ecolab and the Ecolab Entities, taken as a whole. 7.5. Capital Stock. (a) The shares of Ecolab Common Stock acquired by Henkel pursuant to the Transaction Documents and the Amended and Restated Stockholder's Agreement, when issued and delivered by Ecolab pursuant to the Transaction Documents and the Amended and Restated Stockholder's Agreement, will be in due and proper form, will have been duly authorized by all necessary corporate action on the part of Ecolab, and will be validly issued, fully paid and non-assessable. Henkel, or its designee in accordance with the Structuring Plan, will acquire valid and marketable title to such shares of Ecolab Common Stock issued on the Closing Date, free and clear of any Encumbrances except as contemplated by this Agreement, the Amended and Restated Stockholder's Agreement or as the result of actions taken by Henkel or pursuant to applicable securities laws. (b) As of the date hereof, the authorized capital stock of Ecolab consists of 200,000,000 shares of Ecolab Common Stock, of which 127,014,480 shares were issued and outstanding as of October 31, 2000 (excluding approximately 20,368,740 shares held in treasury as of such date), and 15,000,000 shares of preferred stock, without par value, of which no shares are issued and outstanding. All of the issued and outstanding shares of Ecolab Common Stock have been validly issued and are fully paid and non-assessable. (c) On the date hereof, there are not authorized or outstanding any subscriptions, options, conversion rights, warrants or other agreements, securities or commitments of any nature whatsoever (whether oral or written and whether firm or conditional) obligating Ecolab or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, to any person any shares of Ecolab Common Stock or any other shares of the capital stock of Ecolab or any shares of the capital stock of any Ecolab Entity, other than the organization of certain Ecolab companies as contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement, or any securities convertible into or exchangeable for any such shares, or obligating any such person to grant, extend or enter into any such agreement or commitment, except (i) as contemplated by the Amended and Restated Stockholder's Agreement dated June 26, 1991 between Henkel and Ecolab, the Transaction Documents and the Amended and Restated Stockholder's Agreement, (ii) 1,000,000 shares of Series A Junior Participating Preferred Stock reserved for issuance pursuant to the Rights Agreement dated February 24, 1996 between Ecolab and First Chicago Trust Company of New York as rights agent, and (iii) 16,405,502 shares of Common Stock reserved pursuant to Ecolab's employee and director benefit, incentive and compensation plans as of October 31, 2000. No class of capital stock of Ecolab is entitled to preemptive rights. 7.6. SEC Filings. Ecolab has filed with the Securities and Exchange Commission (the "SEC") all proxy statements and periodic reports required to be filed by it since January 1, 2000 (collectively, the "Ecolab SEC Reports") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Henkel acknowledges that it has received copies of the Ecolab SEC Reports filed with the SEC. Each Ecolab SEC Report was in compliance in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC thereunder and did not on the date of its filing contain any 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, in light of the circumstances under which they were made, not misleading. 7.7. Financial Statements. Except as set forth in the notes thereto, the audited financial statements included in the Ecolab SEC Reports were prepared from the books and record of Ecolab and present fairly, in all material respects, the financial position of Ecolab and its consolidated Subsidiaries as of the date of such financial statements and the results of their operations and their cash flows for the periods then ended in conformity with GAAP consistently applied. 7.8. Investment Representation. Ecolab (including any relevant Affiliate) is acquiring the JV Interests for its own account for the purpose of investment and not with a view to the distribution thereof or dividing all or any part of its interest therein with any other Person. Ecolab acknowledges that the sale of the JV Interests has not been registered under Applicable Laws (including, without limitation, the Securities Act of 1933, as amended, and any state, local or foreign securities law) and that the JV Interests may not be Transferred without registration under, pursuant to an exemption from or in a transaction not subject to, all Applicable Laws. 7.9. Disclosure. Ecolab does not make any representation or warranty regarding the transactions contemplated by this Agreement except as set forth in this Agreement, the other Transaction Documents and the Amended and Restated Stockholder's Agreement. ARTICLE VIII 8. COVENANTS OF ECOLAB AND HENKEL 8.1. Nonassignability; Consents and Approvals. (a) Ecolab and Henkel shall each use its reasonable efforts to ensure that the approvals, authorizations, orders, rulings and consents of and filings and registrations required under Applicable Laws with Governmental Entities including, without limitation, filings under any Antitrust Laws and other approvals and consents of other Persons necessary for the transactions contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement to be consummated are obtained or made at the earliest possible times. (b) Without limiting the generality of the undertakings pursuant to this Section 8.1, Ecolab and Henkel agree to take or cause to be taken the following actions: (i) File any Notification and Report Form and related materials required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations promulgated thereunder (the "HSR Act") as soon as practicable and in any event not later than thirty (30) days after the later of the date hereof and the date on which such filing becomes necessary; (ii) Provide promptly to Governmental Entities with regulatory jurisdiction over enforcement of any Antitrust Laws ("Governmental Antitrust Entity") filings, notifications, information and documents required or requested by any Governmental Antitrust Entity or necessary, proper or advisable to permit consummation of the transactions contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement; Ecolab takes the lead in these filings in Europe; Henkel will cooperate and furnish all information and material pertaining to it or its Subsidiaries requested by Ecolab or any Governmental Antitrust Entity and Ecolab shall be entitled to rely on the accuracy of such information and material. If any party hereto receives such a request for additional information or documents, then such party shall promptly provide to the other copies of such request and endeavor in good faith to make, or cause to be made, as soon as reasonably practicable and after consultation with the other party, an appropriate response in compliance with such request, and thereafter use its reasonable efforts to certify as soon as practicable its substantial compliance with any such request; and (iii) In the event of any pending or threatened preliminary injunction or other order, decree, ruling, executive order or Applicable Laws that would make unlawful, prevent, delay or otherwise adversely affect the ability of the parties hereto to consummate the transactions contemplated hereby, each party shall promptly use its reasonable efforts to take any and all steps (including, without limitation, the posting of a bond) necessary to lift, rescind, vacate, modify or suspend such action so as to permit such consummation (including, without limitation, negotiating in good faith mutually satisfactory remedial commitments with any and all Governmental Antitrust Entities and litigating, contesting or otherwise challenging in good faith any such actions). Notwithstanding the foregoing sentence, neither party shall be obligated to appeal the decision of an agency or a court of competent jurisdiction which enters a final or preliminary order or injunction enjoining the consummation of the transactions contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement. (c) Each party hereto shall promptly inform the other of any material communication from any Governmental Antitrust Entity regarding any of the transactions contemplated hereby. Ecolab and Henkel agree that all meetings, and to the extent reasonably practicable all telephonic calls, with a Governmental Antitrust Entity regarding the transactions contemplated hereby or any of the matters described in this Section 8.1(c) shall include representatives of each of Ecolab and Henkel. (d) Without prejudice to Articles XI and XII hereof, in the event that any such approvals, authorizations, orders, rulings and consents of Governmental Entities cannot be obtained or can only be obtained under certain conditions, (i) Ecolab and Henkel shall use their reasonable efforts to negotiate in good faith suitable substitute arrangements that will permit the Closing Date to occur with the least onerous consequences possible and without material adverse consequences to the respective benefits to be derived therefrom by the parties and (ii) the burdens of any such arrangements shall be shared equitably, including through possible reduction of the Purchase Price. (e) To the extent that any agreement or any license, permit or approval used in or associated with the business of the JV Entities (excluding, in each case, agreements, licenses, permits and approvals relating to Patents, Technology and Trademarks) and otherwise contemplated to be assigned or transferred by the Transaction Documents is not capable of being assigned or transferred without the consent or waiver of the issuer thereof or the other party thereto or any third party, or if such assignment or transfer would constitute a breach thereof or a violation of any legal requirement, the Transaction Documents shall not constitute an assignment or transfer thereof or an attempted assignment or transfer thereof, unless and until such consent or waiver of such issuer or other party or parties has been duly obtained or such assignment or transfer has otherwise become lawful. (f) To the extent that any of the consents or waivers referred to in Section 8.1(e) hereof are not obtained by Henkel, or until the difficulties of transfer referred to therein are resolved, Henkel shall use its reasonable efforts to (i) provide or cause to be provided to the JV Entities the benefits of any permit, approval, contract or license referred to in Section 8.1(e) hereof, (ii) cooperate in any arrangement, reasonable and lawful as to Henkel designed to provide such benefits to the JV Entities, and (iii) enforce for the account and at the expense and direction of the JV Entities and Ecolab any rights of any of the JV Entities arising from any such licenses, permits, approvals and contracts against such issuer or the other party or parties referred to in Section 8.1(e) hereof, including, without limitation, the right to elect to terminate in accordance with the terms thereof on the advice of Ecolab. 8.2. Confidentiality and Announcements. (a) Henkel undertakes to Ecolab on behalf of itself and its Subsidiaries, that it shall keep confidential and shall not, without the prior written consent of Ecolab, disclose to any person, nor use or exploit commercially for its own purposes, any information relating to the Transaction Documents and the Amended and Restated Stockholder's Agreement or the customers, business or affairs of the JV Entities or of Ecolab or its respective Subsidiaries which it has, or which it may have received or in the future acquire, (i) as a result of the negotiating or entering into of the Transaction Documents and the Amended and Restated Stockholder's Agreement, (ii) through the holding of Ecolab Common Stock, or (iii) through the previous ownership or operation by it or one of its Subsidiaries of assets of the JV Entities, otherwise than as permitted or contemplated under said agreements; provided, however, that Henkel may disclose such information (A) to its Subsidiaries for any purposes reasonably incidental to the purposes of the Agreement, (B) to its advisors for use in connection with rendering advice with respect to the transactions contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement and (C) as is required to be disclosed by operation of law or any stock exchange regulations or any binding judgment or order, or by any requirement of any competent Governmental Entity. In performing its obligations under this Section 8.2(a), Henkel shall apply such standards of confidentiality as it applies generally in relation to its own confidential information. Henkel shall use all reasonable efforts to ensure that its employees and agents and those of its Subsidiaries observe such confidentiality. (b) Ecolab undertakes to Henkel on behalf of itself and its Subsidiaries, that it shall keep confidential and shall not, without the prior written consent of Henkel, disclose to any person, nor use or exploit commercially for its own purposes, any confidential and proprietary information of Henkel, except as contemplated by this Agreement or as permitted by the Transaction Documents. (c) Section 8.2(a) and (b) shall not apply to information: (i) acquired from a third party with the right to divulge the same; (ii) which, prior to the Closing, Ecolab and Henkel have jointly decided to disclose; or (iii) which is or becomes within the public domain (otherwise than through the fault of the recipient party). (d) No announcement in connection with the subject matter of the Transaction Documents and the Amended and Restated Stockholder's Agreement shall be made or issued by or on behalf of any of the parties hereto (or any of their Subsidiaries) prior to or upon the Closing without the prior written approval of both Ecolab and Henkel (such approval not to be unreasonably withheld or delayed), except as permitted by the Communications Plan or as may be required by law, by any stock exchange or by any Governmental Authority. 8.3. Structuring Plan. Attached hereto as Exhibit A is the Structuring Plan developed for the transactions contemplated by the Transaction Documents. The parties shall take the actions contemplated by the Structuring Plan prior to Closing. 8.4. Cooperation. Prior to the Closing, the parties shall cooperate to fulfill all conditions specified herein and to do all things necessary to consummate the transactions contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement. The parties shall make all joint filings as are required or agreed upon by the parties and shall make such individual filings as are required or appropriate, but only upon consultation with the other party and after giving reasonable consideration to such party's comments, if any. On and after the Closing Date, the parties will take all appropriate action and execute all documents, instruments or conveyances of any kind which may be reasonably necessary or advisable to carry out any of the provisions of the Transaction Documents and the Amended and Restated Stockholder's Agreement including, without limitation, putting Ecolab in possession and operating control of the JV Interest and the business of the JV Entities. 8.5. Tax Matters. (a) Henkel's Tax Indemnity. (i) Notwithstanding any other provisions of this Agreement (other than and subject to Section 8.5(b)(ii)), from and after the Closing Date, Henkel shall be liable to, and shall indemnify and hold harmless, Ecolab, each of the JV Entities, and their respective officers, directors and Affiliates (with such indemnification payment to be made to the individual or entity determined by Ecolab) against the following amounts: (A) 100% of any and all Taxes Imposed on Henkel or any Affiliate of Henkel (other than a JV Entity) in any period, whether or not incurred in connection with the transactions contemplated by this Agreement; (B) 50% of any and all Taxes Imposed on any JV Entity with respect to taxable years or periods ending on or before the Closing Date; (C) with respect to taxable years or periods beginning before the Closing Date and ending after the Closing Date (a "Straddle Period"), 50% of any and all Taxes Imposed on any JV Entity which is allocable, pursuant to Section 8.5(a)(ii), to the portion of such Straddle Period ending on the Closing Date (the "First Interim Period") (the First Interim Period and any taxable years or periods that end on or prior to the Closing Date being referred to collectively hereinafter as "Pre-Closing Periods"); and (D) 100% of any and all German trade income tax Imposed on Henkel Ecolab GmbH OHG & Co. (the "German Partnership") as a result of the capital gain realized by Henkel upon the sale of its partnership interest in the German Partnership. (ii) In any case where the Closing Date is not treated as the last day of the taxable year or period of a JV Entity with respect to Taxes that are payable in respect of the First Interim Period, the portion of any such Tax that is allocable to the First Interim Period shall be: (A) in the case of Taxes that are either (x) based upon or related to income or receipts, or (y) Imposed in connection with any sale or other transfer or assignment of property (real or personal, tangible or intangible), deemed equal to the amount which would be payable if the taxable year or period ended on the Closing Date (except that exemptions, allowances and deductions such as depreciation deductions calculated on an annual basis shall be prorated between the First Interim Period and the remainder of the Straddle Period and ignoring any Tax loss carryback from a subsequent period); and (B) in the case of Taxes not described in clause (A) above (such as Taxes on capital) that are Imposed on a period basis and measured by the level of any item, deemed to be the amount of such Taxes for the entire period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding period) multiplied by a fraction the numerator of which is the number of calendar days in the First Interim Period ending on the Closing Date and the denominator of which is the number of calendar days in the entire relevant period. (b) Ecolab's Tax Indemnity. Ecolab shall be liable for, and shall indemnify and hold Henkel harmless against: (i) any and all Taxes Imposed on any JV Entity relating or apportioned to any taxable year or portion thereof ending after the Closing Date (a "Post-Closing Period"), including Taxes for the Straddle Period not allocable to the First Interim Period; and (ii) all transfer, real estate transfer, recording, deed or stamp taxes resulting from the transfers described in the Structuring Plan. (c) Mutual Cooperation. As soon as practicable, but in any event within thirty (30) days after either Henkel's or Ecolab's request, Ecolab shall, or shall cause JV Entities to, deliver to Henkel or Henkel shall deliver to Ecolab, as the case may be, such information and other data relating to the Tax Returns and Taxes of Ecolab or any JV Entity and shall provide such other assistance as may reasonably be requested, to cause the completion and filing of all Tax Returns or to respond to audits by any taxing authorities with respect to any Tax Returns or taxable periods or to otherwise enable Henkel, Ecolab or the JV Entities to satisfy their accounting or Tax requirements. For a period of five (5) years from and after the Closing, Ecolab and Henkel shall, and shall cause their Affiliates to, maintain and make available to the other party, on such other party's reasonable request, copies of any and all information, books and records referred to in this Section 8.5(c). After such five-year period, Ecolab or the Henkel may dispose of such information, books and records, provided that prior to such disposition, Ecolab or Henkel shall give the other party the opportunity to take possession of such information, books and records. Henkel shall maintain, and provide to Ecolab on a timely basis, such records as are requested by Ecolab to comply with its obligations pursuant to Section 6038A of the Code. (d) Resolution of Disagreements between Ecolab and Henkel. Notwithstanding Article XV hereof, if Ecolab and Henkel disagree as to the amount of Taxes for which Ecolab and Henkel are liable under this Agreement, Ecolab and Henkel shall promptly consult with each other in an effort to resolve such dispute. If any such point of disagreement cannot be resolved within fifteen (15) days after the date of consultation, Ecolab and Henkel shall within ten (10) days after such 15-day period jointly engage an Auditor (as defined in Section 4.3) to act as an arbitrator to resolve all points of disagreement concerning tax accounting matters with respect to this Agreement. All fees and expenses relating to the work performed by any Auditor or arbitrator in accordance with this Section 8.5(d) shall be borne equally by Ecolab and Henkel, unless otherwise ordered by the Auditor or arbitrator. (e) Obligations Absolute. Notwithstanding any other provision of this Agreement, the covenants contained in Section 8.5 shall be unconditional and absolute and shall survive until the date that is ninety (90) days after the expiration of the applicable statute of limitations. 8.6. Regulatory Matters. (a) Henkel and Ecolab agree, from the date hereof and prior to Closing, to cause the JV Entities to prepare and make available a more detailed Schedule 9.2(c) with information broken down on a country-by-country basis and containing the input of additional JV Entity employees, in local jurisdictions and with applicable expertise, who were not, as of the date hereof, involved in the preparation of this Agreement. Without limiting the generality of the foregoing, such detailed Schedule 9.1(c) shall contain the following information: (i) the status and nature of each significant current, pending or lapsed product or equipment registration or approval including, identification of the agency, registration or approval identification number and the registered or approved use category; (ii) the name of the JV Entity in which such registration or approval is held (and, if held in Henkel's name, such registrations or approvals shall be transferred to Ecolab or a JV Entity, at Ecolab's option and at Ecolab's cost); (iii) a summary of the environmental, health, safety and other data which underlies or supports such registration and the owner and location of such data; (iv) a risk assessment regarding contemplated or pending legislative or regulatory proposals or scrutiny which might adversely impact product formulations or sales, such as restrictions on the use of certain ingredients like EDTA, NTA, chlorine, boric acids, surfactants, biocides and so forth; and identification of the specific product formulations and the sales which might be adversely impacted; (v) a list of the various industry consortia or other groups to which Henkel or the JV Entities belong regarding the foregoing matters, including a summary of the current activities; and (vi) a detailed list of the services, such as packaging certification, provided by Henkel to the JV Entities and the costs and other material terms and conditions therefor. (b) Following the Closing, Ecolab shall have continuing rights to copy, access, cite and otherwise use environmental, health, safety and other information or data owned or held by Henkel and needed to: (i) maintain or obtain existing, pending or future product and equipment registrations and approvals, supplemental registrations and approvals or registration and approval amendments; (ii) maintain or obtain customer relationships; or (iii) respond to governmental or regulatory or public interest inquiries. 8.7. Employee Matters. (a) The parties acknowledge that various amendments or changes to the Plans will need to be made (including, without limitation, the termination of some of the Plans) in connection with the transactions contemplated by this Agreement due to the provisions of such Plans or Applicable Laws, and that such amendments or changes could affect the employees of the JV Entities. Accordingly, the parties agree to cooperate as to the timing, nature, scope and terms of such amendments or changes so as to reduce the effect of such amendments or changes on the employees of the JV Entities. (b) The parties agree that (i) all assets directly or indirectly held by Henkel, an Affiliate of Henkel or an agent of Henkel to provide benefits to employees of the JV Entities will be transferred to Ecolab, Ecolab's Affiliates or the JV Entities, as Ecolab directs, and (ii) any assets that are held to provide benefits for both employees of Henkel or an Affiliate of Henkel, on the one hand, and employees of the JV Entities, on the other hand, will be (aa) divided pro-rata between Henkel or an Affiliate of Henkel (as the case may be) and the JV Entities in the same proportion as the Liability for such benefits is divided between them and (bb) transferred to Ecolab, Ecolab's Affiliates or the JV Entities, as Ecolab directs. (c) The parties also acknowledge that the Applicable Laws of various of the local jurisdictions contain requirements as to notification requirements relating to work councils associated with the JV Entities in such jurisdiction. The parties agree to comply with such requirements in accordance with such Applicable Laws and reasonably cooperate with each other as to the timing, delivery and content of such notifications in accordance with the terms of the Communications Plan. 8.8. Treasury Matters. Henkel and Ecolab agree, from the date hereof and prior to Closing, to cause the JV Entities to make available detailed information and documents concerning the treasury function and treasury matters of the JV Entities. Without limiting the generality of the foregoing, such information and documents shall include cash investments, short- and long-term financing arrangements, related party financings, transactional banking structure, derivative positions and investments of benefit plan assets. 8.9 Conduct of the Business of the JV Entities Pending Closing. (a) From the date hereof until the Closing, except as otherwise contemplated by this Agreement, the parties shall cause the JV Entities to conduct their business only in the ordinary course as conducted on the date hereof, and the parties shall use, and shall cause the JV Entities to use, their reasonable efforts (i) to preserve in all material respects their respective present business organizations, assets, operations, goodwill and relationships with third parties, (ii) to keep available the services of the present officers and employees except as may be otherwise agreed by Henkel and Ecolab, (iii) to confer and consult with each of the parties concerning operational matters of the JV Entities, and (iv) to otherwise report periodically to the parties as requested by the parties concerning the status of the business, operations, and finances of such JV Entities. (b) Without limiting the generality of the foregoing, from the date hereof until the Closing, except as otherwise contemplated by this Agreement, the parties shall: (i) cause each of the JV Entities to use all reasonable efforts to carry on its business and operations substantially in the manner carried on as of the date hereof, and will not permit the JV Entities to engage in any activity or transaction or make any commitment to purchase or spend money other than in the ordinary course of its business and in accordance with its year 2001 plan and budget; and (ii) not permit any JV Entity to materially increase any compensation, commission, bonus or employee benefit to any director, officer, employee or independent contractor as such. 8.10 Post-Signing Financial Statements. Henkel and Ecolab agree, from the date hereof until the Closing, to cause the JV Entities to prepare and make available to each of them the Post-Signing Audited Financial Statements, as well as interim financial statements, prepared for the same periods and in the same manner as is consistent with the past practice of the JV Entities, but in any case no less than quarterly. Such Financial Statements will be prepared from the books and records of the JV Entities and will present fairly, in all material respects, the financial position of the JV Entities as of the dates thereof and the results of their operations for the periods indicated in conformity with GAAP (subject, in the case of interim financial statements, to normal year-end adjustments and the absence of footnotes). 8.11 Dividend. The parties shall cause the JV Entities prior to the Closing Date to declare a dividend consistent with past practice with respect to the earnings of the JV Entities (taken as a whole) for the fiscal year ended November 30, 2001 and for the period after November 30, 2001 and ending on the Closing Date. 8.12 Venezuela. On prior to December 31st, 2000, Ecolab shall (or shall cause one of its Affiliates) to enter into a definitive agreement with Henkel Venezuela (or some other Henkel Affiliate that owns the shares in Ecolab S.A. (Venezuela)) to purchase, and Henkel Venezuela shall enter into a definitive agreement with Ecolab (or one of its Affiliates) to sell, all of the shares in Ecolab S.A. (Venezuela) owned by Henkel or its Affiliates for a total consideration of $ 3,000,000 (in U.S. dollars), payable in cash. The terms of the purchase shall include limited representations (with respect to ownership of the shares and due authorization for the transaction, etc., but no representation with respect to the condition of the business of Ecolab S.A. (Venezuela)), covenants and indemnification provisions. Subject to the receipt of any necessary consents or approvals from Governmental Entities and the receipt of any material consents from third parties, the parties shall close the transaction on or before the seventieth (70th) day of 2001. ARTICLE IX 9. COVENANTS OF HENKEL 9.1. Preservation of and Access to Books and Records. (a) Prior to the Closing, Henkel will, and will cause its Subsidiaries and the JV Entities to, permit Ecolab and its Subsidiaries, and their advisors and auditors, through their authorized representatives, reasonable access during normal business hours (at no charge, cost or expense to Henkel, its Subsidiaries or the JV Entities) to any and all of the properties, assets, books, records and other documents of each of the JV Entities as Ecolab may reasonably request, and Henkel will, and will cause its Subsidiaries and the JV Entities to, furnish to Ecolab such information and copies of such documents and records pertaining to the JV Entities as Ecolab shall reasonably request. (b) Henkel shall not, and shall cause its Subsidiaries not to, destroy any books or records (including, without limitation, correspondence, memoranda, books of account, legal books, environmental reports, tax reports and returns, manufacturing, production and technical service records and the like) which have not been transferred with the JV Entities in connection with the consummation of the transactions contemplated by the Transaction Documents but which can reasonably be deemed to relate to Henkel's or its Subsidiaries' operation of the business of the JV Entities (including, without limitation, records with respect to tax, pension, severance and litigation matters), and reasonably relating to events occurring prior to the Closing and to transactions or events occurring subsequent to the Closing which are related to or arise out of transactions or events occurring prior to the Closing Date. After the Closing Date and for so long as such books and records are required by law to be maintained, Henkel shall ensure that any such books and records are not disposed of or destroyed without giving Ecolab forty-five (45) days notice of the intention to dispose of such books and records, during which period Ecolab shall have the right to take possession of any such books and records. (c) So long as the books and records which are subject to this Section 9.1 are in the possession of Henkel or its Subsidiaries, Henkel shall permit, during normal business hours (at no charge, cost or expense to Henkel or its Subsidiaries), Ecolab and its Subsidiaries, as the case may be, and their auditors, through their authorized representatives, to have reasonable access to and examine and take copies of all such books and records. (d) Henkel shall direct its employees and those of its Subsidiaries to render any assistance which Ecolab and its Subsidiaries may reasonably request in examining or utilizing records referred to in this Section 9.1 including, without limitation, assistance related to the use of such records in the defense of any litigation related to the business of the JV Entities. 9.2 Disclosure Schedule. As of the date hereof, Henkel has caused the JV Entities to supply to Ecolab the following schedules (the "Disclosure Schedule"), a copy of which Ecolab acknowledges having received: (a) A description of all material real property of the JV Entities, including a description or identification of each location, the record title holder thereof and the buildings and other improvements thereon; (b) a list of (i) any actions, suits, inquiries, proceedings or investigations by or before any Governmental Entity pending or, to the best knowledge of Henkel, threatened against or involving any JV Entity related to the business of the JV Entities, or any product alleged to have been manufactured or sold by any JV Entity in connection with the business of the JV Entities and alleged to have been defective, or improperly designed or manufactured, in each case that is out of the ordinary course of business and seeks, or is reasonably likely to result in, damages in an amount in excess of $100,000, or which questions or challenges the validity of any of the Transaction Documents, the Amended and Restated Stockholder's Agreement or any action taken or to be taken by Henkel or any of its Subsidiaries pursuant to the Transaction Documents and the Amended and Restated Stockholder's Agreement or in connection with the transactions contemplated thereby and (ii) any circumstances which, to the knowledge of Henkel, would form a valid basis for any such action, suit, inquiry, proceeding or investigation; and (c) a list of all material permits, licenses, consents, approvals, registrations, memberships, authorizations and qualifications under all federal, state, local and foreign laws and regulations, and with all Governmental Entities, required for the conduct by the JV Entities of their businesses and the ownership or possession by them of their properties and assets. The parties acknowledge that the Disclosure Schedule does not, in and of itself, constitute a representation or warranty of Henkel and is not a representation or warranty except to the extent specifically referred to in Article VI of this Agreement. 9.3 Amendments to Disclosure Schedule. Not less than three (3) business days prior to the Closing Date, Henkel shall cause the JV Entities to provide to Ecolab amendments, if any, to the Disclosure Schedule delivered or to be delivered hereunder (the "Updated Disclosure Schedule"). Ecolab and Henkel hereby acknowledge that if the Closing occurs notwithstanding the delivery of an Updated Disclosure Schedule as contemplated above, Ecolab shall be entitled to indemnification to the extent provided by Article XIV for any new matters disclosed on the Updated Disclosure Schedule. 9.4 Resignation of Officers and Directors. Prior to or at the Closing, Henkel will cause each member of the Board of Directors (or similar governing body under local law) of each JV Entity appointed by Henkel to resign effective at the Closing. 9.5 Noncompetition. Henkel agrees that it will not, and shall ensure that its Affiliates do not, at any time during the period beginning on the Closing Date and ending on the fifth anniversary of the Closing Date, engage in or have any controlling interest in, directly or indirectly, whether alone or in conjunction with any Person, anywhere in Europe, Russia or Turkey, any business which is in competition with the JV Entities in the Cleaning and Sanitizing Field as conducted by the JV Entities at Closing (a "Competing Business"), provided, however, that Henkel and its Affiliates may continue to conduct their respective businesses generally in the manner in which such businesses are being conducted on the Closing Date. Henkel and its Affiliates shall not at any time, directly or indirectly, use or purport to authorize any person to use any Technology, Patent or Trademark or the "Henkel" name in contravention of this Section 9.5. The provisions of this Section 9.5 shall not prohibit Henkel and its Affiliates from acquiring not more than two percent (2%) of any class of securities of any company with a class of securities registered under the Securities Exchange Act of 1934, as amended, or otherwise publicly traded, provided Henkel and its Affiliates do not control such company. Further, the provisions of this Section 9.5 shall not prohibit Henkel and its Affiliates from acquiring a Competing Business in Europe, Russia and Turkey if and only if (a) Henkel or its Affiliate ceases to engage in such Competing Business within two hundred seventy (270) days after the consummation of such transaction and (b) Henkel shall have promptly first offered Ecolab, upon customary commercial terms, the exclusive opportunity, for a sixty (60) day period, to purchase such Competing Business at the same price at which Henkel acquired such Competing Business. The foregoing provisions of this Section 9.5, but not any claim previously brought thereunder, shall cease to apply on the fifth anniversary of the Closing Date. 9.6 General. Henkel shall not and shall cause its Subsidiaries not to take any action not contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement which would cause the representations or warranties made by Henkel in the Transaction Documents or the Amended and Restated Stockholder's Agreement not to be true and accurate as of the Closing. ARTICLE X 10. COVENANTS OF ECOLAB Ecolab covenants and agrees with Henkel as follows: 10.1. Books and Records. For a reasonable period of time after the Closing Date (which for any tax-related matters shall mean at least seven (7) years after the Closing Date), Ecolab will allow Henkel and its agents reasonable access to the relevant portions of the JV Entities' books and records for legitimate business reasons, such as the preparation of Tax Returns or the defense of litigation. Copies of such books and records may be made in accordance with this Section 10.1, at the cost of Henkel. Henkel will not use and will hold in confidence all confidential information identified as such by, and obtained from, Ecolab and any of its officers, agents, representatives or employees; provided, however, that information which (a) was in the public domain, (b) was in fact known to Henkel prior to disclosure by Ecolab, its officers, agents, representatives or employees, or (c) becomes known to Henkel from or through a third party who has the legal right to disclose such information, shall not be deemed to be confidential information. 10.2 General. Ecolab shall not and shall cause its Subsidiaries not to take any action not contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement which would cause the representations or warranties made by Ecolab in the Transaction Documents or the Amended and Restated Stockholder's Agreement not to be true and accurate as of the Closing. ARTICLE XI 11. CONDITIONS TO HENKEL'S OBLIGATION Each and every obligation of Henkel under the Transaction Documents to be performed on or before the Closing shall be subject to the satisfaction of each of the following conditions, unless waived in writing by Henkel: 11.1. Representations and Warranties True. The representations and warranties of Ecolab contained in this Agreement and in all certificates and other documents delivered and to be delivered by Ecolab pursuant hereto or in connection with the transactions contemplated hereby shall be true and accurate as of the date when made and at and as of the Closing Date as though such representations and warranties were made at and as of such date, and the representations and warranties of Ecolab contained in the other Transaction Documents and the Amended and Restated Stockholder's Agreement and in all certificates and other documents delivered and to be delivered by Ecolab pursuant thereto or in connection with the transactions contemplated thereby shall be true and accurate as of the Closing Date, except (a) for changes expressly permitted or contemplated by the terms of the Transaction Documents and the Amended and Restated Stockholder's Agreement and (b) to the extent that any representation or warranty is made as of a specified date, in which case such representation or warranty shall be true as of such specified date, disregarding for purposes of this Section 11.1, the phrases "material", "materially", "in all material respects", "Material Adverse Effect" and any similar phrase, except for such failures to be true and accurate which in the aggregate do not constitute a Material Adverse Effect on Ecolab and its Subsidiaries, taken as a whole. 11.2. Performance. Ecolab shall have performed and complied in all material respects with all agreements, covenants, obligations and conditions required by this Agreement to be performed or complied with by it on or prior to the Closing. 11.3. Deliveries. Ecolab shall have delivered to Henkel all of the items required to be delivered by Ecolab pursuant to Section 5.3 hereof. 11.4. Consents Obtained. Any and all consents, waivers, permits and approvals from any Governmental Entity or any other Person required in connection with the execution, delivery and performance of the Transaction Documents and the Amended and Restated Stockholder's Agreement (including, without limitation, expiration or termination of the waiting period applicable to the consummation of the sale of the JV Interests under applicable Antitrust Laws) shall have been duly obtained and shall be in full force and effect on the Closing Date, except for any such consents, waivers, permits or approvals as would not, individually or in the aggregate, have a Material Adverse Effect on Henkel and its Subsidiaries, taken as a whole, or materially diminish the benefits intended to be afforded to Henkel under any of the Transaction Documents or the Amended and Restated Stockholder's Agreement. The New York Stock Exchange shall have approved (or have previously approved, with respect to shares issued from treasury) the listing of the Ecolab Common Stock to be acquired by Henkel pursuant to this Agreement, subject to official notice of issuance. 11.5. No Government Proceeding or Litigation. No suit, action, investigation, inquiry or other proceeding by any Governmental Entity shall be pending or threatened as of the Closing Date which questions the validity or legality of the transactions contemplated under the Transaction Documents and the Amended and Restated Stockholder's Agreement. 11.6. No Injunction. On the Closing Date, there shall be no effective injunction, writ, preliminary restraining order or any order of any nature issued by an agency or a court of competent jurisdiction directing that the transactions contemplated in any of the Transaction Documents and the Amended and Restated Stockholder's Agreement not be consummated as provided therein or imposing any materially adverse conditions on the consummation of the transactions contemplated under the Transaction Documents and the Amended and Restated Stockholder's Agreement. 11.7. Material Adverse Effect. There shall not have occurred, since the date of this Agreement, any event, change or circumstance constituting a Material Adverse Effect on Ecolab and its Subsidiaries, taken as a whole. ARTICLE XII 12. CONDITIONS TO ECOLAB'S OBLIGATION Each and every obligation of Ecolab under the Transaction Documents to be performed on or before the Closing shall be subject to the satisfaction of each of the following conditions, unless waived in writing by Ecolab: 12.1. Representations and Warranties True. The representations and warranties of Henkel contained in this Agreement, and in all certificates and other documents delivered and to be delivered by Henkel pursuant hereto or in connection with the transactions contemplated hereby shall be true and accurate as of the date when made and at and as of the Closing Date as though such representations and warranties were made at and as of such date, and the representations and warranties of Henkel contained in the other Transaction Documents and the Amended and Restated Stockholder's Agreement and in all certificates and other documents delivered and to be delivered by Henkel pursuant thereto or in connection with the transactions contemplated thereby shall be true and accurate as of the Closing Date, except (a) for changes expressly permitted or contemplated by the terms of the Transaction Documents and the Amended and Restated Stockholder's Agreement and (b) to the extent that any representation or warranty is made herein as of a specified date, in which case such representation or warranty shall be true as of such specified date, disregarding for purposes of this Section 12.1, the phases "material", "materially", "in all material respects", "Material Adverse Effect" and any similar phrase, except for such failures to be true and accurate which in the aggregate do not constitute a Material Adverse Effect on Henkel and its Subsidiaries, taken as a whole. 12.2. Performance. Henkel shall have performed and complied in all material respects with all agreements, covenants, obligations and conditions required by this Agreement to be performed or complied with by it on or prior to the Closing. 12.3. Deliveries. Henkel shall have delivered to Ecolab all of the items required to be delivered by Henkel pursuant to Section 5.2 hereof. 12.4. Consents Obtained. Any and all consents, waivers, permits and approvals from any Governmental Entity or any other Person required in connection with the execution, delivery and performance of the Transaction Documents and the Amended and Restated Stockholder's Agreement (including, without limitation, expiration or termination of the waiting period applicable to the consummation of the sale of the JV Interests under applicable Antitrust Laws) shall have been duly obtained and shall be in full force and effect on the Closing Date, except for such consents, waivers, permits and approvals as would not, individually or in the aggregate, have a Material Adverse Effect on Ecolab and its Subsidiaries, taken as a whole, or the JV Entities, taken as a whole, or materially diminish the benefits intended to be afforded to Ecolab under any of the Transaction Documents or the Amended and Restated Stockholder's Agreement. The New York Stock Exchange shall have approved (or have previously approved, with respect to shares issued from treasury) the listing of the Ecolab Common Stock to be acquired by Henkel pursuant to this Agreement, subject to official notice of issuance. 12.5. No Government Proceeding or Litigation. No suit, action, investigation, inquiry or other proceeding by any Governmental Entity shall be pending or threatened as of the Closing Date which questions the validity or legality of the transactions contemplated under the Transaction Documents and the Amended and Restated Stockholder's Agreement. 12.6. No Injunction. On the Closing Date, there shall be no effective injunction, writ, preliminary restraining order or any order of any nature issued by an agency or a court of competent jurisdiction directing that the transactions contemplated in any of the Transaction Documents and the Amended and Restated Stockholder's Agreement not be consummated as provided therein or imposing any materially adverse conditions on the consummation of the transactions contemplated under the Transaction Documents and the Amended and Restated Stockholder's Agreement. 12.7. Updated Disclosure Schedule. The Updated Disclosure Schedule, if delivered by Henkel, shall be acceptable to Ecolab in its sole and absolute judgment. 12.8. No Material Adverse Effect. There shall not have occurred, since the date of this Agreement, any event, change or circumstance constituting a Material Adverse Effect on the JV Entities, taken as a whole. ARTICLE XIII 13. TERMINATION 13.1. Termination Prior to Closing. Anything herein to the contrary notwithstanding, this Agreement may be terminated at any time before the Closing Date as follows: (a) by mutual consent of Ecolab and Henkel; or (b) by Ecolab if the Closing Date has not occurred on or prior to the two-year anniversary of the date hereof, unless the failure of the Closing Date to occur on or before such date has been caused by, or is the result of, the failure of Ecolab to fulfill any of its obligations under the Agreement; or (c) by Henkel if the Closing Date has not occurred on or prior to the two-year anniversary of the date hereof, unless the failure of the Closing Date to occur on or before such date has been caused by, or is the result of, the failure of Henkel to fulfill any of its obligations under the Agreement; or (d) by either Ecolab or Henkel, as the case may be, in the event that the other party hereto shall, contrary to the terms of this Agreement, willfully fail or willfully refuse to consummate the transactions contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement or to take any other action referred to in the Transaction Documents and the Amended and Restated Stockholder's Agreement necessary to consummate the transactions contemplated by the Transaction Documents and the Amended and Restated Stockholder's Agreement, after affording the defaulting party a ten (10) day period after notice in which to cure such willful breach or willful default; or (e) by Henkel if there shall have been a reduction in the cumulative Earnings Per Share for Ecolab with respect to the three fiscal quarters ended March 31, 2001, June 30, 2001 and September 30, 2001 to an amount of fifty percent (50 %) or less than the cumulative Earnings Per Share for Ecolab with respect to the three fiscal quarters ended March 31, 2000, June 30, 2000 and September 30, 2000. "Earnings Per Share" for Ecolab shall mean earnings per share on a fully diluted basis as reported by Ecolab in its Quarterly Report on Form 10-Q filed with the SEC for the relevant quarter. 13.2. Effect of Termination. (a) In the event this Agreement is terminated pursuant to Section 13.1(d) hereof, the non-defaulting party shall have the right to seek payment of damages incurred by such non-defaulting party prior to such termination. (b) Except as set forth in Section 13.2(a) hereof, any termination of this Agreement in accordance with the terms hereof by either party shall have the effect of causing the Agreement to thereupon become void and of no further force or effect whatsoever (and the Umbrella Agreement, the existing Stockholder's Agreement in effect as of the date hereof between the parties, and the Joint Venture Agreement shall continue in full force and effect), and thereupon neither party will have any rights, duties, liabilities or obligations of any kind or nature whatsoever against the other party based upon either the Agreement or the transactions contemplated thereby, except the obligations of each party under Section 8.2 hereof, which shall survive any such termination. ARTICLE XIV 14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION 14.1. Survival. The respective representations and warranties of Ecolab and Henkel contained in the Transaction Documents or in any certificates or other documents delivered prior to or at the Closing shall survive for a period of eighteen (18) months after the Closing (or such longer period as is provided therein); provided, however, that (a) each such representation and warranty and the liability of any party with respect thereto, shall not terminate with respect to any claim, whether or not fixed as to Liability or liquidated as to amount, with respect to which such party has been given written notice by the other party prior to the date specified above for the termination thereof and (b) the representations and warranties contained in Sections 6.2, 6.4 and 7.2 hereof shall survive for a period of twenty (20) years after the Closing Date. 14.2. Henkel Indemnification of Ecolab. Subject to the conditions and provisions set forth herein, Henkel shall indemnify, defend and hold harmless Ecolab and its Affiliates from and against any and all claims and/or Damages which may be asserted against or suffered by Ecolab or any of its Affiliates as a result or on account of any breach of any representation, warranty or covenant on the part of Henkel made in the Transaction Documents or any other instrument or document delivered by Henkel pursuant thereto. 14.3. Limitation on Henkel's Indemnification Obligation. Except as provided in Section 8.5(b), the obligations of Henkel pursuant to Section 14.2 hereof shall be limited as follows: (a) with respect to claims and/or Damages that relate to the JV Entities, Henkel shall indemnify Ecolab and its Affiliates in an amount equal to 50% of such claims and/or Damages in the aggregate and (b) with respect to claims and/or Damages suffered directly by Ecolab or any Ecolab Entity, Henkel shall indemnify Ecolab and its Affiliates in an amount equal to 100% of such claims and/or Damages in the aggregate. 14.4. Ecolab Indemnification of Henkel. Subject to the conditions and provisions set forth herein, Ecolab shall indemnify, defend and hold harmless Henkel and its Affiliates (other than, after the Closing, the JV Entities) from and against any and all claims and/or Damages which may be asserted against or suffered by Henkel or any of its Affiliates (other than, after the Closing, the JV Entities) as a result or on account of any breach of any representation, warranty or covenant , on the part of Ecolab made in the Transaction Documents or any other instrument or document delivered by Ecolab pursuant thereto. 14.5. Method of Asserting Claims, etc. All claims by an Indemnified Party under this Article XIV shall be asserted and resolved as follows: (a) In the event that (i) any claim or demand for which an Indemnifying Party would be liable to an Indemnified Party hereunder is asserted against or sought to be collected from such Indemnified Party by a third party (such claim or demand, a "Third Party Claim") or (ii) any Indemnified Party hereunder should have a claim or demand against any Indemnifying Party hereunder which does not involve a claim or demand being asserted against or sought to be collected from it by a third party (such claim or demand, a "Direct Claim"), the Indemnified Party shall with reasonable promptness notify in writing the Indemnifying Party of such claim or demand, specifying the nature of and the specific basis for such claim or demand and the amount or the estimated amount thereof to the extent then feasible to determine (which estimate shall not be conclusive of the final amount of such claim or demand) (a "Claim Notice"); provided, however, that any failure to give such notice will not result in a waiver of any rights of the Indemnified Party except to the extent the rights of the Indemnifying Party are actually prejudiced. (b) In the event of a Third Party Claim, the Indemnifying Party may, and upon request of the Indemnified Party shall, retain counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party and any other persons the Indemnifying Party may designate in connection with such claim or demand and shall pay the fees and disbursements of such counsel with regard thereto. In the event an Indemnifying Party shall retain such counsel, an Indemnified Party shall have the right to retain its own counsel, but the fees and disbursements of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and such Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between such Indemnified Party and any other party represented by such counsel in such proceeding. It is understood that the Indemnifying Party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and disbursements of more than one separate firm qualified in such jurisdiction to act as counsel for the Indemnified Party. No Indemnifying Party shall be liable to an Indemnified Party for any settlement of any action or claim without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld. (c) in the event of a Direct Claim, if the Indemnifying Party does not notify the Indemnified Party within sixty (60) days of receipt of a Claim Notice that it disputes such claim, the amount of such claim shall be conclusively deemed a liability of the Indemnifying Party hereunder and shall be paid to the Indemnified Party immediately. (d) Anything in this Section 14.5 to the contrary notwithstanding, (i) if there is a reasonable probability that a Third Party Claim may materially and adversely affect an Indemnified Party, the Indemnified Party shall have the right to defend, compromise or settle such claim, and (ii) the Indemnifying Party shall not, without the Indemnified Party's written consent, settle or compromise any claim or consent to entry of any judgment which does not include as an unconditional term thereof the release by the claimant or the plaintiff of the Indemnified Party and its Subsidiaries from all liability in respect of such claim. 14.6. Remedies Cumulative. The remedies provided herein shall be cumulative and shall not preclude an Indemnified Party from asserting any other rights or seeking any other remedies against the Indemnifying Party or its successors or assigns. 14.7. Purchase Price Adjustment; Net After-Tax Basis (a) Henkel and Ecolab each agrees to treat any indemnification payment made pursuant to this Agreement as a reduction or increase (as the case may be) of the Purchase Price, unless such party receives a written opinion from an internationally recognized law firm (which law firm and opinion shall be reasonably acceptable to the other party) to the effect that there is no reasonable basis for taking such position (b) The amount of any indemnification payable under this Agreement shall be calculated on an net after-Tax basis, taking into account any (i) net Tax benefit realized by the Indemnified Party from the deductions or other benefits available with respect to any amounts associated with a claim for which an indemnification payment is received or (ii) net Tax detriment realized by the Indemnified Party from the receipt of any indemnification payment. ARTICLE XV 15. SETTLEMENT OF DISPUTES 15.1. Informal Dispute Resolution. The parties acknowledge that, due to the complex and long-term nature of the transactions contemplated by the Transaction Documents, the Transaction Documents may not expressly provide for every contingency in respect of their business relationship. Accordingly, if there shall be any dispute, controversy or claim (a "Dispute") between Ecolab and Henkel arising out of, relating to, or connected with any of the Transaction Documents, the breach, termination or invalidity thereof, or the provisions contained therein or omitted therefrom the parties shall use their reasonable efforts to resolve the matter on an amicable basis and in a manner fair and equitable to the parties hereto. 15.2. Arbitration. If one party notifies the other party that a Dispute has arisen and the parties are unable to resolve such Dispute within a period of thirty (30) days from such notice, the Dispute may be referred by Ecolab or Henkel (the "Claimant") to arbitration by three (3) arbitrators pursuant to the Rules of Conciliation and Arbitration of the International Chamber of Commerce ("I.C.C.") then in force in accordance with the provisions of this Article XV. Once the informal dispute resolution process described in Section 15.1 hereof is completed, arbitration under this Article XV shall be the exclusive means for a party to seek resolution of any dispute arising out of, relating to or connected with any of the Transaction Documents except that either party may bring an action before a competent court in Geneva, Switzerland for the adoption of provisional or protective measures. 15.3. Commencement of Arbitration and Selection of Arbitrators. The Claimant shall file a request for arbitration with the I.C.C. and notify the other party (the "Respondent") in writing of the nature of the claim(s) and of the name of the Claimant's designated arbitrator. Within thirty (30) days of receipt of such notification, the Respondent shall notify the Claimant of the name of the Respondent's arbitrator. The two arbitrators thus designated shall designate a third arbitrator who shall not be a national of Germany or the United States of America within sixty (60) days of designation of the second arbitrator. If the Respondent fails to designate an arbitrator within the prescribed thirty (30) day period, or if the two designated arbitrators fail to designate the third arbitrator within the prescribed sixty (60) day period, the I.C.C. Court of Arbitration shall make such designations upon request of either party. Following the selection of arbitrators as set forth above, the arbitration shall be conducted promptly and expeditiously so as to enable the arbitrators to render a decision within ninety (90) days after the three arbitrators have been appointed. 15.4. Conflicts with I.C.C. Rules; Seat and Language of Arbitration. If there is any conflict between the Rules of Conciliation and Arbitration of the I.C.C. and this Article XV, this Article XV shall govern. The seat of arbitration shall be in Geneva, Switzerland. The arbitration shall be conducted in the English language. 15.5. Basis for Arbitration Decisions and Governing Law. In arriving at their decision(s), the arbitrators shall apply the terms and conditions of the Transaction Documents in accordance with the laws of Switzerland and where appropriate the international usage of the trade applicable to transactions of the kind covered by said agreements. The parties acknowledge that the arbitrators shall have the authority to grant equitable remedies, if appropriate. 15.6. Finality of Arbitral Award; Arbitration Expenses. The award of the arbitrators shall be final and binding on the parties hereto. Reasonable expenses of the arbitration shall be paid as the arbitrators determine. 15.7. Consolidation of Claims. All claims which Ecolab and Henkel have under the Transaction Documents shall be consolidated and submitted to arbitration in the same proceeding on the demand of either party hereto, if the arbitrators agree that such consolidation is feasible. Ecolab and Henkel shall designate the same arbitrators previously designated for all claims raised during the period such arbitrators remain empanelled to resolve claims of the parties hereto. 15.8. Judgment on the Arbitral Award. Judgment on the arbitral award rendered may be entered in any court having jurisdiction or application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be. 15.9 Specific Performance. The parties agree that, in addition to any other remedies, each shall be entitled to enforce the terms of this Agreement as provided in this Article XV by a decree of specific performance without the necessity of proving the inadequacy of money as a remedy. ARTICLE XVI 16. MISCELLANEOUS 16.1. Amendments. This Agreement may be amended, modified or superseded, and any of the terms, covenants or conditions hereof may be waived, only by a written instrument executed by Ecolab and Henkel, or, in the case of a waiver, by the party waiving compliance. 16.2. Waivers. The failure at any time of either party to require performance by the other party of any responsibility or obligation provided for in this Agreement shall in no way affect the full right to require such performance at any time thereafter, nor shall the waiver by either party of a breach of any provision of this Agreement by the other party constitute a waiver of any succeeding breach of the same or any other provision nor constitute a waiver of the responsibility or obligation itself. No investigation conducted or notice or knowledge obtained by or on behalf of any party hereto, whether prior or subsequent to the date hereof, shall affect the representations and warranties contained in this Agreement, or in the schedules or certificates delivered pursuant hereto, or the rights of any party hereto with respect to such representations and warranties or otherwise under this Agreement. 16.3. Assignability. Neither this Agreement nor any right or obligation hereunder may be assigned or delegated in whole or in part by either party without the prior written consent of the other party, and any such attempted assignment or delegation without such consent shall be null, void ab initio and without effect. Any permitted assignment of this Agreement shall be binding upon and inure to the benefit of the parties thereto and their respective successors and permitted assigns. 16.4. Severability. The provisions of this Agreement (including, without limitation, Section 9.5 hereof) shall be deemed severable and, to the fullest extent permitted by Applicable Law, the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provisions of this Agreement (including, without limitation, Section 9.5 hereof), or the application thereof to any person or circumstance, is invalid or unenforceable, then, to the fullest extent permitted by Applicable Law, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision; and (b) the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected by such invalidity or unenforceability nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction. 16.5. Notices. All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given if delivered by hand, or sent by courier or facsimile transmission (provided that, in the case of facsimile transmission, a confirmation copy of the notice shall be retained by the sender thereof) as follows (until notice of a change thereof is given as provided in this Section 16.5): (a) If to Henkel, to: Henkel KGaA Henkelstra(beta)e 67, Postfach 1100 D-4000 Dusseldorf 1, Germany Attention: General Counsel Telecopier: (0211) 798-6660 with a copy to: Cleary, Gottlieb, Steen & Hamilton One Liberty Plaza New York, New York 10006 Attention: William A. Groll Telecopier: (212) 225-3999 (b) If to Ecolab, to: Ecolab Inc. 370 Wabasha Street North St. Paul, Minnesota 55102 Attention: General Counsel Telecopier: (612) 293-2573 with a copy to: Skadden, Arps, Slate, Meagher & Flom (Illinois) 333 West Wacker Drive Chicago, Illinois 60606 Attention: Charles W. Mulaney, Jr. Telecopier: (312) 407-0411 All notices given in accordance with this Section 16.5 are effective, if delivered by hand or mailed by courier, at the time of delivery, and, if communicated by telex or facsimile, at the time of transmission. 16.6. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of Switzerland and where appropriate the international usage of the trade applicable to transactions of this kind, except as and to the extent required by local law in the jurisdictions in which assets of the JV Entities are located for the consummation of the transactions contemplated by the Transaction Documents. 16.7. Assurance of Further Action. Subject to the terms and conditions of this Agreement, from time to time prior to or after the Closing, each of the parties hereto agrees to use reasonable efforts to take or cause to be taken all action, to do or cause to be done, and to assist and cooperate with the other party hereto in doing, all things necessary, proper or advisable under Applicable Laws to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by the Transaction Documents including, without limitation, (a) the satisfaction of the conditions precedent to the obligations of any of the parties hereto; (b) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the performance of the obligations hereunder or thereunder; and (c) the execution and delivery of such instruments, and the taking of such other actions as the other party hereto may reasonably require in order to carry out the intent of this Agreement. 16.8. Costs. Each party hereto shall bear and pay its own costs, charges and expenses incurred in the preparation, negotiation and implementation of this Agreement, including without limitation the cost of its attorneys, accountants, consultants, brokers, investment bankers or other advisors it retained. Ecolab shall bear and pay any filing fees and any transfer, real estate transfer, recording, and deed or stamp taxes resulting from the transfers described in the Structuring Plan. 16.9. Entire Agreement. This Agreement, including the exhibits, annexes and schedules hereto and the other documents and certificates delivered pursuant to the terms hereof, constitute one single agreement and set forth the entire agreement and understanding of the parties hereto in respect of the subject matter thereof, and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party thereto, in respect of the subject matter thereof. For purposes of clarity, it is understood that the Amended and Restated Stockholder's Agreement dated June 21, 1991 between Ecolab and Henkel shall continue in full force and effect pending the occurrence of the Closing. 16.10. Headings; References to Sections, Exhibits and Schedules. The headings of the Sections and subsections of this Agreement are solely for convenience and reference and shall not limit or otherwise affect the meaning of any of the terms or provisions of this Agreement. The references herein to Sections, exhibits and schedules, unless otherwise indicated, are references to sections of and exhibits and schedules to this Agreement. 16.11. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but which together constitute one and the same instrument. 16.12. Third Parties. Except as specifically set forth or referred to in this Agreement, nothing expressed or implied herein is intended or shall be construed to confer upon or give any person or entity other than the parties hereto and their successors and assigns any rights or remedies under or by reason of this Agreement. IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written. HENKEL KOMMANDITGESELLSCHAFT AUF AKTIEN By: ------------------------- Its: ------------------------ ECOLAB INC. By: ------------------------- Its: ------------------------ SCHEDULES / EXHIBITS -------------------- SCHEDULES 1.1 JV Entities 1.2 Henkel Entities 6.3 Change in Control Agreements 9.2 Disclosure Schedule 9.3 Updated Disclosure Schedule EXHIBITS A Structuring Plan B Amended and Restated Stockholder's Agreement C Communications Plan D Environmental Agreement E Intellectual Property Plan F Toll Manufacturing and Supply Arrangements G Services Arrangements EX-19 4 0004.txt SECOND AMENDED AND RESTATED STOCKHOLDER'S AGREEMENT SECOND AMENDED AND RESTATED STOCKHOLDER'S AGREEMENT (the "Agreement"), dated as of [ ], between Ecolab Inc., a Delaware corporation (the "Company"), and Henkel Kommanditgesellschaft auf Aktien, organized under the laws of the Federal Republic of Germany (the "Stockholder"). WHEREAS, the Stockholder and the Company entered into the Amended and Restated Stockholder's Agreement, dated as of June 26, 1991 (the "Original Stockholder's Agreement"), in connection with the combination of their European and certain other cleaning and sanitizing businesses in a joint venture (the "Joint Venture"); WHEREAS, the Company and the Stockholder have entered into the Master Agreement, dated as of [ ], 2000 (the "Master Agreement" and, together with certain other agreements contemplated thereby, the "Transaction Agreements"), relating to a transaction involving the Company's and the Stockholder's interests in the Joint Venture (the "Transaction"); and WHEREAS, in connection with the consummation of the Transaction, the Company and the Stockholder desire to amend and restate in its entirety the Original Stockholder's Agreement as set forth herein. NOW, THEREFORE, in consideration of the mutual agreements contained herein and in the Transaction Agreements and intending to be legally bound hereby, the parties hereto agree as follows: 1. Section The Company's Representations and Warranties. The Company represents and warrants to the Stockholder as follows: (a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware; (b) The Company has the full power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated hereby, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement; (c) This Agreement has been duly and validly authorized, executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except to the extent that (i) such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting creditors' rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to certain equitable defenses and to the discretion of the court before which any proceedings therefor may be brought; and (d) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not conflict with, result in the breach of any of the terms or conditions of, constitute a default under or violate, accelerate or permit the acceleration of any other similar right of any other party under, the Restated Certificate of Incorporation or By-Laws of the Company, any law, rule or regulation or any agreement, lease, mortgage, note, bond, indenture, license or other document or undertaking, to which the Company is a party or by which the Company or its properties may be bound, nor will such execution, delivery and consummation violate any order, writ, injunction or decree of any federal, state, local or foreign court, administrative agency or governmental or regulatory authority or body (each, an "Authority") to which the Company or any of its properties is subject, the effect of any of which, either individually or in the aggregate, would impair the ability of the Company to perform its obligations hereunder. 2. Section The Stockholder's Representations and Warranties. The Stockholder represents and warrants to the Company as follows: (a) The Stockholder is a Kommanditgesellschaft auf Aktien validly existing under the laws of the Federal Republic of Germany; (b) The Stockholder has the full power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated hereby, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement; (c) This Agreement has been duly and validly authorized, executed and delivered by the Stockholder, and constitutes a legal, valid and binding agreement of the Stockholder, enforceable against the Stockholder in accordance with its terms, except to the extent that (i) such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting creditors' rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to certain equitable defenses and to the discretion of the court before which any proceedings therefor may be brought; (d) Except for ____ [insert number that includes shares of Common Stock received upon closing of the Master Agreement] shares of the Company's common stock, par value $1.00 per share (the "Common Stock"), and the associated rights to purchase shares of the Company's Series A Junior Participating Preferred Stock under the Company's Stockholder Rights Plan (the "Rights Plan"), beneficially owned as of the date hereof and the right to acquire additional shares pursuant to the terms of this Agreement and the Rights Plan (the Common Stock beneficially owned by the Stockholder, together with any equity securities of the Company acquired by the Stockholder during the Agreement Period (as hereinafter defined), are sometimes collectively referred to herein as the "Shares"), neither the Stockholder nor any of its Affiliates (for the purposes of this Agreement, the term "Affiliates" shall be defined as such term is defined on the date hereof under the rules and regulations promulgated by the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), provided that for purposes of this Agreement the Company and the Stockholder shall not be deemed to be Affiliates of each other), (i) beneficially owns any equity securities of the Company entitled to vote at any meeting of stockholders of the Company ("Voting Securities" which, for purposes of this Agreement, shall be deemed to be outstanding only if actually entitled to vote at the time the calculation of outstanding Voting Securities is to be made) or (ii) possesses any rights to acquire any Voting Securities; (e) The Stockholder is an "accredited investor" within the meaning of Regulation D under the Securities Act, and it is acquiring the Shares for its own account and not with a view to the public distribution thereof; and (f) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not conflict with, result in the breach of any of the terms or conditions of, constitute a default under or violate, accelerate or permit the acceleration of any other similar right of any other party under, the charter or by-laws of the Stockholder, any law, rule or regulation, or any agreement, lease, mortgage, note, bond, indenture, license or other document or undertaking, to which the Stockholder is a party or by which the Stockholder or its properties may be bound, nor will such execution, delivery and consummation violate any order, writ, injunction or decree of any Authority to which the Stockholder or any of its properties is subject , the effect of any of which, either individually or in the aggregate, would impair the ability of the Stockholder to perform its obligations hereunder. 3. Section Covenants and Agreements of the Stockholder. (a) During the Agreement Period (as defined below), except (i) by way of stock dividend, stock split, reorganization, recapitalization, merger, consolidation or other like distributions made available to holders of Common Stock generally or (ii) as specifically permitted by the terms of this Agreement or the Rights Plan, the Stockholder will not, and will cause each of its Affiliates not to, acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, or exercise any attribute of beneficial ownership (as defined on the date hereof in Rule 13d-3 of the Commission under Section 13(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act")) with respect to, any equity securities of the Company, or direct or indirect rights or options to acquire (through purchase, exchange, conversion or otherwise) any equity securities of the Company. The term "Agreement Period" means the period beginning on the date hereof and ending on the date that the Stockholder and its Affiliates beneficially own less than 2% of the outstanding Voting Securities. (b) During the Agreement Period, except (i) upon the prior written invitation of the Company and (ii) as otherwise specifically permitted by this Agreement, the Stockholder will not, directly or indirectly, through one or more intermediaries or otherwise, and will cause each of its Affiliates not to, singly or as part of a partnership, limited partnership, syndicate or other group (as those terms are used within the meaning of Section 13(d)(3) of the 1934 Act, which meanings shall apply for all purposes of this Agreement): (i) make, or in any way participate in, any "solicitation" of "proxies" (as such terms are defined or used in Regulation 14A under the 1934 Act) with respect to any Voting Securities (including by the execution of actions by written consent), become a "participant" in any "election contest" (as such terms are defined or used in Rule 14a-11 under the 1934 Act) with respect to the Company or seek to advise, encourage or influence any person or entity with respect to the voting of any Voting Securities; provided, however, that the Stockholder shall not be prevented hereunder from being a "participant" in support of the management of the Company, by reason of the membership of the Stockholder's designees on the Company's Board of Directors or the inclusion of the Stockholder's designees on the slate of nominees for election to the Board of Directors proposed by the Company; (ii) initiate, propose or otherwise solicit, or participate in the solicitation of, stockholders for the approval of one or more stockholder proposals with respect to the Company as described in Rule 14a-8 under the 1934 Act or knowingly induce any other individual or entity to initiate any stockholder proposal relating to the Company; (iii) form, join or in any way participate in a "group," act in concert with any other person or entity or otherwise take any action or actions which would cause it to be deemed a "person" (for purposes of Section 13(d) of the 1934 Act) (other than to the extent it is a "person" at the time of consummation of the transactions contemplated by the Transaction Agreements and this Agreement), with respect to any equity securities of the Company; (iv) participate in or encourage the formation of any group which owns or seeks or offers to acquire beneficial ownership of securities of the Company or rights to acquire such securities or which seeks or offers to affect control of the Company or for the purpose of circumventing any provision of this Agreement; (v) solicit, seek or offer to effect, negotiate with or provide any information to any party with respect to, make any statement or proposal, whether written or oral, either alone or in concert with others, to the Board of Directors of the Company, to any director or officer of the Company or to any other stockholder of the Company with respect to, or otherwise formulate any plan or proposal or make any public announcement, proposal, offer or filing under the 1934 Act, any similar or successor statute or otherwise, or take action to cause the Company to make any such filing, with respect to: (A) any form of business combination or transaction involving the Company (other than transactions contemplated by this Agreement, including, without limitation, giving the Company an Offer (as hereinafter defined) pursuant to Section 5(c) hereof) or any Affiliate thereof, including, without limitation, a merger, exchange offer or liquidation of the Company's assets, (B) any form of restructuring, recapitalization or similar transaction with respect to the Company or any Affiliate thereof, including, without limitation, a merger, exchange offer or liquidation of the Company's assets, (C) any acquisition or disposition of assets material to the Company, (D) any request to amend, waive or terminate the provisions of this Agreement or (E) any proposal or other statement inconsistent with the terms of this Agreement; provided, however, that the Stockholder and its Affiliates may discuss the affairs and prospects of the Company, the status of the Stockholder's investment in the Company and any of the matters described in clauses (A) through (E) of this paragraph at any time, and from time to time, with the Board of Directors of the Company or any director or executive officer of the Company and the Stockholder may discuss any matter, including any of the foregoing, with its outside legal and financial advisors, if as a result of any such discussions the Stockholder is not required to make, and does not make, any public announcement or filing under the 1934 Act otherwise prohibited by this Agreement as a result thereof. Notwithstanding this clause (v) but subject to Section 3(c)(i), (x) after December 31, 2010, the Stockholder may make one written proposal (as may be modified or amended to respond to the Board of Directors of the Company or to competition from third parties) to the Board of Directors of the Company to acquire all, but not less than all, of the outstanding equity securities of the Company, which proposal shall provide, among other things, that the management headquarters of the cleaning and sanitizing business would be maintained in St. Paul, Minnesota for a period of no less than ten years from the consummation of any such proposed acquisition; the Stockholder may make one second written proposal (as may be modified or amended to respond to the Board of Directors of the Company or to competition from third parties), only after 18 months have elapsed after the date the first proposal was first made, to the Board of Directors of the Company to acquire all, but not less than all, of the outstanding equity securities of the Company, which proposal shall provide, among other things, that the management headquarters of the cleaning and sanitizing business would be maintained in St. Paul, Minnesota for a period of no less than ten years from the consummation of any such proposed acquisition; the Stockholder may make one third written proposal (as may be modified or amended to respond to the Board of Directors of the Company or to competition from third parties), only after 36 months have elapsed after the date the second proposal was first made, to the Board of Directors of the Company to acquire all, but not less than all, of the outstanding equity securities of the Company, which proposal shall provide, among other things, that the management headquarters of the cleaning and sanitizing business would be maintained in St. Paul, Minnesota for a period of no less than ten years from the consummation of any such proposed acquisition; and, thereafter, the Stockholder may make additional written proposals (as may be modified or amended to respond to the Board of Directors of the Company or to competition from third parties), provided that each such proposal may be made only after five years have elapsed after the date the immediately preceding proposal was first made, to the Board of Directors of the Company to acquire all, but not less than all, of the outstanding equity securities of the Company, which proposal shall provide, among other things, that the management headquarters of the cleaning and sanitizing business would be maintained in St. Paul, Minnesota for a period of no less than ten years from the consummation of any such proposed acquisition; provided, however, that any material breach by the Stockholder of any material provision of this Section 3(b)(v)(x) shall automatically terminate the Stockholder's right to make any additional proposals pursuant to this Section 3(b)(v)(x); (y) if at any time during the Agreement Period the Board of Directors causes the Company to enter into a definitive agreement providing for the issuance of shares of its equity securities in a single transaction or series of related transactions that would cause the Stockholder's and its Affiliates' percentage ownership of Voting Securities immediately prior to such transaction to be reduced by greater than 50%, then the Stockholder may make, within 90 days of the Company's announcement of entering into such an agreement, one written proposal (as may be modified or amended to respond to the Board of Directors of the Company or to competition from third parties) to the Board of Directors of the Company to acquire all, but not less than all, of the outstanding equity securities of the Company, which proposal shall provide, among other things, that the management headquarters of the cleaning and sanitizing business would be maintained in St. Paul, Minnesota for a period of no less than ten years from the consummation of any such proposed acquisition; and (z) in connection with any written proposal permitted by clause (x) or (y) above, the Stockholder may make such filings with Authorities which, in the good faith judgment of the Stockholder based upon the written advice of outside counsel to the Stockholder for the respective jurisdiction, are required by law in connection with making a proposal permitted by clauses (x) or (y) above; (vi) otherwise act, alone or in concert with others (including by providing financing for another party), to seek or offer to control or influence, in any manner, the management, Board of Directors or policies of the Company; provided, however, that this provision shall not prevent the Stockholder's designees from participating in, or otherwise seeking to affect the outcome of, discussions and votes of the Board of Directors of the Company with respect to matters coming before it; or (vii) knowingly instigate or encourage any third party to take any of the actions enumerated in this Section 3(b). (c) During the Agreement Period, except as permitted by Section 5(a)(ii) hereof, the Stockholder will not (i) merge with or into, or consolidate or combine with, any other corporation unless (A) the Stockholder is the surviving corporation or the surviving or newly created corporation and its Affiliates and any person controlling it and any such controlling person's Affiliates agree in writing to be bound by this Agreement, including Section 11 hereof, and (B) after consummation of the transaction, the surviving or newly created corporation and its Affiliates and any person controlling it and any such controlling person's Affiliates do not beneficially own Voting Securities in excess of the Permitted Percentage (as hereinafter defined); provided, however, that the Stockholder shall not be in violation of this Section 3(c)(i) if after consummation of a transaction such persons beneficially own Voting Securities in excess of the Permitted Percentage if all of the following conditions are satisfied: (x) Voting Securities held by such persons are agreed in writing to be subject to all of the provisions of this Agreement as if they were Shares held by the Stockholder; (y) such persons cause Voting Securities held in excess of the Permitted Percentage to be sold, transferred or disposed of as if they were Shares subject to the provisions of this Agreement within 270 days of the date of the consummation of the transaction; and (z) from the earliest date an agreement with the Stockholder relating to such a transaction is entered into until the provisions of clause (y) above are satisfied, the Stockholder may not make, continue or pursue any proposal otherwise permitted by Section 3(b)(v)(x) or Section 3(b)(v)(y) and must terminate any such proposal previously made and not yet terminated; or (ii) liquidate, dissolve or otherwise make a distribution of all of its assets to its stockholders unless, after such liquidation or other distribution, each person receiving equity securities of the Company in such liquidation or other distribution and each of such person's Affiliates and each person controlling such person and each of such controlling person's Affiliates does not beneficially own equity securities of the Company representing 2% or more of the total outstanding equity securities of the Company. (d) During the Agreement Period, the Stockholder and its Affiliates shall be present, in person or by proxy, and without further action hereby agree that they shall be deemed to be present, at all meetings of stockholders of the Company so that all Voting Securities beneficially owned by the Stockholder and its Affiliates shall be counted for purposes of determining the presence of a quorum at such meetings. During the Agreement Period, all Voting Securities beneficially owned by the Stockholder and its Affiliates shall be voted by the Stockholder and its Affiliates, at the option of the Stockholder, either in accordance with the recommendation or direction of the Company's Board of Directors or pro rata in the same manner and proportion that votes of the stockholders of the Company, other than the Stockholder's and its Affiliates' votes and the votes of all executive officers and directors of the Company and of the members of their immediate families, have been cast; provided, however, that the Stockholder and its Affiliates shall cast their votes in accordance with the recommendation of the Company's Board of Directors (i) in all elections of directors of the Company in which the designees of the Stockholder are included in the slate of nominees in accordance with the terms of this Agreement and (ii) on all matters (A) submitted to the vote of stockholders of the Company which have been proposed by any stockholder or stockholders, (B) affecting or regarding the compensation or benefits of directors, officers or employees of the Company and (C) relating to matters concerning the continued independent, publicly traded nature of the Company or any potential change in control of the Company (other than the matters set forth in items (V) - (X) below) or concerning federal or state statutes relating to such matters; and provided further, that the Stockholder and its Affiliates may vote the Voting Securities owned by them as the Stockholder determines in its sole discretion with respect to any of the following transactions initiated by the Board of Directors of the Company which are presented at a meeting of stockholders of the Company for their approval (any such transaction being referred to herein as a "Strategic Transaction"): (V) any disposition of the Company (by way of merger, sale of assets or otherwise) or a substantial part of its assets, (W) any recapitalization of the Company (other than a recapitalization for the purpose of forming a holding company or to effect a change in the Company's state of incorporation), (X) any liquidation of, or consolidation involving, the Company, (Y) any increase in the Company's authorized shares or other amendment to the Restated Certificate of Incorporation or By-Laws of the Company or (Z) any transaction not otherwise provided for in this paragraph (d) that could reasonably be expected to have a material effect on the Stockholder's investment in the Shares. Notwithstanding anything to the contrary in this Agreement, in the event that the Stockholder exercises a right provided it under this Agreement which may require a vote of the stockholders of the Company, the Stockholder and its Affiliates shall be present, in person or by proxy, and shall vote all Voting Securities beneficially owned by the Stockholder and its Affiliates in accordance with the recommendation of the Company's Board of Directors so as to facilitate the exercise of such right. 4. Section The Stockholder's Right to Purchase; Dilution Provisions. (a) If, during the Agreement Period, the Company issues any additional Voting Securities (an "Additional Issuance"), except for issuances pursuant to (i) any presently outstanding stock option, warrant, convertible security or other right to purchase shares of any equity securities of the Company, (ii) any benefit plan or other employee or director arrangement, (iii) an employee stock ownership plan not in excess of 10% of the outstanding Voting Securities or (iv) any stock split, stock dividend or similar distribution made available to holders of Common Stock generally (each a "Permitted Issuance"), then the Stockholder shall be entitled to purchase from the Company during the 90-day period following the date on which the Company has given the Stockholder written notice of the occurrence of the Additional Issuance, at the then Market Price (as hereinafter defined) of the Shares, that number of shares of Voting Securities obtained by calculating, on the third business day prior to the closing date of such purchase, (1) the product of (A) the quotient of (x) the number of shares of Voting Securities owned by the Stockholder immediately prior to the Additional Issuance divided by (y) the aggregate number of outstanding shares of Voting Securities immediately prior to the Additional Issuance and (B) the aggregate number of shares of Voting Securities being issued by the Company in the Additional Issuance reduced by the number of Voting Securities acquired by the Company from the date of the Additional Issuance until the third business day prior to the closing date of such purchase, rounded up to the nearest whole share and (2) subtracting from such product the number of shares of Voting Securities, if any, issued to, or purchased by, the Stockholder and its Affiliates in such Additional Issuance and the number of shares of Voting Securities otherwise acquired by the Stockholder and its Affiliates during the period beginning on the date of the Additional Issuance until the third business day prior to the closing date of such purchase; provided, however, that the Stockholder shall not have the right to acquire any shares of Voting Securities pursuant to this Section 4(a) to the extent that the acquisition of such shares would result in the Stockholder owning more than the Permitted Percentage of outstanding Voting Securities; provided further, however that the failure of the Company to give written notice of the occurrence of the Additional Issuance shall not prevent the Stockholder from exercising its rights hereunder if it shall otherwise become aware of the occurrence of the Additional Issuance. (b) The Stockholder may purchase (i) from time to time, in the open market or in privately negotiated transactions, up to an aggregate number of shares of Voting Securities which, when added to the shares of Voting Securities then beneficially owned by the Stockholder and its Affiliates, would result in the Stockholder and its Affiliates beneficially owning no more than 35% of the then outstanding shares of Voting Securities (the "Permitted Percentage") and (ii) subject to Section 5(b) hereof, such equity securities from the Company as it may be permitted to purchase under the Rights Plan as a result of its ownership of Common Stock. (c) (1) If within any consecutive 24-month or less period (a "Measuring Period") during the Agreement Period the Company issues additional Voting Securities (other than Voting Securities issued (i) pursuant to a Permitted Issuance, (ii) pursuant to the Rights Plan, (iii) to the Stockholder or its Affiliates or (iv) pursuant to a transaction or an issuance that a majority of the members of the Board of Directors of the Company designated by the Stockholder do not vote against) in an aggregate amount (reduced by any Voting Securities acquired by the Company during the Measuring Period) that would cause, solely as a result of such issuances, the percentage ownership of Voting Securities of the Stockholder (including, for the purpose of calculating such percentage ownership, Voting Securities acquired by the Stockholder pursuant to Section 4(a) hereof during the Measurement Period, but excluding Voting Securities sold by the Stockholder) as of the end of the Measuring Period to be reduced by more than 25% of its holding at the beginning of the Measuring Period (the date such reduction first occurs being a "Dilution Date"), then for 60 days commencing on the date on which the Company has given the Stockholder written notice of the occurrence of a Dilution Date, the Stockholder shall have the right to request by written notice that the Company repurchase all of its Shares or otherwise sell its Shares as provided in subparagraph (3) of this Section 4(c) (the "Stockholder Election"); provided, however, that the failure of the Company to give written notice of the occurrence of a Dilution Date shall not prevent the Stockholder from exercising its rights hereunder if it shall otherwise become aware of the occurrence of a Dilution Date; provided further, that no Dilution Date shall be deemed to have occurred if, during the Measuring Period, the Stockholder shall have sold, in the aggregate, more than twenty (20%) of its Shares based on its holding of Shares at the beginning of the Measuring Period; and provided further, that the Stockholder may exercise a Stockholder Election only once during the Agreement Period. (2) In the event that the Stockholder determines not to exercise the Stockholder Election within 60 days after its receipt of notice of the occurrence of a Dilution Date, a new Measuring Period shall commence, and none of the issuances of Voting Securities by the Company during the prior Measuring Period shall be taken into account in the new Measuring Period. (3) If the Stockholder exercises the Stockholder Election, the Company shall be obligated, in its sole discretion, to (i) purchase some or all of the Shares from the Stockholder at a per Share price equal to the average closing price of the Common Stock on the New York Stock Exchange for the 15 trading days prior to and including the Dilution Date (the "Dilution Date Price") pursuant to the terms of subparagraph (v) below and/or (ii) direct the Stockholder to sell the Shares pursuant to the terms of subparagraph (w) below. The Stockholder shall receive, within a period of 24 months commencing on the date the Company receives the Stockholder Election (the "Payment Period"), the Dilution Date Price, plus interest accruing from the date the Payment Period begins to the date of payment for such Shares at the prime rate as determined by Citibank, N.A. (the "Prime Rate"), less any dividends paid on the Shares during the Payment Period, multiplied by the total number of Shares owned by the Stockholder (the "Guaranteed Amount"), as follows: (v) the Company may, in its sole discretion, at any time and from time to time during the Payment Period, purchase some or all of the Shares from the Stockholder at a per Share price equal to the Dilution Date Price, plus interest accruing from the date the Payment Period begins to the date of payment for such Shares at the Prime Rate, less any dividends paid on the Shares during the Payment Period; (w) the Stockholder shall sell Shares at such times and in such amounts as the Company shall instruct in one or more private transactions arranged by the Company or in underwritten secondary public offerings in accordance with Section 5(a)(vi) hereof; (x) to the extent that, by the earlier of the end of the Payment Period or the date when the Stockholder no longer owns any Shares, the aggregate payments received by the Stockholder for the sale of its Shares pursuant to subparagraphs (v) and/or (w) above do not equal the Guaranteed Amount, the Company shall pay to the Stockholder an amount of consideration, in, at the Company's sole discretion, (A) cash and/or (B) in the form of equity securities of the Company or any other consideration that would not result in any Shares held by the Stockholder being classified as a "redeemable equity security" pursuant to the Commission's Accounting Series Release No. 268, having a value equal to the Guaranteed Amount minus the aggregate payments actually received by the Stockholder during the Payment Period; (y) as of the time, and to the extent, that the aggregate payments received by the Stockholder for the sale of its Shares pursuant to subparagraphs (v) and (w) above exceeds the Guaranteed Amount, the Stockholder shall promptly pay the Company such excess amount, and, to the extent that the Stockholder then still owns any Shares, the Stockholder shall transfer to the Company such remaining Shares; and (z) during the Payment Period, the Stockholder shall not acquire beneficial ownership of any additional equity securities of the Company, and, other than pursuant to the terms of this Section 4(c), the Stockholder shall not, without the Company's prior written consent, dispose of any Shares. (4) The Company may terminate its obligations pursuant to this Section 4(c) if the Stockholder shall fail in any material respect to comply with any of its material obligations under this Agreement as such alleged failure is set forth in the Company's written notice to the Stockholder unless, if the failure can be cured, within 30 days of such notice the Stockholder has cured the failure to comply. 5. Section Dispositions of Shares and the Company's Right of First Refusal. (a) Except as otherwise provided in this Section 5, during the Agreement Period and subject to the provisions of Sections 5(b) and 5(c) hereof, the Stockholder will not sell, transfer, pledge, encumber or dispose of, directly or indirectly, any Shares except: (i) to the Company or in a transaction approved by the Board of Directors of the Company; (ii) to an Affiliate of the Stockholder provided that such Affiliate agrees to be bound by this Agreement; (iii) in any transaction permitted by Section 3(c) hereof; (iv) to a person other than the Stockholder or any Affiliate of the Stockholder (a "Third Person") pursuant to Rule 144 under the Securities Act; provided, however, that (A) the Stockholder will use all reasonable efforts to insure that such Third Person and such Third Person's Affiliates, or any group such Third Person may be a member of shall not hold in the aggregate more than 2% (any such Third Person who would hold in excess of such limit being referred to herein as a "Prohibited Holder") of the outstanding Voting Securities after such transaction or (B) such Third Person agrees in writing to be bound by the terms of this Agreement and the Board of Directors of the Company approves such transaction; (v) in a valid private placement to a person that (A) the Stockholder reasonably believes after due inquiry would not be a Prohibited Holder following such transaction and obtains a written representation from the purchaser to that effect or (B) agrees in writing to be bound by the terms of this Agreement and the Board of Directors approves such transaction; (vi) pursuant to an underwritten public offering under the Securities Act in accordance with the terms for registration rights attached hereto as Exhibit A, pursuant to which the managing underwriter agrees to effect the sale of the Voting Securities in a manner which will effect a broad distribution thereof and provided that the Stockholder shall use all reasonable efforts to insure that no sales of Voting Securities are made to any Prohibited Holder (other than the underwriters or any selected dealers); (vii) pursuant to any tender or exchange offer made pursuant to Section 14(d) of the 1934 Act by a person with respect to which the Company does not recommend rejection (it being understood that the Stockholder may not tender its Shares pursuant to such tender or exchange offer until the Company has publicly taken a position with respect to such offer or has stated that it will remain neutral or is unable to take a position with respect thereto) in accordance with Rule 14e-2 of the 1934 Act, any successor regulation or otherwise; (viii) to a bona fide financial institution in connection with the grant of a pledge or other encumbrance securing a bona fide loan so long as the pledgee agrees in writing prior to the execution of the pledge that upon any transfer to the pledgee of any Shares upon any foreclosure, such Shares and the pledgee thereof will remain and become subject to the restrictions contained in this Agreement; or (ix) in any transaction permitted by Section 4(c) hereof. The Stockholder shall give the Company notice promptly upon the disposition hereunder of any Shares. Purchases, transfers or other distributions of Shares in violation of the provisions of this Agreement shall be null and void, and the Shares subject to such purchase, transfer or other disposition shall remain subject to this Agreement. (b) If at any time the Company repurchases or acquires any outstanding Voting Securities by means of a share repurchase program, a self tender offer or otherwise (a "Share Repurchase") or the Stockholder acquires Voting Securities pursuant to the Rights Plan such that the percentage of outstanding Voting Securities owned by the Stockholder and its Affiliates is greater than the Permitted Percentage and the Company so requests by written notice to the Stockholder, the Stockholder shall, or shall cause its Affiliates to, sell, within six months after the date on which the Stockholder receives the Company's written notice, Voting Securities as required in accordance with the terms of this Agreement so that the percentage of outstanding shares of Voting Securities owned by the Stockholder and its Affiliates shall not exceed the Permitted Percentage; provided, however, that the Stockholder and its Affiliates shall use all reasonable efforts to insure that sales of Voting Securities are not made to any Prohibited Holder; provided further, however, that if the Stockholder or any of its Affiliates is required to dispose of Shares pursuant to this Section 5(b) and such disposition during such six-month period would result in liability to the Stockholder or such Affiliate under Section 16(b) of the 1934 Act or any similar statute that may replace it, then the six-month period during which the Stockholder or such Affiliate shall be required to dispose of Shares pursuant to this Section 5(b) shall begin on the first date on which the Stockholder and such Affiliate may dispose of Shares without incurring liability under Section 16(b) of the 1934 Act as a result of such disposition. If the Stockholder and its Affiliates fail to reduce their holdings of Voting Securities within six months after the Company so requests in connection with a Share Repurchase (or such longer period not to exceed seven (7) months as provided in the second proviso to the preceding sentence), in addition to any other remedies the Company may have, the Company shall be entitled to repurchase from the Stockholder or its Affiliates, from time to time for a period of 90 days thereafter, at the greater of (x) the Market Price of such Shares on the date of the Company's notice to the Stockholder to repurchase Shares pursuant to this Section 5(b) and (y) the highest price paid per share by the Company in such Share Repurchase during the 30-day period prior to the date on which the Stockholder receives the written notice referred to in the first sentence of this Section 5(b), such number of shares of Voting Securities as will reduce the Stockholder's and its Affiliates' aggregate percentage ownership of Voting Securities to the Permitted Percentage. (c) During the Agreement Period, notwithstanding any other provision of this Agreement, any sale, transfer or other disposition of the Shares by the Stockholder permitted by this Agreement shall not be made without first making an offer in writing to sell such Shares to the Company at the bona fide proposed price per Share (the "Offer Price"), and upon such other bona fide terms and conditions upon which the Stockholder proposes to make such sale, transfer or disposition (the "Offer"). Upon receipt of such Offer (which shall also set forth the method of payment, the amount and class of Shares to be sold, the identity (if known) of the person or persons to whom the Stockholder proposes to sell, transfer or otherwise dispose of such Shares, the other material terms (to the extent known) upon which such sale is to be made and all other relevant information reasonably requested by the Company), the Company shall have that number of days set forth in the following sentence within which to accept such Offer by delivering a written notice to the Stockholder irrevocably electing to purchase all, but not less than all, of the Shares covered thereby. Subject to Section 5(f) hereof, if the Offer is with respect to Shares having an aggregate market value on the date of such notice (a) of less than or equal to $50 million, the Company shall have 5 days to accept such Offer, (b) greater than $50 million and less than or equal to $150 million, the Company shall have 10 days to accept such Offer, (c) greater than $150 million and less than or equal to $250 million, the Company shall have 15 days to accept such Offer or (d) greater than or equal to $250 million, the Company shall have 20 days to accept such Offer; provided, however, that if the proposed sale is to be made pursuant to a tender or exchange offer, the Company shall have one day less than the number of days remaining before the tender or exchange offer expires to accept such Offer. If the Company elects to accept such Offer, the closing of the purchase pursuant thereto shall occur, with payment in immediately available funds, on the latest of (i) 20 days after the acceptance by the Company of such Offer, (ii) the closing date provided for in the Offer or (iii) the end of such period of time as the Company and the Stockholder may reasonably require in order to comply with applicable laws and regulations. Transfers pursuant to Sections 5(a)(i), 5(a)(ii), 5(a)(iii) and 5(a)(viii) hereof are not subject to the provisions of this Section 5(c). (d) If the Offer specifies that the Shares are to be sold in the market in a method whereby the price cannot be determined at the time of the making of the Offer (a "Market Sale"), the purchase price for the Shares proposed to be sold shall be equal to the Market Price of such Shares on the date of such Offer. For purposes of this Agreement, the term "Market Price" shall mean the average of the daily Closing Prices of the Shares for the 20 consecutive trading days immediately prior to the date on which the Market Price is to be determined. The "Closing Price" for each day with respect to any securities shall be the last sale price of such securities on the national securities exchange on which such securities are listed and principally traded or, if such securities are not listed on any national securities exchange, as reported by NASDAQ, or, if not so reported by NASDAQ, the average of the high bid and low asked quotations for such securities as reported by the National Quotations Bureau Incorporated or similar organization, or, if on any such date such securities are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such securities mutually selected by the Company and the Stockholder. Market Sales shall be deemed to be for cash. (e) If the purchase price specified in the Offer includes any property other than cash, such purchase price shall be deemed to be the amount of any cash included in the purchase price plus the value (determined as provided below) of such other property included in such price. The value of any non-cash property shall be determined in the following manner: (i) The value of securities which are publicly traded shall be deemed to be the Market Price of such securities on the date of the Offer; and (ii) The value of any other property shall be determined by an appropriate expert mutually selected by the Company and the Stockholder. The determination of the dollar value of the non-cash consideration at issue by any such expert shall be made promptly (but in no event more than 15 business days after receipt of the Offer) and shall be conclusive and binding on all the parties hereto. (f) The sale, transfer or other disposition to any third party of such Voting Securities shall not be made until such determination referred to in Section 5(e)(ii) has been completed and delivered to all the parties hereto. The Company shall have the later of (i) five business days after the receipt of such determination by the expert referred to in Section 5(e)(ii) and (ii) the applicable time period set forth in Section 5(c) within which to accept such Offer. (g) If the Company has not exercised its option to purchase the Shares pursuant to the Offer, the Stockholder shall be free, for a period of 60 days (or, if longer, 60 days from the effective date of a registration statement under the Securities Act, if such registration is required) from the date of the Company's rejection of the Offer (which, unless the Company shall have given written notice of its rejection of the Offer, shall be deemed to have occurred on the last day on which the Company could accept the Offer in accordance herewith), to sell all of the Shares to the third party transferee subject to the provisions of this Agreement, at a price equal to or greater than the price specified in the Offer and in the manner and on terms no less favorable to the Stockholder than were specified in the Offer. If the Shares are not sold within such 60-day period, they shall again become subject to the procedures provided in this Section 5. 6. Section Economic Parity. If at any time during the Agreement Period any person or group acquires beneficial ownership of Voting Securities, whether pursuant to a tender or exchange offer made pursuant to Section 14(d) of the 1934 Act as to which the Company has recommended that its stockholders reject such offer or otherwise, such that such person or group beneficially owns more than 50% of the outstanding Voting Securities (a "Change in Control Transaction"), in addition to any other rights the Stockholder may have, the Stockholder shall have the right for a period of six months after such person or group acquires such beneficial ownership to deliver a notice relating to all, but not less than all, of the Shares then held by the Stockholder at that time (the "Notice Shares") to the Company. Within 45 days following receipt of such notice, the Company shall pay to the Stockholder an amount of consideration, in either, at the Company's sole discretion, (i) cash or (ii) in the form of equity securities of the Company or any other consideration that would not result in any Shares held by the Stockholder being classified as a "redeemable equity security" pursuant to the Commission's Accounting Series Release No. 268, having a value equal to the product of the number of Notice Shares times the positive difference between (i) the consideration per Share equal to the highest price per share paid by such person or group in acquiring Voting Securities and (ii) in the case of Notice Shares held by the Stockholder on the date of such payment, the Market Price on the day before the payment and, in the case of Notice Shares sold by the Stockholder after the Change in Control Transaction and prior to such payment, the amount realized by the Stockholder pursuant to such dispositions, net of transaction costs (the aggregate amount being the "Aggregate Spread"). The Company shall indemnify and hold the Stockholder harmless against any adverse tax consequences suffered by the Stockholder as a result of the Company's payment to the Stockholder pursuant to the previous sentence as compared to the tax consequences of purchasing the Notice Shares at the consideration per share equal to the highest price per share paid by such person or group in acquiring Voting Securities. Such indemnification shall take the form of either, at the Company's sole discretion, (i) cash or (ii) equity securities of the Company or any other consideration that would not result in any Shares held by the Stockholder being classified as a "redeemable equity security" pursuant to the Commission's Accounting Series Release No. 268. In the event that the Company determines to make a payment to the Stockholder pursuant to this Section 6 in a form of consideration other than cash, the Company shall provide an opinion to the Stockholder from an internationally recognized investment banking firm, mutually agreeable to both parties hereto, as to the value of such consideration. In addition, unless the Company arranges for the purchase of such securities from the Stockholder at a price at least equal to the Aggregate Spread, upon request of the Stockholder within 45 days of such payment, the Company shall, within 90 days of such request, register the securities delivered as payment (the "Registered Securities") for resale by the Stockholder to the extent possible in an underwritten offering with an internationally recognized underwriter mutually agreeable to both parties. If the aggregate net proceeds to the Stockholder in such registered offering will be less than the Aggregate Spread, the Company shall deliver to the Stockholder either, at the Company's sole discretion, (i) cash equal to the amount by which the Aggregate Spread exceeds such net proceeds, or (ii) additional Registered Securities for resale in such registered offering in the amount required so that the aggregate net proceeds of such offering to the Stockholder equals the Aggregate Spread. In the event that the Company determines to make a payment to the Stockholder pursuant to this Section 6 in the form of cash, then the Company shall make such payment within such 45 day period to the extent funds are legally available therefor (and, if not then legally available therefor, as soon thereafter as such funds are legally available therefor). 7. Section Legend on Certificates. The Stockholder hereby acknowledges and agrees that each of the certificates representing the Shares held by the Stockholder shall be subject to stop transfer instructions and shall include the following legend: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY BE OFFERED OR SOLD ONLY IF REGISTERED UNDER THE SECURITIES ACT OR IF AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THESE SHARES ARE SUBJECT TO CERTAIN LIMITATIONS ON TRANSFER SET FORTH IN AN AGREEMENT, DATED AS OF ___________, ______, BETWEEN ECOLAB INC. AND HENKEL KGaA, INCLUDING, BUT NOT LIMITED TO, RESTRICTIONS ON THE SALE, TRANSFER, PLEDGE, ENCUMBRANCE OR OTHER DISPOSITION TO ANY PERSON AND THAT PERSON'S AFFILIATES OR ANY GROUP THAT PERSON MAY BE A MEMBER OF THAT WOULD HOLD IN THE AGGREGATE MORE THAN 2% OF THE OUTSTANDING VOTING SECURITIES AFTER SUCH TRANSACTION. A COPY OF SUCH AGREEMENT IS ON FILE WITH THE SECRETARY OF ECOLAB INC. Within one business day after receipt by the Company of a demand by the Stockholder, the Company agrees to (i) terminate the stop transfer instructions and remove the legend in connection with transfers pursuant to Sections 5(a)(iv)(A) and 5(a)(vi) of this Agreement, (ii) terminate the stop transfer instructions and remove only the first sentence of the above legend in connection with transfers pursuant to Section 5(a)(iv)(B), (iii) terminate the stop transfer instructions and remove all but the first sentence of the above legend (A) in connection with transfers pursuant to Sections 5(a)(v)(A) and 5(a)(vii) hereof and (B) after the Agreement Period and (iv) remove the first sentence of the above legend if the Company is furnished an opinion of counsel reasonably satisfactory to the Company that such Shares may be freely transferred under applicable securities laws. Promptly upon the acquisition by the Stockholder of any shares of Voting Securities other than pursuant to the Transaction Agreements, the Stockholder shall surrender the certificates representing such Shares to the Company, and the Company shall place the last two sentences of the foregoing legend on such certificates and thereafter reissue such certificates to the Stockholder. 8. Section Directors Designated by the Stockholder. At each annual meeting of the stockholders of the Company following the date hereof and prior to the end of the Agreement Period, the Company will nominate, or cause to be nominated, a number of individuals (rounded down to the nearest whole number) to be designated by the Stockholder for election as members of the Board of Directors (which designees shall not include individuals whose membership on the Board of Directors would be a violation of law) such that the percentage of the total number of members of the Board of Directors designated by the Stockholder equals the percentage of Voting Securities then beneficially owned by the Stockholder and its Affiliates. The Board of Directors of the Company shall consider any request by the Stockholder to increase the Stockholder's percentage representation on the Board if between annual meetings the Stockholder's percentage ownership of Voting Securities has increased such that the Stockholder would be entitled to designate additional nominees to the Board of Directors at the next annual meeting of the Board. If between annual meetings the Stockholder's percentage ownership of Voting Securities has decreased such that the Stockholder would be entitled to designate fewer nominees to the Board of Directors at the next annual meeting of the Board and the Stockholder has sold some Voting Securities since the last annual meeting, then the Stockholder shall use all reasonable efforts to cause one or more of the directors it has designated to resign from the Board so that the number of directors designated by the Stockholder serving on the Board equals the number it would be entitled to designate at the next annual meeting. The members of the Board of Directors of the Company that have been designated by the Stockholder pursuant to this Section 8 shall be allocated as equally as possible among the three classes of the Company's Board of Directors. The parties hereto anticipate that Directors designated by the Stockholder will participate in all Board of Directors' deliberations concerning extraordinary transactions, including, but not limited to, acquisitions by the Company and Third-Party proposals to acquire the Company, except to the extent that, in the reasonable judgment of the Board, the topic to be considered raises a conflict of interest for such Directors. Upon the date the Stockholder is no longer entitled to designate nominees for election to the Board of Directors of the Company, the Stockholder shall cause the members of the Board of Directors of the Company that have been designated by the Stockholder to resign from the Board of Directors, effective immediately. 9. Section Covenants of the Company. (a) Issuance of Securities Having Disproportionate Voting Rights. During the Agreement Period, the Company shall not issue Voting Securities having voting rights disproportionately greater than the equity investment in the Company represented by such Voting Securities. (b) For so long as the Stockholder owns Shares which represent more than 2% of the voting power of the Company's then outstanding Voting Securities: (i) the Company, as soon as practicable and in any event within 50 days after the end of each quarterly period (other than the last quarterly period) in each fiscal year, will furnish to the Stockholder statements of consolidated net income and cash flows and a statement of changes in consolidated stockholders' equity of the Company and its subsidiaries for the period from the beginning of the then current fiscal year to the end of such quarterly period, and a consolidated balance sheet of the Company and its subsidiaries as of the end of such quarterly period, setting forth in each case in comparative form figures for the corresponding period or date in the preceding fiscal year, all in reasonable detail and certified by an authorized financial officer of the Company, subject to changes resulting from year-end adjustments; provided, however, that delivery pursuant to paragraph (iii) below of a copy of the Quarterly Report on Form 10-Q (without exhibits unless requested by the Stockholder) of the Company for such quarterly period filed with the Commission shall be deemed to satisfy the requirements of this paragraph (i); (ii) the Company, as soon as practicable and in any event within 95 days after the end of each fiscal year, will furnish to the Stockholder statements of consolidated net income and cash flows and a statement of changes in consolidated stockholders' equity of the Company and its subsidiaries for such year, and a consolidated balance sheet of the Company and its subsidiaries as of the end of such year, setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, all in reasonable detail and examined and reported on by independent public accountants of recognized standing selected by the Company; provided, however, that delivery pursuant to paragraph (iii) below of a copy of the Annual Report on Form 10-K (without exhibits unless requested by the Stockholder) of the Company for such fiscal year filed with the Commission shall be deemed to satisfy the requirements of this paragraph (ii); (iii) the Company, promptly upon transmission thereof, will furnish to the Stockholder copies of all such financial statements, proxy statements, notices and reports as it shall send to its stockholders and copies of all such registration statements (without exhibits) and all such regular and periodic reports as it shall file with the Commission; and (iv) the Company will furnish to the Stockholder such other non-confidential financial data of the Company and its Subsidiaries as the Stockholder may reasonably request. 10. Section Exceptions to Restrictions. Notwithstanding anything contained in this Agreement to the contrary, the restrictions set forth in Sections 3(a), 3(b), 3(c), 3(d) and 5 hereof shall terminate and be of no further force and effect upon the occurrence of any of the following events: (a) (i) At any time, any Third Person (other than the Company, an employee stock ownership plan or other pension, stock bonus or stock incentive plan of the Company or any of its subsidiaries) is or becomes the beneficial owner of, or makes a tender or exchange offer pursuant to Section 14(d) of the 1934 Act with respect to which the Company does not recommend rejection (it being understood that such restrictions shall not be terminated until the Company has publicly taken a position with respect to such offer or has stated that it will remain neutral or is unable to take a position with respect thereto) in accordance with Rule 14e-2 of the 1934 Act, any successor regulation or otherwise for, an amount of Voting Securities greater than 32.5% of the outstanding Voting Securities, (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof or (iii) at any time any Third Person, by way of ownership of Voting Securities, representation on the Board of Directors of the Company or both, is in fact controlling the operations of the Company; (b) The Company's Board of Directors determines to effect, or to solicit proposals to effect a Sale of the Company or causes the Company to enter into a definitive agreement providing for the Sale of the Company; or (c) The Company shall fail in any material respect to comply with any of its material obligations under this Agreement as such alleged failure is set forth in the Stockholder's written notice to the Company unless, if the failure can be cured, within 30 days of such notice the Company has cured the failure to comply. For purposes of this Section 10, a "Sale of the Company" shall mean a merger (other than a merger for the purpose of forming a holding company or to effect a change in the Company's state of incorporation), combination or, in any one or more related transactions, sale of all or substantially all of the Company's assets as a result of which the Directors of the Company immediately prior to such transaction do not represent a majority of the board of directors, or the stockholders of the Company immediately prior to such transaction do not continue to own equity securities representing more than 50% of the vote and of the equity of the Company or the ultimate controlling corporation following such merger or combination or succeeding to ownership of all or substantially all of the Company's assets. 11. Section The Company's Right to Repurchase. Notwithstanding anything contained in this Agreement to the contrary, upon the occurrence of any of the following events: (a) (i) at any time, any Competitor (as defined below), or any Affiliate thereof, is or becomes the beneficial owner of an amount of equity securities of the Stockholder representing more than 50% of the voting power of the Stockholder's outstanding securities or (ii) at any time any Competitor, or any Affiliate thereof, by way of ownership of equity securities of the Stockholder, representation on the Shareholders' Committee of the Stockholder (or, upon a conversion of the Stockholder to another corporate form, the Supervisory Board or such other body as appoints and dismisses the members of the management board of the Stockholder) or both, is in fact controlling the operations of the Stockholder; or (b) the Stockholder enters into a definitive agreement with any Competitor, or any Affiliate thereof, pursuant to which the Competitor, or any Affiliate thereof, will acquire an amount of equity securities of the Stockholder representing more than 50% of the voting power of the Stockholder's outstanding securities; then the Company shall have the option, for a period of 90 days after the occurrence of any of the foregoing events, to repurchase all, but not less than all, of the Shares held by the Stockholder on the date of such event at the Market Price, as determined on the date the Company notifies the Stockholder of its intention to exercise such option. The closing for the repurchase of the Shares shall occur on the later of (i) 180 days from the date that the Company notifies the Stockholder of its intention to exercise its repurchase option pursuant to this Section 11 or (ii) the end of such period of time as the Company and the Stockholder may reasonably require in order to comply with applicable laws and regulations. Furthermore, during the period beginning when the Company notifies the Stockholder of its intention to exercise its repurchase option pursuant to this Section 11 until the closing of such repurchase, the Stockholder shall not purchase any additional equity securities of the Company. For purposes of this Section 11, a "Competitor" shall mean any Third Person that directly or through an Affiliate is engaged in a business which is competitive with a business then engaged in by the Company or manufactures, sells, leases, markets, distributes or otherwise provides products or services similar to those of a business of the Company but does so in a channel of distribution different from the channels of distribution utilized by the Company; provided, that unless the annual revenues to such Third Person and/or its Affiliate from such businesses or provision of such products or services shall aggregate at least $200 million, such Third Person shall not constitute a Competitor. 12. Section Affiliates. A person or entity who at any time may be an Affiliate of the Stockholder shall be deemed to be an Affiliate of the Stockholder for purposes of this Agreement while such person is an Affiliate of the Stockholder regardless of whether such person was such an Affiliate on the date hereof. 13. Section Specific Performance. Each of the parties hereto recognizes and acknowledges that this Agreement is an integral part of the transactions contemplated in the Transaction Agreements, that the Company would not have entered into the Transaction Agreements unless this Agreement was executed and that a breach by a party of any covenants or agreements contained in this Agreement will cause the other party to sustain injury for which it would not have an adequate remedy at law for money damages. Therefore each of the parties hereto agrees that in the event of any such breach, the aggrieved party shall be entitled to the remedy of specific performance of such covenants and agreements and preliminary and permanent injunctive and other equitable relief in addition to any other remedy to which it may be entitled, at law or in equity, and the parties hereto further agree to waive any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief. 14. Section Amendment and Modification. This Agreement may be amended, modified and supplemented only by written agreement of the Stockholder and the Company. 15. Section Notices. All notices, requests, demands and other communications required or permitted shall be made in writing by hand-delivery, registered first-class mail, telex, telecopier or air courier guaranteeing overnight delivery: (a) If to the Stockholder, to: Henkel KGaA Henkelstrasse 67, Postfach 1100 D-4000 Dusseldorf 1, Germany Attention: General Counsel (with a copy to:) Cleary, Gottlieb, Steen & Hamilton One Liberty Plaza New York, New York 10006 Attention: William A. Groll or to such other person or address as the Stockholder shall furnish to the Company; (b) If to the Company, to: Ecolab Inc. Ecolab Center St. Paul, Minnesota 55102 Attention: General Counsel (with a copy to:) Skadden, Arps, Slate, Meagher & Flom (Illinois) 333 West Wacker Drive Chicago, Illinois 60606 Attention: Charles W. Mulaney, Jr. or to such other person or address as the Company shall furnish to the Stockholder in writing. All such notices, requests, demands and other communications shall be deemed to have been duly given; at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and on the next business day, if timely delivered to an air courier guaranteeing overnight delivery. 16. Section Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall fail to be in effect only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement or of any such provision. 17. Section Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, but except as otherwise provided for or permitted herein neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any party hereto without the prior written consent of the other party. 18. Section Governing Law. This Agreement and the legal relations among the parties hereto shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflicts of law doctrine. 19. Section Jurisdiction and Venue. Each of the Company and the Stockholder hereby agrees that any proceeding relating to this Agreement shall be brought in the state of Delaware. Each of the Company and the Stockholder hereby consents to personal jurisdiction in any such action brought in any such Delaware court, consents to service of process by registered mail made upon such party and such party's agent and waives any objection to venue in any such Delaware court or to any claim that any such Delaware court is an inconvenient forum. 20. Section Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 21. Section Headings. The headings of the Sections of this Agreement are inserted for convenience only and shall not constitute a part hereof or affect in any way the meaning or interpretation of this Agreement. 22. Section Entire Agreement. Upon consummation of the Transaction, this Agreement and the Transaction Agreements will set forth the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein, and supersede all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto. 23. Section Third Parties. Except as specifically set forth or referred to herein, nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or corporation, other than the parties hereto and their successors or assigns, any rights or remedies under or by reason of this Agreement. 24. Section Tax Reporting. The Stockholder agrees to provide the Company with, and shall retain, for the time periods prescribed by law, all of the information concerning the Stockholder and its Subsidiaries which is reasonably required to be included in the Company's tax returns as a result of the Stockholder's direct and/or indirect ownership of Common Stock. The Company and the Stockholder agree that the Stockholder shall have no liability under this Section 24 if the Stockholder shall have retained the same type and amount of information concerning transactions and relationships between the Stockholder and its Subsidiaries on the one hand and the Company on the other hand as it retains concerning transactions and relationships between the Stockholder and its Subsidiaries on the one hand and Henkel of America Inc. and its Subsidiaries on the other hand as prescribed by law. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as of the day and year first above written. HENKEL KGAA ECOLAB INC. By: By: --------------------------- --------------------------- Name: Name: Title: Title: Exhibit A --------- REGISTRATION RIGHTS ------------------- Capitalized terms used herein shall have the meanings defined in the Stockholder's Agreement. 1. "Piggyback" Registration. Whenever the Company proposes to file a registration statement relating to any of its capital stock under the Securities Act (other than a registration statement required to be filed in respect of employee benefit plans of the Company on Form S-8 or any similar form from time to time in effect or any registration statement on Form S-4 or similar successor form), the Company shall, at least twenty-one days (or if such twenty-one day period is not practicable, then a reasonable shorter period which shall not be less than seven days) prior to such filing, give written notice of such proposed filing to the Stockholder. Upon receipt by the Company not more than seven days (unless the notice given to the Stockholder pursuant to the previous sentence is less than ten days, in which case such seven-day period shall be shortened to five days) after such notice of a written request from the Stockholder for registration of Shares (i) the Company shall include such Shares in such registration statement or in a separate registration statement concurrently filed, and shall use all reasonable efforts to cause such registration statement to become effective with respect to such Shares, unless the managing underwriter therefor concludes in its reasonable judgment that compliance with this clause (i) would materially adversely effect such offering, in which event the Company shall cause such Shares to be registered under a separate registration statement a limited period of time thereafter, which in no event shall be more than 60 days and (ii) if such proposed registration is in connection with an underwritten offering of Common Stock, upon request of the Stockholder, the Company shall use all reasonable efforts to cause the managing underwriter therefor to include in such offering the Shares as to which the Stockholder requests such inclusion, on terms and conditions comparable to those of the securities offered on behalf of the Company, unless the managing underwriter therefor concludes in its reasonable judgment that the inclusion of such Shares in such offering would materially adversely affect such offering. 2. Demand Registration. If the Company shall receive at any time or from time to time a written request from the Stockholder requesting the Company to register under the Securities Act on Form S-3 (or if the Company is not eligible to use Form S-3, then on Form S-1 or S-2), or any other similar Form then in effect, securities representing at least one percent (1%) of the Company's then outstanding Common Stock, the Company agrees that it will use all reasonable efforts to cause the prompt registration of all Shares as to which such request is made. The Company may postpone for a limited time, which in no event shall be longer than 90 days, compliance with a request for registration pursuant to this Section 2 if (i) such compliance would materially adversely affect (including, without limitation, through the premature disclosure thereof) a proposed financing, reorganization, recapitalization, merger, consolidation or similar transaction or (ii) the Company is conducting a public offering of capital stock and the managing underwriter concludes in its reasonable judgment that such compliance would materially adversely affect such offering. Notwithstanding anything in this Section 2 to the contrary, the Company shall not be required to: (a) comply with more than two (2) requests of the Stockholder pursuant to this Section 2 in any twelve (12) month period or (b) prepare or cause to be prepared audited financial statements of the Company other than those prepared in the normal course of the Company's business at its fiscal year end. Any underwriter selected by the Stockholder to act as such in connection with a registration pursuant to this Section 2 shall be reasonably acceptable to the Company. 3. General Provisions: The Company will use all reasonable efforts to cause any registration statement referred to in Sections 1 and 2 to become effective and to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the earlier of 45 days from the effective date of the registration statement and the date the Stockholder completes its distribution of Shares. The Company will use all reasonable efforts to effect such qualifications under applicable Blue Sky or other state securities laws as may be reasonably requested by the Stockholder (provided that the Company shall not be obligated to file a general consent to service of process or qualify to do business as a foreign corporation or otherwise subject itself to taxation in any jurisdiction solely for the purpose of any such qualification) to permit or facilitate such sale or other distribution. The Company will cause the Shares to be listed on the principal stock exchange on which the shares of Common Stock are listed. 4. Information, Documents, Etc. Upon making a request for registration pursuant to Sections 1 or 2, the Stockholder shall furnish to the Company such information regarding its holdings and the proposed manner of distribution thereof as the Company may reasonably request and as shall be required in connection with any registration, qualification or compliance referred to herein. The Company agrees that it will furnish to the Stockholder the number of prospectuses, offering circulars or other documents, or any amendments or supplements thereto, incident to any registration, qualification or compliance referred to herein as the Stockholder from time to time may reasonably request. 5. Expenses. The Company will bear all expenses of registrations (other than underwriting discounts and commissions and brokerage commissions and fees, if any, payable with respect to Shares sold by the Stockholder and fees and expenses of counsel and any accountants for the Stockholder), including, without limitation, registration fees, printing expenses, expenses of compliance with Blue Sky or other state securities laws, and legal and audit fees incurred by the Company in connection with such registration and amendments or supplements in connection therewith. 6. Cooperation. In connection with any registration of Shares, the Company agrees to: (a) enter into such customary agreements (including an underwriting agreement containing such representations and warranties by the Company and such other terms and provisions, including indemnification provisions, as are customarily contained in underwriting agreements for comparable offerings and, if no underwriting agreement is entered into, an indemnification agreement on such terms as is customary in transactions of such nature) and take all such other actions as the Stockholder or the underwriters, if any, participating in such offering and sale may reasonably request in order to expedite or facilitate such offering and sale; (b) furnish, at the request of the Stockholder or any underwriters participating in such offering and sale, (i) a comfort letter or letters, dated the date of the final prospectus with respect to the Shares and/or the date of the closing for the sale of the Shares from the independent certified public accountants of the Company and addressed to the Stockholder and any underwriters participating in such offering and sale, which letter or letters shall state that such accountants are independent with respect to the Company within the meaning of Rule 1.01 of the Code of Professional Ethics of the American Institute of Certified Public Accountants and shall address such matters as the Stockholder and underwriters may reasonably request and as may be customary in transactions of a similar nature for similar entities and (ii) an opinion, dated the date of the closing for the sale of the Shares, of the counsel representing the Company with respect to such offering and sale (which counsel may be the General Counsel of the Company or other counsel reasonably satisfactory to the Stockholder), addressed to the Stockholder and any such underwriters, which opinion shall address such matters as they may reasonably request and as may be customary in transactions of a similar nature for similar entities; (c) make available for inspection by the Stockholder, the underwriters, if any, participating in such offering and sale (which inspecting underwriters shall, if reasonably possible, be limited to any manager or managers for such participating underwriters), the counsel for the Stockholder, one accountant or accounting firm retained by the Stockholder and any such underwriters, or any other agent retained by the Stockholder or such underwriters, all financial and other records, corporate documents and properties of the Company, and supply such additional information, as they shall reasonably request; provided that any such party shall keep the contents thereof confidential in the manner prescribed by Section 8.02 of the Master Agreement. 7. Action to Suspend Effectiveness; Supplement to Registration Statement. (a) The Company will notify the Stockholder and its counsel promptly of (i) any action by the Commission to suspend the effectiveness of the registration statement covering the Shares or the institution or threatening of any proceeding for such purpose (a "stop order") or (ii) the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. Immediately upon receipt of any such notice, the Stockholder shall cease to offer or sell any Shares pursuant to the registration statement in the jurisdiction to which such stop order or suspension relates. The Company will use all reasonable efforts to prevent the issuance of any such stop order or the suspension of any such qualification and, if any such stop order is issued or any such qualification is suspended, to obtain as soon as possible the withdrawal or revocation thereof, and will notify the Stockholder and its counsel at the earliest practicable date of the date on which the Stockholder may offer and sell Shares pursuant to the registration statement. (b) Within the applicable period referred to in Section 3 following the effectiveness of a registration statement filed pursuant to these registration rights, the Company will notify the Stockholder and its counsel promptly of the occurrence of any event or the existence of any state of facts that, in the judgment of the Company, should be set forth in such registration statement. Immediately upon receipt of such notice, the Stockholder shall cease to offer or sell any Shares pursuant to such registration statement, cease to deliver or use such registration statement and, if so requested by the Company, return to the Company, at its expense, all copies (other than permanent file copies) of such registration statement. The Company will, as promptly as practicable, take such action as may be necessary to amend or supplement such registration statement in order to set forth or reflect such event or state of facts. The Company will furnish copies of such proposed amendment or supplement to the Stockholder and its counsel and will not file or distribute such amendment or supplement without the prior consent of the Stockholder, which consent shall not be unreasonably withheld. -----END PRIVACY-ENHANCED MESSAGE-----