Document:

Exhibit 4.2

 

EXECUTION VERSION

 

 

 

ECOLAB INC.

 

$500,000,000 2.375% Notes due 2014

$1,250,000,000 3.000% Notes due 2016

$1,250,000,000 4.350% Notes due 2021

$750,000,000 5.500% Notes due 2041

 

SECOND SUPPLEMENTAL INDENTURE

 

Dated as of December 8, 2011

 

to

 

Amended and Restated Indenture dated as of January 9, 2001

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

Series Trustee

 

and

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (formerly known as The Bank of New York Trust Company, N.A., as successor in interest to J.P. Morgan Trust Company, National Association and Bank One, National Association)

 

Original Trustee

 

 

 

 

This SECOND SUPPLEMENTAL INDENTURE (this “Second Supplemental Indenture”) dated as of December 8, 2011,  among ECOLAB INC., a Delaware corporation (the “Company”),  WELLS FARGO BANK, NATIONAL ASSOCIATION (the “Series Trustee” and for purposes of this Second Supplemental Indenture and the Notes, the “Trustee”) and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (formerly known as The Bank of New York Trust Company, N.A.) (the “Original Trustee”).

 

RECITALS

 

WHEREAS, the Company has heretofore executed and delivered to the Original Trustee an amended and restated indenture, dated as of January 9, 2001 (the “Existing Indenture,” and, together with this Second Supplemental Indenture, the “Indenture”) providing for the issuance by the Company from time to time of its debt securities to be issued in one or more series;

 

WHEREAS, the Company, in the exercise of the power and authority conferred upon and reserved to it under the provisions of the Existing Indenture and pursuant to appropriate resolutions of the Board of Directors, has duly determined to make, execute and deliver to the Series Trustee this Second Supplemental Indenture to the Existing Indenture in order to issue new series of debt securities to be designated as the “2.375% Notes due 2014” (the “2014 Notes”), the “3.000% Notes due 2016” (the “2016 Notes”), the “4.350% Notes due 2021” (the “2021 Notes”) and the “5.500% Notes due 2041” (the “2041 Notes” and, together with the 2014 Notes, the 2016 Notes and the 2021 Notes, the “Notes”), and to set forth the terms that will be applicable thereto and the forms thereof;

 

WHEREAS, the Company has duly determined to appoint Wells Fargo Bank, National Association as Series Trustee, Security Registrar and Paying Agent under the Indenture with respect to the Notes (but only with respect to the Notes) and Wells Fargo Bank National Association is willing to accept such appointment with respect to the Notes;

 

WHEREAS, the Company is entering into this Second Supplemental Indenture with the Original Trustee and the Series Trustee to evidence and provide for the acceptance of appointment thereunder by the Series Trustee with respect to the Notes (but only with respect to the Notes), to add to or change any of the provisions of the Existing Indenture as shall be necessary to provide for or facilitate the administration of the trusts thereunder by more than one Trustee pursuant to Section 8.1(j) and Section 8.1(k) of the Existing Indenture and to make certain amendments to the Existing Indenture to expressly permit the appointment of the Series Trustee as Trustee for the Notes (but only with respect to the Notes);

 

WHEREAS, the Company has requested that the Original Trustee enter into this Second Supplemental Indenture in connection with the foregoing amendments and the Company, for the sole and limited purpose of compliance with the requirements of Article VIII of the Existing Indenture, and in accordance with Section 8.4 and Section 11.5 of the Existing Indenture, has delivered an Officer’s Certificate and Opinion of Counsel to the Original Trustee;

 

WHEREAS, Sections 2.1, 2.3 and 8.1 of the Existing Indenture provide, among other things, that the Company and the Trustee may, without the consent of Holders, enter into indentures supplemental to the Existing Indenture to provide for specific terms applicable to any

 

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series of notes and to add to the covenants of the Company for the benefit of the Holders of each series of notes (and if such covenants are to be for the benefit of less than all series of notes, stating that such covenants are expressly being included solely for the benefit of such series);

 

WHEREAS, all things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Series Trustee or any Authenticating Agent and issued upon the terms and subject to the conditions set forth hereinafter and in the Indenture against payment therefor, the valid, binding and legal obligations of the Company and to make this Second Supplemental Indenture a valid, binding and legal agreement of the Company, have been done;

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

ARTICLE I

 

APPLICATION OF SECOND SUPPLEMENTAL INDENTURE
 AND CREATION OF NOTES

 

Section 1.01           Application of this Second Supplemental Indenture.

 

Notwithstanding any other provision of this Second Supplemental Indenture, pursuant to Section 8.1(d) of the Existing Indenture, the provisions of this Second Supplemental Indenture, including the covenants set forth herein, are expressly being included solely for the benefit of the Holders of the Notes.  The Notes constitute a series of notes as provided in Section 2.3 of the Existing Indenture.

 

Section 1.02           Effect of the Second Supplemental Indenture

 

(a)           With respect to the Notes only, the Existing Indenture shall be supplemented pursuant to Sections 2.1, 2.3 and 8.1 thereof to amend Section 8.1(k) of the Existing Indenture (regarding the appointment of a successor Trustee by entering into a supplemental indenture without the consent of the Holders) by replacing such section in its entirety with the following:

 

(k) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee or if other than the Person named as the “Trustee” in the first paragraph of this Indenture (or a successor to such Person pursuant to the applicable provisions of this Indenture) (for purposes of this Section 8.1(k), herein called the “Original Trustee”), the identity of a Trustee for such Securities, and, at the election of the Company, other Securities of any series to be issued thereafter pursuant to this Indenture (a “Series Trustee”), and, if not the Series Trustee, the identity of each Security Registrar, Paying Agent or Authenticating Agent with respect to such Securities, and such additions or changes to any provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11, it being understood that anything contained herein or in any Board Resolution, Officer’s Certificate or supplemental indenture to the contrary notwithstanding, that (i) nothing herein shall constitute such Trustees co-trustees of the same trust, (ii) each such Trustee shall be a trustee of a trust or trusts hereunder separate

 

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and apart from any trust or trusts hereunder administered by any other such Trustee, (iii) the Series Trustee shall have all the rights, powers, trusts, duties and obligations of the Original Trustee with respect to, and only with respect to, such Securities, (iv) the Original Trustee shall have no rights, powers, trusts, duties or obligations with respect to such Securities, (v) no Trustee hereunder shall have any liability for any acts or omissions of any other Trustee hereunder and (vi) no appointment of a Series Trustee shall become effective until the acceptance of the appointment by the Series Trustee in writing;

 

(a)           With respect to the Notes only, the Existing Indenture shall be supplemented pursuant to Sections 2.1, 2.3 and 8.1 thereof to amend Section 2.2 of the Existing Indenture (regarding the form of the Trustee’s certificate of authentication) by replacing such section in its entirety with the following:

 

Section 2.2 FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION. The Trustee’s certificate of authentication (a “CERTIFICATE OF  AUTHENTICATION”) on all Securities will be in substantially the following form:

 

“Date:

 

This is one of the Securities referred to in the within-mentioned Indenture.

 

	
 
    	
Wells   Fargo Bank, National Association, as Series Trustee
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Authorized Signatory”
    
				

 

If at any time an Authenticating Agent is appointed with respect to any series of Securities, then the Authenticating Agent’s certificate of authentication to be borne on the Securities of each such series will be substantially as follows:

 

“Date:

 

This is one of the Securities referred to in the within-mentioned Indenture.

 

	
 
    	
[                             ], as Authenticating Agent
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Authorized Officer”
    
				

 

Section 1.03           Designation and Amount of Notes.

 

The 2014 Notes shall be known and designated as the “2.375% Notes due 2014,” the 2016 Notes shall be known and designated as the “3.000% Notes due 2016,” the 2021 Notes

 

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shall be known and designated as the “4.350% Notes due 2021,” and the 2041 Notes shall be known and designated as the “5.500% Notes due 2041.”  The Notes shall be unsecured and unsubordinated Obligations of the Company.  The initial maximum aggregate principal amount of Notes that may be authenticated and delivered under this Second Supplemental Indenture shall not exceed $500,000,000 of the 2014 Notes, $1,250,000,000 of the 2016 Notes, $1,250,000,000 of the 2021 Notes and $750,000,000 of the 2041 Notes, except in each case for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of, Notes pursuant to Sections 2.8, 2.9, 2.11 and 12.3 of the Existing Indenture.  Notwithstanding the foregoing, the Company may from time to time, without giving notice to or seeking the consent of the Holders of the Notes of any series, issue debt securities having the same terms (except for the issue date, and, in some cases, the public offering price and the first Interest Payment Date) and ranking equally and ratably with any series of Notes (“Additional Notes”).  The applicable series of Notes and Additional Notes shall together constitute one series for purposes of the Existing Indenture and this Second Supplemental Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase.

 

 

Section 1.04           Terms; Denominations; Form of Security.

 

(a)           The Notes are issuable in fully registered form as Registered Global Securities without coupons, in denominations of $2,000 or any amount in excess thereof which is an integral multiple of $1,000, and shall be in substantially the form of Exhibit A hereto.  The Depository Trust Company shall act as Depositary for the Notes.  Notwithstanding the foregoing, the Notes shall be issued as Registered Securities in definitive form to each Person that the Depositary identifies as the beneficial owner of the Notes represented by the Registered Global Securities upon surrender by the Depositary of the Registered Global Security if:

 

(i)            the Depositary notifies us that it is no longer willing or able to act as a depositary for such Registered Global Security or ceases to be a clearing agency registered under the Exchange Act, and the Company shall not have appointed a successor Depositary within 90 days of that notice or becoming aware that the Depositary is no longer so registered;

 

(ii)           an event of default has occurred and is continuing, and the Depositary requests the issuance of certificated notes; or

 

(iii)          the Company determines not to have the Notes represented by a Registered Global Security.

 

(b)           The terms and provisions contained in the forms of Note attached hereto as Exhibit A shall constitute, and are hereby expressly made, a part of this Second Supplemental Indenture and the Company, by its execution and delivery of this Second Supplemental Indenture, expressly agrees to such terms and provisions and to be bound thereto.  Any of the Notes may have such letters, numbers or other marks of identification and such notations, legends and endorsements as the officers executing the same may approve (execution thereof to be conclusive evidence of such approval) and are not inconsistent with the provisions of the Indenture (and which do not affect the rights, duties or immunities of the Original Trustee or the Series Trustee), or as may be required to comply with any law or with any rule or regulation

 

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made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Notes may be listed.

 

Section 1.05           Payment of Principal and Interest,

 

(a)           The Notes shall mature, and the principal of the Notes shall be due and payable in U.S. Dollars to the Holders thereof, together with all accrued and unpaid interest thereon, as follows: on December 8, 2014 for the 2014 Notes (the Stated Maturity of principal of the 2014 Notes), on December 8, 2016 for the 2016 Notes (the Stated Maturity of principal of the 2016 Notes), on December 8, 2021 for the 2021 Notes (the Stated Maturity of principal of the 2021 Notes) and on December 8, 2041 for the 2041 Notes (the Stated Maturity of principal of the 2041 Notes)

 

(b)           The 2014 Notes shall bear interest at 2.375% per annum, the 2016 Notes shall bear interest at 3.000% per annum, the 2021 Notes shall bear interest at 4.350% per annum and the 2041 Notes shall bear interest at 5.500% per annum, in each case from and including December 8, 2011, or from the most recent Interest Payment Date on which interest has been paid or provided for, until the principal thereof becomes due and payable, and on any overdue principal and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum.  Interest shall be calculated on the basis of a 360-day year comprised of twelve 30-day months.  Interest on the Notes shall be payable semi-annually in arrears in U.S. Dollars on June 8 and December 8 of each year, commencing on June 8, 2012 (the Interest Payment Dates with respect to the Notes).  Payments of interest shall be made to the Person in whose name a Note (or predecessor Note) is registered (which shall initially be the Depositary) at the close of business on the May 24 or November 23, as the case may be, next preceding such Interest Payment Date (the Regular Record Date with respect to the Notes).

 

(c)           For so long as the Notes are represented by one or more Registered Global Securities, all payments of principal and interest shall be made by the Company through the Paying Agent by wire transfer of immediately available funds in U.S. Dollars to the Depositary or its nominee, as the case may be, as the registered owner of the Registered Global Securities representing such Notes.  In the event that definitive Notes shall have been issued, all payments of principal and interest shall be made by the Company through the Paying Agent by wire transfer of immediately available funds in U.S. Dollars to the accounts of the registered Holders thereof; provided, that the Company may elect to make such payments at the office of the Paying Agent in The City of Minneapolis; and provided  further, that the Company may at its option pay interest by check to the registered address of each Holder of a definitive Note.

 

(d)           The Notes shall trade in the Depositary’s Same-Day Funds Settlement System until Stated Maturity (or until they are subject to acceleration pursuant to Article V of the Existing Indenture) and secondary market trading activity in the Notes may be required by the Depositary to settle in immediately available funds.

 

(e)           The Notes are subject to redemption by the Company in whole or in part in the manner described herein.

 

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Section 1.06           Sinking Fund.

 

The Notes are not subject to any sinking fund.

 

Section 1.07           Defeasance and Covenant Defeasance.

 

The defeasance and covenant defeasance provisions of Article X of the Existing Indenture will apply to the Notes.

 

Section 1.08           Tax Matters.

 

The Company will not pay additional amount on the Notes held by Non-U.S. Persons in respect of any tax, assessment or governmental change withheld or deducted.

 

ARTICLE II

 

DEFINITIONS

 

Section 2.01           Definitions.

 

(a)           All capitalized terms used herein and not otherwise defined below shall have the meanings ascribed thereto in the Existing Indenture.

 

(b)           The following terms for purposes of the Trust Indenture Act shall have the following meanings:

 

“indenture trustee” or “institutional trustee” shall mean the Series Trustee and not the Original Trustee.

 

“indenture securities” means the Notes.

 

“indenture security holder” means a Holder of the Notes.

 

“indenture to be qualified” means this Second Supplemental Indenture.

 

(c)           The following are definitions used in this Second Supplemental Indenture and to the extent that a term is defined both herein and in the Existing Indenture, the definition in this Second Supplemental Indenture shall govern with respect to the Notes.

 

“Attributable Debt” in respect of a Sale and Leaseback Transaction means, as of any particular time, the present value (discounted at the rate of interest implicit in the terms of the lease involved in the Sale and Leaseback Transaction, as determined in good faith by the Company) of the obligation of the lessee thereunder for net rental payments (excluding, however, any amounts required to be paid by such lessee, whether or not designated as rent or additional rent, on account of maintenance and repairs, services, insurance, taxes, assessments, water rates and similar charges or any amounts required to be paid by such lessee thereunder contingent upon monetary inflation or the amount of sales, maintenance and repairs, insurance, taxes, assessments, water rates or similar charges) during the remaining term of such lease

 

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(including any period for which such lease has been extended or may, at the option of the lessor, be extended).

 

“Below Investment Grade Rating Event” means the rating on the applicable series of Notes is lowered by each of the Rating Agencies and the Notes of such series are rated below Investment Grade by each of the Rating Agencies on any day within the 60-day period (which 60-day period will be extended so long as the rating of the Notes of such series is under publicly announced consideration for a possible downgrade by any of the Rating Agencies) after the earlier of (1) the occurrence of a Change of Control and (2) public notice of the occurrence of a Change of Control or the Company’s intention to effect a Change of Control; provided that a Below Investment Grade Rating Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event for purposes of the definition of Change of Control Repurchase Event) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Series Trustee in writing at its request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Below Investment Grade Rating Event).

 

“Change of Control” means the occurrence of any of the following:

 

(1)           the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the Company’s assets and those of its Subsidiaries, taken as a whole, to any person, other than the Company or one of its Subsidiaries;

 

(2)           the first day on which a majority of the members of the Company’s Board of Directors are not Continuing Directors; or

 

(3)           the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any person, other than the Company or one or more of its Wholly-Owned Subsidiaries, becomes the beneficial owner, directly or indirectly, of more than 50% of the then outstanding number of shares of the Company’s Voting Stock.

 

Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (1) the Company becomes a direct or indirect Wholly-Owned Subsidiary of a holding company and (2) (A) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Company’s Voting Stock immediately prior to that transaction or (B) immediately following that transaction no person (other than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or indirectly of more than 50% of the Voting Stock of such holding company.

 

The term “person,” as used in this definition, has the meaning given thereto in Section 13(d)(3) of the Exchange Act.

 

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“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event.

 

“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term (as measured from the date of redemption) of the series of Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Notes.

 

“Comparable Treasury Price” means, with respect to any Redemption Date, (i) the average of four Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Quotation Agent obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations, or (iii) if only one Reference Treasury Dealer Quotation is received, such quotation.

 

“Consolidated Net Tangible Assets” means the aggregate amount of assets (less applicable reserves and other properly deductible items) of the Company and its Restricted Subsidiaries after deducting therefrom (a) all goodwill, tradenames, trademarks, patents, unamortized debt discount and expense and other like intangibles and (b) all current liabilities (excluding any current liabilities for money borrowed having a maturity of less than 12 months but by its terms being renewable or extendible beyond 12 months from such date at the option of the borrower), all as reflected in the Company’s latest audited consolidated balance sheet contained in the Company’s most recent annual report to its stockholders prior to the time as of which “Consolidated Net Tangible Assets” shall be determined.

 

“Continuing Director” means, as of any date of determination, any member of the Company’s Board of Directors who (1) was a member of the Company’s Board of Directors on December 8, 2011; or (2) was nominated for election, elected or appointed to the Company’s Board of Directors with the approval of a majority of the Continuing Directors who were members of the Company’s Board of Directors at the time of such nomination, election or appointment (either by a specific vote or by approval of the Company’s proxy statement in which such member was named as a nominee for election as a director).

 

“Corporate Trust Office” means the office of the Series Trustee at which the corporate trust business of the Series Trustee is, at any particular time, principally administered, which office is, as of the date on which this Second Supplemental Indenture is dated, located in Minneapolis, Minnesota.

 

	
c/o
    	
 
    	
Wells   Fargo Bank, National Association
    
	
 
    	
 
    	
MAC   N9311-110
    
	
 
    	
 
    	
625   Marquette Avenue
    
	
 
    	
 
    	
Minneapolis,   Minnesota 55479
    
	
 
    	
 
    	
Attention:   Ecolab Administrator
    

 

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“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating categories of Moody’s) and a rating of BBB- or better by S&P (or its equivalent under any successor rating categories of S&P) or the equivalent investment grade credit rating from any additional Rating Agency or Rating Agencies selected by the Company.

 

“Moody’s” means Moody’s Investors Service Inc., a subsidiary of Moody’s Corporation, and its successors.

 

“Operating Property” means any manufacturing or processing plant, warehouse or distribution center, together with the land upon which it is situated located within the United States or in Canada and owned and operated as of the date of this Second Supplemental Indenture or thereafter by the Company or any Restricted Subsidiary and having a net book value on the date as of which the determination is being made of more than 1.0% of Consolidated Net Tangible Assets other than property which, in the opinion of the Board of Directors of the Company, is not of material importance to the total business conducted by the Company and its Restricted Subsidiaries taken as a whole.

 

“Quotation Agent” means any Reference Treasury Dealer appointed by the Company.

 

“Rating Agency” means (1) each of Moody’s and S&P; and (2) if either Moody’s or S&P ceases to rate the applicable series of Notes or fails to make a rating of such series of Notes publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Company as a replacement agency for Moody’s or S&P, or both, as the case may be.

 

“Reference Treasury Dealer” means (i) each of J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated (or their respective affiliates that are Primary Treasury Dealers) and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer (a “Primary Treasury Dealer”), the Company shall substitute therefor another Primary Treasury Dealer, and (ii) two other Primary Treasury Dealers selected by the Company.

 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.

 

“Restricted Subsidiaries” means all Subsidiaries other than Unrestricted Subsidiaries.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.

 

“Treasury Rate” means, with respect to any Redemption Date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

 

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“Unrestricted Subsidiaries” means (1) any Subsidiary substantially all of whose physical properties are located, or substantially all of whose business is carried on, outside the United States and Canada, (2) any finance Subsidiary and (3) any Subsidiary of an Unrestricted Subsidiary.  In addition, the Board of Directors may designate any other Subsidiary of the Company (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary owns any capital stock of, or owns or holds any mortgage on any Operating Property of, the Company or any Restricted Subsidiary of the Company; provided that the Subsidiary to be so designated has total assets at the time of such designation of $5 million or less.

 

“Voting Stock” of any specified Person as of any date means the capital stock of such Person that is at the time entitled to vote generally in the election of the board of directors of such Person.

 

“Wholly-Owned Subsidiary” of any specified Person means a Subsidiary all of whose Voting Stock is owned by the Company or a Wholly-Owned Subsidiary, the accounts of which are consolidated with those of the Company in its consolidated financial statements.

 

Section 2.02           Other Definitions.

 

	
Term
    	
 
    	
Defined in Section
    
	
 
    	
 
    	
 
    
	
“Additional   Notes”
    	
 
    	
1.03
    
	
“Debt”
    	
 
    	
5.01
    
	
“mortgage”
    	
 
    	
5.01
    

 

ARTICLE III

 

OPTIONAL REDEMPTION

 

The Company may redeem any series of Notes at any time or from time to time, in whole or in part, in each case, at the Company’s option at a Redemption Price equal to the greater of:

 

(i)                                     100% of the principal amount of the Notes to be redeemed on the Redemption Date; and

 

(ii)                                  as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed on that Redemption Date (not including any portion of those payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 30 basis points for the 2014 Notes, 35 basis points for the 2016 Notes, 35 basis points for the 2021 Notes and 40 basis points for the 2041 Notes,

 

plus, in each case, accrued and unpaid interest to the Redemption Date.  Notwithstanding the foregoing, installments of interest on the Notes that are due and payable on Interest Payment Dates falling on or prior to a Redemption Date will be payable on the Interest Payment Date to

 

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the registered Holders as of the close of business on the relevant Regular Record Date according to the Notes and the Indenture.

 

Notice of any redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each registered Holder of the series of Notes to be redeemed by the Company or by the trustee on its behalf; provided that notice of redemption may be mailed more than 60 days prior to the Redemption Date if the notice is issued in connection with a defeasance of such Notes or a satisfaction and discharge of such Notes.

 

If less than all of the Notes of a series are to be redeemed, the Notes to be redeemed shall be selected by lot by the Trustee.

 

Except as otherwise set forth in this Article III, the terms and conditions upon which and the manner in which the Notes may be redeemed by the Company pursuant to this Article III are governed by the provisions of Article XII of the Existing Indenture; provided, however, that Section 12.5 of Article XII of the Existing Indenture shall not apply to the Notes.

 

ARTICLE IV

 

CHANGE OF CONTROL

 

Section 4.01           Change of Control.

 

(a)           Upon the occurrence of a Change of Control Repurchase Event, unless all Notes of a series have been called for redemption pursuant to Article III hereof, each Holder of Notes of that series shall have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes of such series at a repurchase price in cash equal to 101% of the aggregate principal amount of Notes of such series repurchased plus any accrued and unpaid interest on the Notes of such series repurchased to the date of repurchase (the “Change of Control Payment”).

 

(b)           Within 30 days following any Change of Control Repurchase Event or, at the Company’s option, prior to any Change of Control, but after the public announcement of the transaction or transactions that constitutes or may constitute a Change of Control, the Company shall mail, or cause to be mailed, a notice (a “Change of Control Offer”) to each Holder, with a copy to the Series Trustee, describing the transaction or transactions that constitute or may constitute the Change of Control Repurchase Event and specifying:

 

(i)            that the Change of Control Offer is being made pursuant to this Section 4.01 and that all Notes of such series tendered will be accepted for payment;

 

(ii)           the Change of Control Payment and the purchase date, which shall be a Business Day no earlier than 30 days and no later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”);

 

(iii)          the CUSIP numbers for the Notes of such series;

 

(iv)          that any Note of such series not tendered will continue to accrue interest;

 

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(v)           that, unless the Company defaults in the payment of the Change of Control Payment, all Notes of such series accepted for payment pursuant to the Change of Control Offer will cease to accrue interest after the Change of Control Payment Date;

 

(vi)          that Holders electing to have any Notes of such series purchased pursuant to a Change of Control Offer will be required to surrender such Notes to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

 

(vii)         that Holders will be entitled to withdraw their election referred to in clause (vi) if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes of such series delivered for purchase, and a statement that such Holder is withdrawing his election to have such Notes purchased;

 

(viii)        that Holders whose Notes of such series are being purchased only in part will be issued new Notes of such series equal in principal amount to the unpurchased portion of the Notes of such series surrendered, which unpurchased portion will be equal to $2,000 in principal amount or an integral multiple of $1,000 in excess thereof; and

 

(ix)           if the notice is mailed prior to the date of consummation of the Change of Control, that the Change of Control Offer is conditioned on the Change of Control Repurchase Event occurring on or prior to the payment date specified in the notice.

 

(c)           The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes of such series as a result of a Change of Control Repurchase Event.  To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.01, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.01 by virtue of such conflict.

 

(d)           On the Change of Control Payment Date, the Company will, to the extent lawful:

 

(i)            accept for payment all Notes of such series or portions thereof (in integral multiples of $1,000) properly tendered pursuant to the Change of Control Offer;

 

(ii)           deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes of such series or portions of such Notes properly tendered; and

 

(iii)          deliver or cause to be delivered to the Series Trustee the Notes of such series properly accepted, together with an Officer’s Certificate stating the aggregate principal amount of Notes of such series or portions of such Notes being purchased by the Company.

 

12

 

(e)           The Paying Agent will promptly deliver to each Holder of Notes of such series properly tendered the Change of Control Payment for such Notes, and the Series Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note of such series equal in principal amount to any unpurchased portion of such Notes surrendered, if any; provided that each new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.

 

(f)            The Company shall not be required to make a Change of Control Offer upon a Change of Control Repurchase Event if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.01 applicable to a Change of Control Offer made by the Company and purchases all Notes of such series properly tendered and not withdrawn under such Change of Control Offer.

 

ARTICLE V

 

COVENANTS

 

The covenants set forth in this Article V shall be applicable to the Company in addition to the covenants in Article III of the Existing Indenture, which shall in all respects be applicable in respect of the Notes; provided that the covenant contained in Section 3.7 of the Existing Indenture shall not be applicable to the Notes.

 

Section 5.01           Restrictions on Liens.

 

The Company will not, and will not permit any Restricted Subsidiary to, issue, assume or guarantee any indebtedness for money borrowed (herein referred to as “Debt”) if such Debt is secured by any mortgage, security interest, pledge, lien or other encumbrance (herein referred to as a “mortgage”) upon any Operating Property of the Company or any Restricted Subsidiary or any shares of stock or Debt of any Restricted Subsidiary, whether owned at the date of the issuance of the Notes or thereafter acquired, without effectively securing the Notes equally and ratably with such Debt for at least the period such other Debt is so secured unless, after giving effect thereto, the aggregate amount of all Debt so secured (not including Debt permitted in clauses (1) through (7) in the following sentence), together with all Attributable Debt in respect of Sale and Leaseback Transactions involving Operating Properties pursuant to clause (2) of Section 5.02 in existence at such time would not exceed 15% of Consolidated Net Tangible Assets.

 

The foregoing restriction does not apply to, and therefore shall be excluded in computing secured Debt for the purpose of such restriction, Debt secured by:

 

(1)           mortgages on Operating Property, shares of stock or Debt of any entity existing at the time such entity becomes a Restricted Subsidiary, provided that such mortgages are not incurred in anticipation of such entity’s becoming a Restricted Subsidiary;

 

(2)           mortgages on Operating Property, shares of stock or Debt existing at the time of acquisition thereof by the Company or a Restricted Subsidiary or mortgages thereon to secure the payment of all or any part of the purchase price thereof, or

 

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mortgages on Operating Property, shares of stock or Debt to secure any Debt incurred prior to, at the time of, or within 180 days after, the latest of the acquisition thereof or, in the case of Operating Property, the completion of construction, the completion of improvements or the commencement of substantial commercial operation of such Operating Property for the purpose of financing all or any part of the purchase price thereof, such construction or the making of such improvements;

 

(3)           mortgages to secure Debt owing to the Company or to a Restricted Subsidiary;

 

(4)           mortgages on Operating Property, shares of stock or Debt existing at the date of the initial issuance of the Notes;

 

(5)           mortgages on Operating Property, shares of stock or Debt of a Person existing at the time such Person is merged into or consolidated with the Company or a Restricted Subsidiary or at the time of a sale, lease or other disposition of the properties of a Person as an entirety or substantially as an entirety to the Company or a Restricted Subsidiary, provided that such mortgage was not incurred in anticipation of such merger or consolidation or sale, lease or other disposition;

 

(6)           mortgages on Operating Property, shares of stock or Debt in favor of the United States or any state, territory or possession thereof (or the District of Columbia), or any department, agency, instrumentality or political subdivision of the United States or any state, territory or possession thereof (or the District of Columbia), to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any Debt incurred for the purpose of financing all or any part of the purchase price or the cost of constructing or improving the Operating Property subject to such mortgages; or

 

(7)           extensions, renewals or replacements, in whole or in part, of any mortgage referred to in the foregoing clauses (1) through (6), provided, however, that the principal amount of Debt secured thereby shall not exceed the principal amount of Debt so secured at the time of such extension, renewal or replacement.

 

Section 5.02           Restrictions on Sale and Leaseback; Transactions.

 

Sale and Leaseback Transactions by the Company or any Restricted Subsidiary with a third party of any Operating Property are prohibited (except for temporary leases for a term, including renewals, of not more than 60 months and except for leases between the Company and a Restricted Subsidiary or between Restricted Subsidiaries) unless the net proceeds of such Sale and Leaseback Transactions are at least equal to the fair market value (as determined in good faith by the Board of Directors of the Company) of the Operating Property to be leased and either:

 

(1)           the Company or such Restricted Subsidiary would (at the time of entering into such arrangement) be entitled, as described in clauses (1) through (7) of the second paragraph of Section 5.01, without equally and ratably securing the Notes, to issue, assume or guarantee Debt secured by a mortgage on such Operating Property;

 

14

 

(2)           the Attributable Debt of the Company and its Restricted Subsidiaries in respect of such Sale and Leaseback Transactions (other than such Sale and Leaseback Transactions as are referred to in clause (1) or (3) of this paragraph), plus the aggregate principal amount of Debt secured by mortgages on Operating Properties then outstanding (excluding any such Debt secured by mortgages described in clauses (1) through (7) of the second paragraph of Section 5.01) which do not equally and ratably secure the Notes, would not exceed 15% of Consolidated Net Tangible Assets; or

 

(3)           the Company, within 180 days after the sale or transfer, applies or causes a Restricted Subsidiary to apply an amount equal to the greater of the net proceeds of such sale or transfer or fair market value of the Operating Property (as determined in good faith by the Board of Directors of the Company) so sold and leased back at the time of entering into such Sale and Leaseback Transaction to

 

(a)           retire (other than any mandatory retirement, mandatory repayment or sinking fund payment or by payment at maturity) Notes or other Debt of the Company or a Restricted Subsidiary (other than Debt subordinated to the Notes) having a Stated Maturity more than 12 months from the date of such application or which is extendible at the option of the obligor thereon to a date more than 12 months from the date of such application or

 

(b)           purchase, construct or develop one or more Operating Properties (other than that involved in such Sale and Leaseback Transaction);

 

provided that the amount to be so applied pursuant to this clause (3) will be reduced by the principal amount of Notes delivered within 180 days after such sale or transfer to the Series Trustee for retirement and cancellation.

 

Section 5.03           Other Limitations.

 

(a)           Neither the Company nor any Restricted Subsidiary may transfer an Operating Property or shares of stock or Debt of a Restricted Subsidiary to an Unrestricted Subsidiary.

 

(b)           An Unrestricted Subsidiary may not be designated a Restricted Subsidiary unless, after giving effect thereto, the aggregate amount of all Debt of the Company and its Restricted Subsidiaries secured by mortgages which would otherwise be subject to the restrictions of Section 5.01 and the Attributable Debt in respect of all Sale and Leaseback Transactions pursuant to clause (2) under Section 5.02 in existence at such time does not at the time exceed 15% of Consolidated Net Tangible Assets.

 

15

 

ARTICLE VI

 

SERIES TRUSTEE, SECURITY REGISTRAR AND PAYING AGENT WITH RESPECT TO THE NOTES

 

Section 6.01           Appointment by the Company of Wells Fargo Bank, National Association as Series Trustee, etc.

 

Pursuant to the Existing Indenture as amended by this Second Supplemental Indenture, the Company hereby appoints Wells Fargo Bank, National Association as Series Trustee, Security Registrar and Paying Agent under the Indenture with respect to the Notes (but only with respect to the Notes) with all the rights, powers, trusts, duties and obligations of Trustee, Security Registrar and Paying Agent under the Indenture with respect to the Notes (but only with respect to the Notes) with like effect as if originally name as such in the Indenture.

 

Section 6.02           Acceptance by Wells Fargo Bank, National Association of Appointment of Series Trustee

 

Wells Fargo Bank, National Association hereby accepts its appointment as Series Trustee, Security Registrar and Paying Agent under the Indenture with respect to the Notes (but only with respect to the Notes) and accepts all of the rights, powers, trusts, duties and obligations of Trustee, Security Registrar and Paying Agent under the Indenture with respect to the Notes (but only with respect to the Notes), upon the terms and conditions set forth herein and therein, with like effect as if originally named as such in the Indenture.  Pursuant to the Existing Indenture, there shall continue to be vested in the Original Trustee all of its rights, powers, trusts, duties and obligations as Trustee under the Existing Indenture with respect to all of the series of securities as to which it has served and continues to serve as Trustee, and the Original Trustee shall have no rights, powers, trusts, duties and obligations with respect to the Notes.

 

Section 6.03           Eligibility of Series Trustee.

 

The Series Trustee hereby represents that it is qualified and eligible under the provisions of the Trust Indenture Act and Section 6.11 of the Existing Indenture to accept its appointment as Series Trustee with respect to the notes.

 

Section 6.04           Concerning the Series Trustee.

 

Neither the Original Trustee nor the Series Trustee assumes any duties, responsibilities or liabilities by reason of this Second Supplemental Indenture other than as set forth in the Existing Indenture and, in carrying out its responsibilities hereunder, each shall have all of the rights, powers, privileges, protections, duties and immunities which it possesses under the Existing Indenture.  The Original Trustee and the Series Trustee shall not constitute co-trustees of the same trust, and each of the Original Trustee and the Series Trustee shall be trustee of a trust or trusts under the Indenture separate and apart from any trust or trusts under the Indenture administered by the other trustee. The Original Trustee shall have no liability for any acts or omissions of the Series Trustee and the Series Trustee shall have no liability for any acts or omissions of the Original Trustee.

 

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References in this Second Supplemental Indenture to sections of the Existing Indenture that require or permit actions by the Original Trustee with respect to the Notes shall be deemed to require or permit actions only by the Series Trustee and the Original Trustee shall have no responsibility therefor.

 

ARTICLE VII

 

MISCELLANEOUS

 

Section 7.01           Trust Indenture Act Controls.

 

If any provision of this Second Supplemental Indenture limits, qualifies or conflicts with another provision that is required or deemed to be included in this Second Supplemental Indenture by the Trust Indenture Act, the required or deemed provision shall control.

 

Section 7.02           Notices.

 

Any notice or communication shall be in writing and delivered in person or mailed by first-class mail or sent by facsimile (with a hard copy delivered in person or by mail promptly thereafter) and addressed as follows:

 

	
if   to the Company:
    
	
 
    
	
Ecolab   Inc.
    
	
370   Wabasha Street North
    
	
St.   Paul, Minnesota 55102
    
	
Attention:   General Counsel
    
	
Facsimile:   (651) 293-2471
    
	
 
    
	
if   to the Series Trustee:
    
	
 
    
	
Wells   Fargo Bank, National Association
    
	
MAC   N9311-110
    
	
625   Marquette Avenue
    
	
Minneapolis,   Minnesota 55479
    
	
Attention:   Ecolab Administrator
    
	
Facsimile:   (612) 667-2160
    
	
 
    
	
if   to the Original Trustee:
    
	
 
    
	
The   Bank of New York Mellon Trust Company, N.A.
    
	
Two   North LaSalle Street
    
	
Suite 1020
    
	
Chicago, Illinois   60602
    
	
Attention:   Corporate Trust
    
	
Facsimile:   (312) 827-8542
    

 

17

 

The Company or the Series Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.

 

Notwithstanding any other provision of this Second Supplemental Indenture, the Existing Indenture or any Note, where this Second Supplemental Indenture, the Existing Indenture or any Note provides for notice of any event (including any notice of redemption or repurchase) to a Holder of a Global Security (whether by mail or otherwise), such notice shall be sufficiently given if given to DTC (or its designee) pursuant to the standing instructions from DTC or its designee, including by electronic mail in accordance with accepted practices at DTC.

 

Section 7.03           Governing Law.

 

THIS SECOND SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

Section 7.04           Multiple Originals.

 

The parties may sign any number of copies of this Second Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  One signed copy is enough to prove this Second Supplemental Indenture.

 

Section 7.05           Headings.

 

The headings of Articles and Sections of this Second Supplemental Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

 

Section 7.06           Not Responsible for Recitals or Issuance of Notes.

 

The recitals contained herein and in the Notes, except the Series Trustee’s certificates of authentication, shall be taken as the statements of the Company, and the Original Trustee and the Series Trustee do not assume any responsibility for their correctness.  The Original Trustee and the Series Trustee make no representation as to the validity or sufficiency of this Second Supplemental Indenture or of the Notes.  The Original Trustee and the Series Trustee shall not be accountable for the Company’s use of the proceeds from the Notes or for monies paid over to the Company pursuant to this Second Supplemental Indenture. All of the provisions contained in the Existing Indenture in respect of the rights, privileges, and immunities of the Trustee, including but not limited to its rights to be compensated, reimbursed and indemnified, shall be applicable to the Original Trustee in respect of this Second Supplemental Indenture as fully and with like force and effect as though set forth in full herein.

 

Section 7.07           Adoption, Ratification and Confirmation.

 

The Existing Indenture, as supplemented and amended by this Second Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed.

 

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IN WITNESS WHEREOF, the parties have caused this Second Supplemental Indenture to be duly executed as of the date first written above.

 

	
 
    	
ECOLAB   INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ching-Meng Chew
    
	
 
    	
Name:   Ching-Meng Chew
    
	
 
    	
Title:   Vice President and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION, as Series Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Richard Prokosch
    
	
 
    	
Name:   Richard Prokosch
    
	
 
    	
Title:   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE   BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Original Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Yolanda Ash
    
	
 
    	
Name:   Yolanda Ash
    
	
 
    	
Title:   Associate
    
				

 

Signature Page to Second Supplemental Indenture

 

 

EXHIBIT A-1

 

[Form of Face of Note]

 

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

CUSIP [      ]

 

ECOLAB INC.

 

2.375% NOTE DUE 2014

 

	
$[           ]
    	
 
    	
No.: [    ]
    

 

ECOLAB INC., a Delaware corporation (herein called the “Company”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $[           ] ([                                        ] DOLLARS) or such other Principal Amount as shall be set forth on Schedule I hereto on December 8, 2014 and to pay interest thereon at the rate of 2.375% per annum from December 8, 2011 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, on June 8 and December 8 of each year, commencing June 8, 2012 (each an “Interest Payment Date”), until the principal hereof is paid or made available for payment.

 

The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, except as provided in the Indenture hereinafter referred to, be paid to the Person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which will be the May 24 and November 23, as the case may be, immediately preceding each Interest Payment Date.  Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and either may be paid to the Person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on a Special Record Date for the 

 

 

payment of such defaulted interest to be fixed by the Series Trustee, notice whereof shall be given to the Holders not less than ten days prior to such Special Record Date, or may be paid at any time in any other lawful manner, all as more fully provided in the Indenture.  Payment of the principal of and interest on this Note will be made at the office or agency of the Company maintained for that purpose, or in such other office or agency as may be established by the Company pursuant to the Indenture (initially the principal corporate trust office of the Series Trustee in Minneapolis, Minnesota (the “Corporate Trust Office”)), in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company through the Paying Agent (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer to an account maintained by the Person entitled thereto as specified in the Security Register.  Payments of principal and interest at maturity will be made against presentation of this Note at the Corporate Trust Office (or such other office as may be established pursuant to the Indenture), by check or wire transfer.

 

Reference is hereby made to the further provisions of this Note set forth on the reverse side hereof, which further provisions shall for all purposes have the same effect as though fully set forth at this place.

 

Unless the Certificate of Authentication hereon has been executed by the Series Trustee or an Authenticating Agent under the Indenture referred to on the reverse hereof by the manual signature of one of its authorized officers, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

A-2

 

IN WITNESS WHEREOF, the Company has caused this Note to be signed in its name by the manual or facsimile signature of its Chief Executive Officer, its President or one of its Vice Presidents and attested by the manual or facsimile signature of its Secretary or one of its Assistant Secretaries.

 

	
Date:   
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ECOLAB   INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
ATTEST:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Secretary
    	
 
    	
 
    

 

 

Series Trustee’s Certificate of Authentication

 

This is one of the Notes described in the Indenture.

 

Dated:  

 

	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION, as Series Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized Signatory
    

 

A-2

 

[Form of Reverse of Note]

 

ECOLAB INC.

 

2.375% NOTE DUE 2014

 

1.                                       This Note is one of a duly authorized issue of securities of the Company designated as its 2.375% Notes due 2014 (the “Notes”) issued under an Amended and Restated Indenture dated as of January 9, 2001 (herein called, together with the First Supplemental Indenture dated as of February 8, 2008 and the Second Supplemental Indenture referred to below, the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.), as trustee, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Company, the Original Trustee (as defined below), the Series Trustee (as defined below) and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.

 

2.                                       This Note is one of the notes of the series designated on the face hereof, limited to an aggregate principal amount not to exceed $500,000,000, which amount may be increased at the option of the Company if in the future it determines that it may wish to sell additional Notes of this series, as specified in the Second Supplemental Indenture among the Company, The Bank of New York Mellon Trust Company, N.A., as original trustee (herein called the “Original Trustee,” which term includes any successor trustee thereto under the Indenture) and Wells Fargo Bank, National Association, as series trustee for the Notes (herein called the “Series Trustee,” which term includes any successor trustee thereto with respect to the Notes under the Indenture) and as Security Registrar and Paying Agent with respect to the Notes, dated as of December 8, 2011, establishing the form and certain terms of the Notes pursuant to the Indenture (the “Second Supplemental Indenture”). References herein to “this series” mean the series of Notes designated on the face hereof.

 

3.                                       The Company may redeem any series of Notes at any time or from time to time, in whole or in part, in each case, at the Company’s option at a Redemption Price equal to the greater of

 

(i)                                     100% of the principal amount of the Notes to be redeemed on the Redemption Date; and

 

(ii)                                  as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed on that Redemption Date (not including any portion of those payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 30 basis points

 

plus, in each case, accrued and unpaid interest to the Redemption Date.  Notwithstanding the foregoing, installments of interest on the Notes that are due and payable on Interest Payment Dates falling on or prior to a Redemption Date will be payable on the Interest Payment Date to 

 

A-3

 

the registered holders as of the close of business on the relevant Regular Record Date according to the Notes and the Indenture.

 

Any notice to holders of Notes of a redemption pursuant to this paragraph 3 hereof will include the appropriate calculation of the Redemption Price, but does not need to include the Redemption Price itself.  The actual Redemption Price, calculated as described above, will be set forth in an Officer’s Certificate of the Company delivered to the Series Trustee no later than two Business Days prior to the redemption date.

 

4.                                       Upon the occurrence of a Change of Control Repurchase Event, unless all Notes have been called for redemption pursuant to paragraph 3 of this Note, each Holder of the Notes shall have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple of $1,000 in excess thereof) of such Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of such Notes plus accrued and unpaid interest thereon, if any, to the date of repurchase.  “Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event, as such terms are defined in the Indenture.  The Change of Control Offer will be made in accordance with the terms specified in the Indenture.

 

5.                                       If an Event of Default with respect to the Notes shall occur and be continuing, the Series Trustee or the Holders of not less than 25% in principal amount of the Outstanding Notes may declare the principal of all Notes due and payable in the manner and with the effect provided in the Indenture.  The Indenture provides that such declaration and its consequences may, in certain events, be annulled by the Holders of a majority in principal amount of the Outstanding Notes.

 

6.                                       The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of Notes under the Indenture at any time by the Company and the Series Trustee with the consent of the Holders of a majority in aggregate principal amount of Notes at the time Outstanding.  The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of Notes at the time Outstanding, on behalf of the Holders of all Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and; of any Note issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof; whether or not notation of such consent or waiver is made upon this Note.

 

7.                                       No reference herein to the Indenture and no provisions of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, places and rate, and in the coin or currency, herein prescribed.

 

8.                                       As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note may be registered on the Security Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company to be 

 

A-4

 

maintained for that purpose, or at such other office or agency as may be established by the Company for such purpose pursuant to the Indenture (initially the principal corporate trust office of the Series Trustee in Minneapolis, Minnesota), duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company, and duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

9.                                       The Notes are issuable only in fully registered form, without coupons, in denominations of $2,000 or any amount in excess thereof which is an integral multiple of $1,000.  As provided in the Indenture, and subject to certain limitations therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes in authorized denominations, as requested by the Holder surrendering the same.

 

10.                                 No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

11.                                 Prior to the due presentment of this Note for registration of transfer or exchange, the Company, the Series Trustee and any agent of the Company or the Series Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Series Trustee, nor any such agent shall be affected by notice to the contrary.

 

12.                                 Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30- day months.  Interest shall be payable to and excluding any Interest Payment Date.

 

13.                                 The Series Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Series Trustee.

 

14.                                 This Note shall not be valid until authenticated by the manual signature of the Series Trustee or an Authenticating Agent.

 

15.                                 Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUT (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

16.                                 Each Holder of this Note covenants and agrees by such Holder’s acceptance thereof to comply with and be bound by the foregoing provisions.

 

17.                                 All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

A-5

 

ASSIGNMENT FORM

 

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

 

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

 

 

 

the within Security and all rights thereunder, hereby irrevocably constituting and appointing                                                          attorney to transfer said Security on the books of the Company, with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature:
    	
 
    	
 
    

 

NOTICE:          THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

 

Signature Guarantee:

 

SIGNATURE GUARANTEE

 

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

A-6

 

Schedule I

 

SCHEDULE OF TRANSFERS AND EXCHANGES

 

The following increases or decreases in Principal Amount of this Global Security have been made:

 

	
Date of
   Exchange
    	
 
    	
Amount of Decrease in
   Principal Amount of
   this Global Security
    	
 
    	
Amount of Increase
   in Principal Amount of
   this Global Security
    	
 
    	
Principal Amount of this
   Global Security
   following such Decrease
   or Increase
    	
 
    	
Signature of
   Authorized
   Signatory of trustee
   or Custodian
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

A-7

 

EXHIBIT A-2

 

[Form of Face of Note]

 

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

CUSIP [     ]

 

ECOLAB INC.

 

3.000% NOTE DUE 2016

 

	
$[            ]
    	
No.: R-[    ]
    

 

ECOLAB INC., a Delaware corporation (herein called the “Company”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $[            ] ([            ] DOLLARS) or such other Principal Amount as shall be set forth on Schedule I hereto on December 8, 2016 and to pay interest thereon at the rate of 3.000% per annum from December 8, 2011 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, on June 8 and December 8 of each year, commencing June 8, 2012 (each an “Interest Payment Date”), until the principal hereof is paid or made available for payment.

 

The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, except as provided in the Indenture hereinafter referred to, be paid to the Person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which will be the May 24 and November 23, as the case may be, immediately preceding each Interest Payment Date.  Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and either may be paid to the Person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on a Special Record Date for the

 

 

payment of such defaulted interest to be fixed by the Series Trustee, notice whereof shall be given to the Holders not less than ten days prior to such Special Record Date, or may be paid at any time in any other lawful manner, all as more fully provided in the Indenture.  Payment of the principal of and interest on this Note will be made at the office or agency of the Company maintained for that purpose, or in such other office or agency as may be established by the Company pursuant to the Indenture (initially the principal corporate trust office of the Series Trustee in Minneapolis, Minnesota (the “Corporate Trust Office”)), in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company through the Paying Agent (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer to an account maintained by the Person entitled thereto as specified in the Security Register.  Payments of principal and interest at maturity will be made against presentation of this Note at the Corporate Trust Office (or such other office as may be established pursuant to the Indenture), by check or wire transfer.

 

Reference is hereby made to the further provisions of this Note set forth on the reverse side hereof, which further provisions shall for all purposes have the same effect as though fully set forth at this place.

 

Unless the Certificate of Authentication hereon has been executed by the Series Trustee or an Authenticating Agent under the Indenture referred to on the reverse hereof by the manual signature of one of its authorized officers, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

 

IN WITNESS WHEREOF, the Company has caused this Note to be signed in its name by the manual or facsimile signature of its Chief Executive Officer, its President or one of its Vice Presidents and attested by the manual or facsimile signature of its Secretary or one of its Assistant Secretaries.

 

Date:

 

	
 
    	
ECOLAB   INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
ATTEST:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Secretary
    	
 
    

 

 

Series Trustee’s Certificate of Authentication

 

This is one of the Notes described in the Indenture.

 

Dated:

 

	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION, as Series Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized Signatory
    

 

 

[Form of Reverse of Note]

 

ECOLAB INC.

 

3.000% NOTE DUE 2016

 

1.             This Note is one of a duly authorized issue of securities of the Company designated as its 3.000% Notes due 2016 (the “Notes”) issued under an Amended and Restated Indenture dated as of January 9, 2001 (herein called, together with the First Supplemental Indenture dated as of February 8, 2008 and the Second Supplemental Indenture referred to below, the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.), as trustee, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Company, the Original Trustee (as defined below), the Series Trustee (as defined below) and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.

 

2.             This Note is one of the notes of the series designated on the face hereof, limited to an aggregate principal amount not to exceed $1,250,000,000, which amount may be increased at the option of the Company if in the future it determines that it may wish to sell additional Notes of this series, as specified in the Second Supplemental Indenture among the Company, The Bank of New York Mellon Trust Company, N.A., as original trustee (herein called the “Original Trustee,” which term includes any successor trustee thereto under the Indenture) and Wells Fargo Bank, National Association, as series trustee for the Notes (herein called the “Series Trustee,” which term includes any successor trustee thereto with respect to the Notes under the Indenture) and as Security Registrar and Paying Agent with respect to the Notes, dated as of December 8, 2011, establishing the form and certain terms of the Notes pursuant to the Indenture (the “Second Supplemental Indenture”). References herein to “this series” mean the series of Notes designated on the face hereof.

 

3.             The Company may redeem any series of Notes at any time or from time to time, in whole or in part, in each case, at the Company’s option at a Redemption Price equal to the greater of

 

(i)            100% of the principal amount of the Notes to be redeemed on the Redemption Date; and

 

(ii)           as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed on that Redemption Date (not including any portion of those payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 35 basis points

 

plus, in each case, accrued and unpaid interest to the Redemption Date.  Notwithstanding the foregoing, installments of interest on the Notes that are due and payable on Interest Payment Dates falling on or prior to a Redemption Date will be payable on the Interest Payment Date to

 

 

the registered holders as of the close of business on the relevant Regular Record Date according to the Notes and the Indenture.

 

Any notice to holders of Notes of a redemption pursuant to this paragraph 3 hereof will include the appropriate calculation of the Redemption Price, but does not need to include the Redemption Price itself.  The actual Redemption Price, calculated as described above, will be set forth in an Officer’s Certificate of the Company delivered to the Series Trustee no later than two Business Days prior to the redemption date.

 

4.             Upon the occurrence of a Change of Control Repurchase Event, unless all Notes have been called for redemption pursuant to paragraph 3 of this Note, each Holder of the Notes shall have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple of $1,000 in excess thereof) of such Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of such Notes plus accrued and unpaid interest thereon, if any, to the date of repurchase.  “Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event, as such terms are defined in the Indenture.  The Change of Control Offer will be made in accordance with the terms specified in the Indenture.

 

5.             If an Event of Default with respect to the Notes shall occur and be continuing, the Series Trustee or the Holders of not less than 25% in principal amount of the Outstanding Notes may declare the principal of all Notes due and payable in the manner and with the effect provided in the Indenture.  The Indenture provides that such declaration and its consequences may, in certain events, be annulled by the Holders of a majority in principal amount of the Outstanding Notes.

 

6.             The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of Notes under the Indenture at any time by the Company and the Series Trustee with the consent of the Holders of a majority in aggregate principal amount of Notes at the time Outstanding.  The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of Notes at the time Outstanding, on behalf of the Holders of all Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and; of any Note issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof; whether or not notation of such consent or waiver is made upon this Note.

 

7.             No reference herein to the Indenture and no provisions of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, places and rate, and in the coin or currency, herein prescribed.

 

8.             As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note may be registered on the Security Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company to be

 

 

maintained for that purpose, or at such other office or agency as may be established by the Company for such purpose pursuant to the Indenture (initially the principal corporate trust office of the Series Trustee in Minneapolis, Minnesota), duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company, and duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

9.             The Notes are issuable only in fully registered form, without coupons, in denominations of $2,000 or any amount in excess thereof which is an integral multiple of $1,000.  As provided in the Indenture, and subject to certain limitations therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes in authorized denominations, as requested by the Holder surrendering the same.

 

10.           No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

11.           Prior to the due presentment of this Note for registration of transfer or exchange, the Company, the Series Trustee and any agent of the Company or the Series Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Series Trustee, nor any such agent shall be affected by notice to the contrary.

 

12.           Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30- day months.  Interest shall be payable to and excluding any Interest Payment Date.

 

13.           The Series Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Series Trustee.

 

14.           This Note shall not be valid until authenticated by the manual signature of the Series Trustee or an Authenticating Agent.

 

15.           Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUT (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

16.           Each Holder of this Note covenants and agrees by such Holder’s acceptance thereof to comply with and be bound by the foregoing provisions.

 

17.           All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

ASSIGNMENT FORM

 

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

 

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

 

 

 

the within Security and all rights thereunder, hereby irrevocably constituting and appointing                                                          attorney to transfer said Security on the books of the Company, with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature:
    	
 
    	
 
    

 

	
NOTICE:
    	
THE   SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON   THE FACE OF THE WITHIN INSTRUMENT IN EVERY PARTICULAR, WITHOUT ALTERATION OR   ENLARGEMENT OR ANY CHANGE WHATEVER.
    

 

Signature Guarantee:

 

SIGNATURE GUARANTEE

 

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

 

Schedule I

 

SCHEDULE OF TRANSFERS AND EXCHANGES

 

The following increases or decreases in Principal Amount of this Global Security have been made:

 

	
Date of
   Exchange
    	
 
    	
Amount of Decrease in
   Principal Amount of
   this Global Security
    	
 
    	
Amount of Increase
   in Principal Amount of
   this Global Security
    	
 
    	
Principal Amount of this
   Global Security
   following such Decrease
   or Increase
    	
 
    	
Signature of
   Authorized
   Signatory of trustee
   or Custodian
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

EXHIBIT A-3

 

[Form of Face of Note]

 

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

CUSIP [     ]

 

ECOLAB INC.

 

4.350% NOTE DUE 2021

 

	
$[            ]
    	
 
    	
No.: R-[    ]
    

 

ECOLAB INC., a Delaware corporation (herein called the “Company”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $[            ] ([            ] DOLLARS) or such other Principal Amount as shall be set forth on Schedule I hereto on December 8, 2021 and to pay interest thereon at the rate of 4.350% per annum from December 8, 2011 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, on June 8 and December 8 of each year, commencing June 8, 2012 (each an “Interest Payment Date”), until the principal hereof is paid or made available for payment.

 

The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, except as provided in the Indenture hereinafter referred to, be paid to the Person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which will be the May 24 and November 23, as the case may be, immediately preceding each Interest Payment Date.  Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and either may be paid to the Person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on a Special Record Date for the

 

 

payment of such defaulted interest to be fixed by the Series Trustee, notice whereof shall be given to the Holders not less than ten days prior to such Special Record Date, or may be paid at any time in any other lawful manner, all as more fully provided in the Indenture.  Payment of the principal of and interest on this Note will be made at the office or agency of the Company maintained for that purpose, or in such other office or agency as may be established by the Company pursuant to the Indenture (initially the principal corporate trust office of the Series Trustee in Minneapolis, Minnesota (the “Corporate Trust Office”)), in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company through the Paying Agent (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer to an account maintained by the Person entitled thereto as specified in the Security Register.  Payments of principal and interest at maturity will be made against presentation of this Note at the Corporate Trust Office (or such other office as may be established pursuant to the Indenture), by check or wire transfer.

 

Reference is hereby made to the further provisions of this Note set forth on the reverse side hereof, which further provisions shall for all purposes have the same effect as though fully set forth at this place.

 

Unless the Certificate of Authentication hereon has been executed by the Series Trustee or an Authenticating Agent under the Indenture referred to on the reverse hereof by the manual signature of one of its authorized officers, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

 

IN WITNESS WHEREOF, the Company has caused this Note to be signed in its name by the manual or facsimile signature of its Chief Executive Officer, its President or one of its Vice Presidents and attested by the manual or facsimile signature of its Secretary or one of its Assistant Secretaries.

 

	
Date:
    	
 
    
	
 
    	
 
    
	
 
    	
ECOLAB   INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
ATTEST:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Secretary
    	
 
    

 

 

Series Trustee’s Certificate of Authentication

 

This is one of the Notes described in the Indenture.

 

	
Dated:
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION, as Series Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Authorized Signatory
    

 

 

[Form of Reverse of Note]

 

ECOLAB INC.

 

4.350% NOTE DUE 2021

 

1.                                       This Note is one of a duly authorized issue of securities of the Company designated as its 4.350% Notes due 2021 (the “Notes”) issued under an Amended and Restated Indenture dated as of January 9, 2001 (herein called, together with the First Supplemental Indenture dated as of February 8, 2008 and the Second Supplemental Indenture referred to below, the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.), as trustee, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Company, the Original Trustee (as defined below), the Series Trustee (as defined below) and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.

 

2.                                       This Note is one of the notes of the series designated on the face hereof, limited to an aggregate principal amount not to exceed $1,250,000,000, which amount may be increased at the option of the Company if in the future it determines that it may wish to sell additional Notes of this series, as specified in the Second Supplemental Indenture among the Company, The Bank of New York Mellon Trust Company, N.A., as original trustee (herein called the “Original Trustee,” which term includes any successor trustee thereto under the Indenture) and Wells Fargo Bank, National Association, as series trustee for the Notes (herein called the “Series Trustee,” which term includes any successor trustee thereto with respect to the Notes under the Indenture) and as Security Registrar and Paying Agent with respect to the Notes, dated as of December 8, 2011, establishing the form and certain terms of the Notes pursuant to the Indenture (the “Second Supplemental Indenture”). References herein to “this series” mean the series of Notes designated on the face hereof.

 

3.                                       The Company may redeem any series of Notes at any time or from time to time, in whole or in part, in each case, at the Company’s option at a Redemption Price equal to the greater of

 

(i)                                     100% of the principal amount of the Notes to be redeemed on the Redemption Date; and

 

(ii)                                  as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed on that Redemption Date (not including any portion of those payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 35 basis points

 

plus, in each case, accrued and unpaid interest to the Redemption Date.  Notwithstanding the foregoing, installments of interest on the Notes that are due and payable on Interest Payment Dates falling on or prior to a Redemption Date will be payable on the Interest Payment Date to

 

 

the registered holders as of the close of business on the relevant Regular Record Date according to the Notes and the Indenture.

 

Any notice to holders of Notes of a redemption pursuant to this paragraph 3 hereof will include the appropriate calculation of the Redemption Price, but does not need to include the Redemption Price itself.  The actual Redemption Price, calculated as described above, will be set forth in an Officer’s Certificate of the Company delivered to the Series Trustee no later than two Business Days prior to the redemption date.

 

4.                                       Upon the occurrence of a Change of Control Repurchase Event, unless all Notes have been called for redemption pursuant to paragraph 3 of this Note, each Holder of the Notes shall have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple of $1,000 in excess thereof) of such Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of such Notes plus accrued and unpaid interest thereon, if any, to the date of repurchase.  “Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event, as such terms are defined in the Indenture.  The Change of Control Offer will be made in accordance with the terms specified in the Indenture.

 

5.                                       If an Event of Default with respect to the Notes shall occur and be continuing, the Series Trustee or the Holders of not less than 25% in principal amount of the Outstanding Notes may declare the principal of all Notes due and payable in the manner and with the effect provided in the Indenture.  The Indenture provides that such declaration and its consequences may, in certain events, be annulled by the Holders of a majority in principal amount of the Outstanding Notes.

 

6.                                       The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of Notes under the Indenture at any time by the Company and the Series Trustee with the consent of the Holders of a majority in aggregate principal amount of Notes at the time Outstanding.  The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of Notes at the time Outstanding, on behalf of the Holders of all Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and; of any Note issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof; whether or not notation of such consent or waiver is made upon this Note.

 

7.                                       No reference herein to the Indenture and no provisions of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, places and rate, and in the coin or currency, herein prescribed.

 

8.                                       As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note may be registered on the Security Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company to be

 

 

maintained for that purpose, or at such other office or agency as may be established by the Company for such purpose pursuant to the Indenture (initially the principal corporate trust office of the Series Trustee in Minneapolis, Minnesota), duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company, and duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

9.                                       The Notes are issuable only in fully registered form, without coupons, in denominations of $2,000 or any amount in excess thereof which is an integral multiple of $1,000.  As provided in the Indenture, and subject to certain limitations therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes in authorized denominations, as requested by the Holder surrendering the same.

 

10.                                 No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

11.                                 Prior to the due presentment of this Note for registration of transfer or exchange, the Company, the Series Trustee and any agent of the Company or the Series Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Series Trustee, nor any such agent shall be affected by notice to the contrary.

 

12.                                 Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30- day months.  Interest shall be payable to and excluding any Interest Payment Date.

 

13.                                 The Series Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Series Trustee.

 

14.                                 This Note shall not be valid until authenticated by the manual signature of the Series Trustee or an Authenticating Agent.

 

15.                                 Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUT (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

16.                                 Each Holder of this Note covenants and agrees by such Holder’s acceptance thereof to comply with and be bound by the foregoing provisions.

 

17.                                 All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

ASSIGNMENT FORM

 

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

 

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

 

 

 

the within Security and all rights thereunder, hereby irrevocably constituting and appointing                                                          attorney to transfer said Security on the books of the Company, with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature:
    	
 
    	
 
    

 

NOTICE:       THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

 

Signature Guarantee:

 

SIGNATURE GUARANTEE

 

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

 

Schedule I

 

SCHEDULE OF TRANSFERS AND EXCHANGES

 

The following increases or decreases in Principal Amount of this Global Security have been made:

 

	
Date of
   Exchange
    	
 
    	
Amount of Decrease in
   Principal Amount of
   this Global Security
    	
 
    	
Amount of Increase
   in Principal Amount of
   this Global Security
    	
 
    	
Principal Amount of this
   Global Security
   following such Decrease
   or Increase
    	
 
    	
Signature of
   Authorized
   Signatory of trustee
   or Custodian
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

EXHIBIT A-4

 

[Form of Face of Note]

 

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

CUSIP [     ]

 

ECOLAB INC.

 

5.500% NOTE DUE 2041

 

	
$[            ]
    	
No.: R-[    ]
    

 

ECOLAB INC., a Delaware corporation (herein called the “Company”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $[            ] ([            ] DOLLARS) or such other Principal Amount as shall be set forth on Schedule I hereto on December 8, 2041 and to pay interest thereon at the rate of 5.500% per annum from December 8, 2011 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, on June 8 and December 8 of each year, commencing June 8, 2012 (each an “Interest Payment Date”), until the principal hereof is paid or made available for payment.

 

The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, except as provided in the Indenture hereinafter referred to, be paid to the Person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which will be the May 24 and November 23, as the case may be, immediately preceding each Interest Payment Date.  Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and either may be paid to the Person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on a Special Record Date for the

 

 

payment of such defaulted interest to be fixed by the Series Trustee, notice whereof shall be given to the Holders not less than ten days prior to such Special Record Date, or may be paid at any time in any other lawful manner, all as more fully provided in the Indenture.  Payment of the principal of and interest on this Note will be made at the office or agency of the Company maintained for that purpose, or in such other office or agency as may be established by the Company pursuant to the Indenture (initially the principal corporate trust office of the Series Trustee in Minneapolis, Minnesota (the “Corporate Trust Office”)), in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company through the Paying Agent (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer to an account maintained by the Person entitled thereto as specified in the Security Register.  Payments of principal and interest at maturity will be made against presentation of this Note at the Corporate Trust Office (or such other office as may be established pursuant to the Indenture), by check or wire transfer.

 

Reference is hereby made to the further provisions of this Note set forth on the reverse side hereof, which further provisions shall for all purposes have the same effect as though fully set forth at this place.

 

Unless the Certificate of Authentication hereon has been executed by the Series Trustee or an Authenticating Agent under the Indenture referred to on the reverse hereof by the manual signature of one of its authorized officers, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

 

IN WITNESS WHEREOF, the Company has caused this Note to be signed in its name by the manual or facsimile signature of its Chief Executive Officer, its President or one of its Vice Presidents and attested by the manual or facsimile signature of its Secretary or one of its Assistant Secretaries.

 

Date:

 

	
 
    	
 
    	
ECOLAB   INC.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
 
    
	
ATTEST:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Secretary
    	
 
    	
 
    	
 
    

 

 

Series Trustee’s Certificate of Authentication

 

This is one of the Notes described in the Indenture.

 

Dated:

 

	
 
    	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION, as Series Trustee
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Authorized Signatory
    

 

 

[Form of Reverse of Note]

 

ECOLAB INC.

 

5.500% NOTE DUE 2041

 

1.                                       This Note is one of a duly authorized issue of securities of the Company designated as its 5.500% Notes due 2041 (the “Notes”) issued under an Amended and Restated Indenture dated as of January 9, 2001 (herein called, together with the First Supplemental Indenture dated as of February 8, 2008 and the Second Supplemental Indenture referred to below, the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.), as trustee, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights thereunder of the Company, the Original Trustee (as defined below), the Series Trustee (as defined below) and the Holders of the Notes, and the terms upon which the Notes are, and are to be, authenticated and delivered.

 

2.                                       This Note is one of the notes of the series designated on the face hereof, limited to an aggregate principal amount not to exceed $750,000,000, which amount may be increased at the option of the Company if in the future it determines that it may wish to sell additional Notes of this series, as specified in the Second Supplemental Indenture among the Company, The Bank of New York Mellon Trust Company, N.A., as original trustee (herein called the “Original Trustee,” which term includes any successor trustee thereto under the Indenture) and Wells Fargo Bank, National Association, as series trustee for the Notes (herein called the “Series Trustee,” which term includes any successor trustee thereto with respect to the Notes under the Indenture) and as Security Registrar and Paying Agent with respect to the Notes, dated as of December 8, 2011, establishing the form and certain terms of the Notes pursuant to the Indenture (the “Second Supplemental Indenture”). References herein to “this series” mean the series of Notes designated on the face hereof.

 

3.                                       The Company may redeem any series of Notes at any time or from time to time, in whole or in part, in each case, at the Company’s option at a Redemption Price equal to the greater of

 

(i)                                     100% of the principal amount of the Notes to be redeemed on the Redemption Date; and

 

(ii)                                  as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed on that Redemption Date (not including any portion of those payments of interest accrued as of the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 40 basis points

 

plus, in each case, accrued and unpaid interest to the Redemption Date.  Notwithstanding the foregoing, installments of interest on the Notes that are due and payable on Interest Payment Dates falling on or prior to a Redemption Date will be payable on the Interest Payment Date to

 

 

the registered holders as of the close of business on the relevant Regular Record Date according to the Notes and the Indenture.

 

Any notice to holders of Notes of a redemption pursuant to this paragraph 3 hereof will include the appropriate calculation of the Redemption Price, but does not need to include the Redemption Price itself.  The actual Redemption Price, calculated as described above, will be set forth in an Officer’s Certificate of the Company delivered to the Series Trustee no later than two Business Days prior to the redemption date.

 

4.                                       Upon the occurrence of a Change of Control Repurchase Event, unless all Notes have been called for redemption pursuant to paragraph 3 of this Note, each Holder of the Notes shall have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple of $1,000 in excess thereof) of such Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of such Notes plus accrued and unpaid interest thereon, if any, to the date of repurchase.  “Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event, as such terms are defined in the Indenture.  The Change of Control Offer will be made in accordance with the terms specified in the Indenture.

 

5.                                       If an Event of Default with respect to the Notes shall occur and be continuing, the Series Trustee or the Holders of not less than 25% in principal amount of the Outstanding Notes may declare the principal of all Notes due and payable in the manner and with the effect provided in the Indenture.  The Indenture provides that such declaration and its consequences may, in certain events, be annulled by the Holders of a majority in principal amount of the Outstanding Notes.

 

6.                                       The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of Notes under the Indenture at any time by the Company and the Series Trustee with the consent of the Holders of a majority in aggregate principal amount of Notes at the time Outstanding.  The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of Notes at the time Outstanding, on behalf of the Holders of all Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and; of any Note issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof; whether or not notation of such consent or waiver is made upon this Note.

 

7.                                       No reference herein to the Indenture and no provisions of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, places and rate, and in the coin or currency, herein prescribed.

 

8.                                       As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note may be registered on the Security Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company to be

 

 

maintained for that purpose, or at such other office or agency as may be established by the Company for such purpose pursuant to the Indenture (initially the principal corporate trust office of the Series Trustee in Minneapolis, Minnesota), duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company, and duly executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

9.                                       The Notes are issuable only in fully registered form, without coupons, in denominations of $2,000 or any amount in excess thereof which is an integral multiple of $1,000.  As provided in the Indenture, and subject to certain limitations therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes in authorized denominations, as requested by the Holder surrendering the same.

 

10.                                 No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

11.                                 Prior to the due presentment of this Note for registration of transfer or exchange, the Company, the Series Trustee and any agent of the Company or the Series Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Series Trustee, nor any such agent shall be affected by notice to the contrary.

 

12.                                 Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30- day months.  Interest shall be payable to and excluding any Interest Payment Date.

 

13.                                 The Series Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Series Trustee.

 

14.                                 This Note shall not be valid until authenticated by the manual signature of the Series Trustee or an Authenticating Agent.

 

15.                                 Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUT (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

16.                                 Each Holder of this Note covenants and agrees by such Holder’s acceptance thereof to comply with and be bound by the foregoing provisions.

 

17.                                 All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

ASSIGNMENT FORM

 

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

 

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

 

 

 

the within Security and all rights thereunder, hereby irrevocably constituting and appointing                                                          attorney to transfer said Security on the books of the Company, with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature:
    	
 
    	
 
    

 

	
NOTICE:
    	
THE   SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON   THE FACE OF THE WITHIN INSTRUMENT IN EVERY PARTICULAR, WITHOUT ALTERATION OR   ENLARGEMENT OR ANY CHANGE WHATEVER.
    

 

Signature Guarantee:

 

SIGNATURE GUARANTEE

 

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

 

Schedule I

 

SCHEDULE OF TRANSFERS AND EXCHANGES

 

The following increases or decreases in Principal Amount of this Global Security have been made:

 

	
Date of
   Exchange
    	
 
    	
Amount of Decrease in
   Principal Amount of
   this Global Security
    	
 
    	
Amount of Increase
   in Principal Amount of
   this Global Security
    	
 
    	
Principal Amount of this
   Global Security
   following such Decrease
   or Increase
    	
 
    	
Signature of
   Authorized
   Signatory of trustee
   or CustodianExhibit 10.2

 

AMENDED AND RESTATED 
 TERM LOAN AGREEMENT

 

THIS AMENDED AND RESTATED TERM LOAN AGREEMENT, dated as of December 7, 2011, is entered into between U.S. BANK NATIONAL ASSOCIATION, a national banking association (“Bank”), and CHEROKEE INC., a Delaware corporation (“Borrower”), in light of the following facts:

 

WHEREAS, Borrower and Bank have previously entered into a Term Loan Agreement dated as of February 16, 2011 (“Original Loan Agreement”).

 

WHEREAS, Borrower has requested and Bank has agreed to make available to Borrower a term loan in the amount of Five Million Dollars ($5,000,000) and a term loan in the amount of Two Million Dollars ($2,000,000), in each case, in accordance with the terms of this Agreement.

 

WHEREAS, Borrower has agreed to secure its Obligations hereunder with a lien on substantially all of its personal property assets as set forth in Security Agreement (as defined below).

 

WHEREAS, to induce Bank to make the term loans to Borrower as set forth hereunder, Spell C, LLC, a Delaware limited liability company (“Guarantor”) has agreed to guaranty the repayment of the term loans as set forth in the Guaranty (as defined below).

 

NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in this Agreement, and for good and valuable consideration, the receipt of which is hereby acknowledged, Bank and Borrower hereby agree to amend and restate the Original Loan Agreement as follows:

 

1.                                       DEFINITIONS. In addition to the defined terms contained in the first paragraph and recitals above, as used herein, the following terms shall have the following definitions:

 

1.1                                 “Affiliate” or “Affiliates” means any Person controlled by, controlling or under common control with Borrower, including any subsidiary of Borrower.  For purposes of this definition, “control,” when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

 

1.2                                 “Agreement” means this Amended and Restated Term Loan Agreement and any amendments or modifications hereof.

 

1.3                                 “Bank” has the meaning given in the recitals hereto.

 

1

 

1.4                                 “Bank Expenses” means all of the following reasonable and documented expenses: (i) costs or expenses (including, without limitation, taxes and insurance premiums) required to be paid by Borrower under this Agreement or any of the other Term Loan Documents which are paid or advanced by Bank; (ii) filing, recording, publication and search fees paid or incurred by Bank; and (iii) costs, fees (including attorneys’ and paralegals’ fees) and expenses incurred by or charged to Bank: (a) in structuring, drafting, reviewing, amending, defending or concerning this Agreement or any of the other Term Loan Documents; or (b) to correct any default or enforce any provision of this Agreement, or any of the other Term Loan Documents.

 

1.5                                 “Borrower” has the meaning given in the recitals hereto.

 

1.6                                 “Borrower’s Account” shall have the meaning set forth in Section 2.5(D).

 

1.7                                 “Change of Control” means

 

A.                                   Any Person or “group” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) who does not have an ownership interest in Borrower on the date hereof is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that any such Person, entity or group will be deemed to have “beneficial ownership” of all securities that such Person, entity or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than fifty percent (50%) of the voting power of all classes of ownership of Borrower;

 

B.                                     During any consecutive two-year period, individuals who at the beginning of such period constituted the board of directors of Borrower (together with any new directors whose election to such board of directors, or whose nomination for election by the owners of Borrower, was approved by a vote of two thirds of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the board of directors of Borrower then in office.

 

1.8                                 “Closing Date” means the date Bank makes the Term Loans to Borrower.

 

1.9                                 “Collateral” has the meaning given in the Security Agreement.

 

1.10                           “EBITDA” means earnings before interest, taxes, depreciation and amortization.

 

1.11                           “Environmental Law” means any federal, state, local or other governmental statute, regulation, law or ordinance dealing with the protection of human health and the environment.

 

1.12                           “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

2

 

1.13                           “ERISA Affiliate” means any trade or business (whether or not incorporated) that is a member of a group which includes Borrower and which is treated as a single employer under Section 414 of the IRC.

 

1.14                           “Event of Default” means the occurrence of any one of the events set forth in Section 10.

 

1.15                           “Fixed Charge Coverage Ratio”, for any period of measurement, means the ratio of (a) EBITDA, plus non-cash stock compensation plus rent/lease expense, minus actual cash taxes paid (without taking into account any tax refunds received), minus cash dividends paid, minus maintenance capital expenditures (measured at 50% of depreciation expense), to (b) mandatory payments on debt, plus cash interest expense, plus rent/lease expense.

 

1.16                           “GAAP” means generally accepted accounting principles, applied on a basis consistent with the accounting practices applied in the financial statements described in Section 8.6.

 

1.17                           “Guaranty” means that certain Amended and Restated Continuing Guaranty dated as of even date hereof executed by Guarantor in favor of Bank, as may be amended from time to time.

 

1.18                           “Hazardous Substances” means pollutants, contaminants, hazardous substances, hazardous wastes, petroleum and fractions thereof, and all other chemicals, wastes, substances and materials listed in, regulated by or identified in any Environmental Law.

 

1.19                           “Insolvency Proceeding” means any proceeding commenced by or against any person or entity under any provision of the federal Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law, including, but not limited to, assignments for the benefit of creditors, formal or informal moratoriums, compositions or extensions generally with its creditors.

 

1.20                           “IRC” means the Internal Revenue Code, as amended from time to time.

 

1.21                           “Judicial Officer or Assignee” means any trustee, receiver, custodian, assignee for the benefit of creditors or any other person or entity having powers or duties like or similar to the powers and duties of a trustee, receiver,  custodian or assignee for the benefit of creditors.

 

1.22                           “LIBOR Rate Loan A” shall have the meaning set forth in Section 2.2(A).

 

1.23                           “LIBOR Rate Loan B” shall have the meaning set forth in Section 2.2(B).

 

1.24                           “Licensed Intellectual Property” shall have the meaning set forth in Section 8.8(C).

 

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1.25                           “Loan Period” means the period commencing on the advance date of the applicable LIBOR Rate Loan A or LIBOR Rate Loan B and ending on the numerically corresponding day 1, 2 or 3 months thereafter matching the interest rate term selected by Borrower; provided, however, (a) if any Loan Period would otherwise end on a day which is not a New York Banking Day, then the Loan Period shall end on the next succeeding New York Banking Day unless the next succeeding New York Banking Day falls in another calendar month, in which case the Loan Period shall end on the immediately preceding New York Banking Day; or (b) if any Loan Period begins on the last New York Banking Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of the Loan Period), then the Loan Period shall end on the last New York Banking Day of the calendar month at the end of such Loan Period.

 

1.26                           “Material Adverse Change” means (a) a material adverse change in the business, prospects, operations, results of operations, assets, liabilities or condition (financial or otherwise) of Borrower, (b) a material impairment of Borrower’s ability to perform its obligations under the Term Loan Documents to which it is a party or of Bank’s ability to enforce the Obligations or realize upon the Collateral, or (c) a material impairment of the enforceability or priority of Bank’s liens with respect to material Collateral as a result of an action or failure to act on the part of a Borrower.

 

1.27                           “Maturity Date” means either Term Loan A Maturity Date or Term Loan B Maturity Date.

 

1.28                           “Money Markets” means one or more wholesale funding markets available to and selected by Bank, including negotiable certificates of deposit, commercial paper, Eurodollar deposits, bank notes, federal funds, interest rate swaps or others.

 

1.29                           “Multiemployer Plan” means a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) to which Borrower or any ERISA Affiliate contributes or is obligated to contribute.

 

1.30                           “New York Banking Day” means any day (other than a Saturday or Sunday) on which commercial banks are open for business in New York, New York.

 

1.31                           “Obligations” means all obligations, guaranties, covenants and duties owing by Borrower to Bank of any kind and description whether arising pursuant to or evidenced by this Agreement or any of the other Term Loan Documents, or otherwise, including, without limitation, all interest not paid when due and all Bank Expenses which Borrower is required to pay or reimburse by this Agreement, by law, or otherwise.

 

1.32                           “Off-The-Shelf Software” shall have the meaning set forth in Section 8.8(C)

 

1.33                           “Original Loan Agreement” has the meaning given in the recitals hereto.

 

1.34                           “Owned Intellectual Property” shall have the meaning set forth in Section 8.8(A).

 

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1.35                           “Multiemployer Plan” means a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) to which Borrower or any ERISA Affiliate contributes or is obligated to contribute.

 

1.36                           “Pension Plan” means a pension plan (as defined in Section 3(2) of ERISA) maintained for employees of Borrower or any ERISA Affiliate and covered by Title IV of ERISA.

 

1.37                           “Permitted Liens” means (i) Liens for Taxes not yet due and payable or which are being contested in good faith by appropriate proceedings diligently pursued, provided that provision for the payment of all such Taxes has been made on the books of Borrower to the extent required by GAAP and Borrower’s failure to obtain a satisfactory result in such contest could not result in a Material Adverse Change; (ii) mechanics’, processor’s, materialmen’s, carriers’, warehouse-men’s, repairmen’s, landlord’s and similar Liens arising by operation of Law or arising in the ordinary course of business and securing obligations of Borrower that are not overdue for a period of more than 60 days or are being contested in good faith by appropriate proceedings diligently pursued, provided that provision for the payment of such Liens has been made on the books of Borrower and Borrower’s failure to obtain a satisfactory result in such contest could not result in a Material Adverse Change; (iii) Liens arising in connection with worker’s compensation, unemployment insurance, old age pensions and social security benefits, provided that provision for the payment of such Liens has been made on the books of Borrower and the full payment of amounts secured by such Lien could not result in a Material Adverse Change; (iv) easements, rights-of-way, municipal, government, building, zoning and similar restrictions, utility agreements, covenants, reservations, restrictions, encroachments, and other similar encumbrances defects, liens or irregularities in title and similar charges or encumbrances which do not materially interfere with the conduct of Borrower’s business or materially detract from the value of the assets subject to such lien other than to a de minimus extent or otherwise render title to any such asset unmarketable; and (v) Liens granted pursuant to the Security Agreement to secure the Obligations.

 

1.38                           “Person” means any individual, corporation, partnership, joint venture, limited liability company, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision of a governmental entity.

 

1.39                           “Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA) maintained for employees of Borrower or any ERISA Affiliate.

 

1.40                           “Prime Rate” shall have the meaning set forth in Section 2.2(A).

 

1.41                           “Prime Rate Loan A” shall have the meaning set forth in Section 2.2(A).

 

1.42                           “Prime Rate Loan B” shall have the meaning set forth in Section 2.2(B).

 

1.43                           “Reportable Event” means a reportable event (as defined in Section 4043 of ERISA), other than an event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the Pension Benefit Guaranty Corporation.

 

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1.44                           “Security Agreement” means that certain Amended and Restated Security Agreement dated of even date herewith executed by Borrower and Bank, as may be amended from time to time.

 

1.45                           “Setoff” shall have the meaning set forth in Section 17.2.

 

1.46                           “Term Loan” means either Term Loan A or Term Loan B, and “Term Loans” shall mean both Term Loan A and Term Loan B.

 

1.47                           “Term Loan A” shall have the meaning set forth in Section 2.1.

 

1.48                           “Term Loan B” shall have the meaning set forth in Section 2.2.

 

1.49                           “Term Loan A Maturity Date” shall have the meaning set forth in Section 2.5(A)(2).

 

1.50                           “Term Loan B Maturity Date” shall have the meaning set forth in Section 2.5(B)(2).

 

1.51                           “Term Loan Documents” means collectively this Agreement, the Term Notes, the Guaranty, the Security Agreement, and any other agreements entered into in connection with this Agreement.

 

1.52                           “Term Note” means either Term Note A or Term Note B, and “Term Notes” shall mean both Term Note A and Term Note B.

 

1.53                           “Term Note A” means that certain Term Note A, of even date herewith, in the original principal amount of Five Million Dollars ($5,000,000.00), executed by Borrower to the order of Bank.

 

1.54                           “Term Note B” means that certain Term Note B, of even date herewith, in the original principal amount of Two Million Dollars ($2,000,000.00), executed by Borrower to the order of Bank.

 

1.55                           Other Definitional Provisions.  References to “Sections”, “subsections”, and “Exhibits” shall be to Sections, subsections, and Exhibits, respectively, of this Agreement unless otherwise specifically provided.  Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural depending on the reference.  In this Agreement, words importing any gender include the other genders; the words “including,” “includes” and “include” shall be deemed to be followed by the words “without limitation”; references to agreements and other contractual instruments shall be deemed to include subsequent amendments, assignments, and other modifications thereto, but only to the extent such amendments, assignments and other modifications are not prohibited by the terms of this Agreement; references to any person includes their respective permitted successors and assigns or people succeeding to the relevant functions of such persons; all references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations; and all references to financial terms shall have the meaning given under GAAP unless specified otherwise herein.

 

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2.                                       TERM LOANS.

 

2.1                                 Term Loan A.  On the Closing Date, so long as all of the conditions precedent contained in Section 3 have been satisfied as determined by Bank, in its sole discretion, Bank shall lend to Borrower Five Million Dollars ($5,000,000.00) (“Term Loan A”).  Term Loan A shall be evidenced by and repaid in accordance with the terms of this Agreement and Term Note A.

 

2.2                                 Term Loan B.  On the Closing Date, so long as all of the conditions precedent contained in Section 3 have been satisfied as determined by Bank, in its sole discretion, Bank shall lend to Borrower Two Million Dollars ($2,000,000.00) (“Term Loan B”).  Term Loan B shall be evidenced by and repaid in accordance with the terms of this Agreement and Term Note B.

 

2.3                                 Interest.

 

A.                                   Interest on Term Loan A shall accrue at one of the following per annum rates selected by Borrower (i) upon notice to Bank, the prime rate announced by Bank  from time to time (“Prime Rate”), as and when such rate changes, minus 0.25% (a “Prime Rate Loan A”); or (ii) upon a minimum of two New York Banking Days prior notice, 2.00% plus the 1, 2 or 3 month LIBOR rate quoted by Bank from Reuters Screen LIBOR01 Page or any successor thereto (which shall be the LIBOR rate in effect two New York Banking Days prior to commencement of the advance), adjusted for any reserve requirement and any subsequent costs arising from a change in government regulation (a “LIBOR Rate Loan A”).

 

B.                                     Interest on Term Loan B shall accrue at one of the following per annum rates selected by Borrower (i) upon notice to Bank, the Prime Rate, as and when such rate changes, minus 0.25% (a “Prime Rate Loan B”); or (ii) upon a minimum of two New York Banking Days prior notice, 2.75% plus the 1, 2 or 3 month LIBOR rate quoted by Bank from Reuters Screen LIBOR01 Page or any successor thereto (which shall be the LIBOR rate in effect two New York Banking Days prior to commencement of the advance), adjusted for any reserve requirement and any subsequent costs arising from a change in government regulation (a “LIBOR Rate Loan B”).

 

C.                                     In the event Borrower does not timely select another interest rate option at least two New York Banking Days before the end of the Loan Period for a LIBOR Rate Loan A or LIBOR Rate Loan B, Bank may at any time after the end of the Loan Period convert the LIBOR Rate Loan A to a Prime Rate Loan A or the LIBOR Rate Loan B to a Prime Rate Loan B, as applicable, but until such conversion, the funds advanced under the LIBOR Rate Loan A or LIBOR Rate Loan B, as applicable, shall continue to accrue interest at the same rate as the interest rate in effect for such LIBOR Rate Loan A or LIBOR Rate Loan B, as applicable, prior to the end of the Loan Period.

 

D.                                    No LIBOR Rate Loan A or LIBOR Rate Loan B may extend beyond the Term Loan A Maturity Date or Term Loan B Maturity Date, respectively.  In any event, if the Loan Period for a LIBOR Rate Loan A or LIBOR Rate Loan B should happen to extend beyond the Term Loan A Maturity Date or Term Loan B Maturity Date, respectively, such loan must be prepaid at the time the applicable Term Note matures.  Bank’s internal records of applicable interest rates shall be determinative in the absence of manifest error.  Each LIBOR Rate Loan A and LIBOR Rate Loan B shall be in a minimum principal amount of $100,000.

 

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E.                                      The aggregate number of LIBOR Rate Loans A and LIBOR Rate Loans B in effect at any one time may not exceed 3.

 

F.                                      If a LIBOR Rate Loan A or LIBOR Rate Loan B is prepaid prior to the end of the Loan Period, as defined above, for such loan, whether voluntarily or because prepayment is required due to any Term Note maturing or due to acceleration of such Term Note upon default or otherwise, Borrower agrees to pay all of Bank’s costs, expenses and Interest Differential (as determined by Bank) incurred as a result of such prepayment.  Because of the short-term nature of this facility, Borrower agrees that the Interest Differential shall not be discounted to its present value.  Any prepayment of a LIBOR Rate Loan A or LIBOR Rate Loan B shall be in an amount equal to the remaining entire principal balance of such loan.

 

2.4                                 Default Rate.  Upon the occurrence and during the continuation of an Event of Default, the unpaid principal balance of the Term Loans shall bear interest at a per annum rate equal to 2 percentage points above the per annum rate otherwise applicable hereunder.

 

2.5                                 Payments.

 

A.                                   Term Loan A.

 

(1)                                  Interest on Term Loan A is payable beginning January 15, 2012, and on the same date of each consecutive month thereafter (except that if a given month does not have such a date, the last day of such month), plus a final interest payment with the final payment of principal.

 

(2)                                  Principal on Term Loan A is payable in full on November 30, 2013 (“Term Loan A Maturity Date”).

 

B.                                     Term Loan B.

 

(1)                                  Interest on Term Loan B is payable beginning January 15, 2012, and on the same date of each consecutive month thereafter (except that if a given month does not have such a date, the last day of such month), plus a final interest payment with the final payment of principal.

 

(2)                                  Principal is payable in installments of $41,666.67 each, beginning January 15, 2012, and on the same date of each consecutive month thereafter (except that if a given month does not have such a date, the last day of such month), plus a final payment equal to all unpaid principal on November 30, 2015 (“Term Loan B Maturity Date”).

 

C.                                     Subject to the limitation set forth in Section 2.3(F), the outstanding amount of the Term Notes may be prepaid at any time.  Any payments or prepayments received by Bank may be applied to amounts due under the Term Loan Documents in such order as Bank may elect.

 

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D.                                    Borrower hereby authorizes Bank to automatically withdraw all amounts due hereunder directly from Borrower’s account with U.S. Bank, account number 165400001963 (“Borrower’s Account”).  Borrower hereby further authorizes Bank, from time to time without prior notice to Borrower, to charge such interest and fees, all Bank Expenses (as and when incurred), and all other payments as and when due and payable under any Term Loan Document (including the installments when due and payable with respect to the Term Loans) to Borrower’s Account, which amounts thereafter shall accrue interest at the highest rate then applicable to the Term Loans hereunder.  Any interest not paid when due shall be compounded by being charged to Borrowers’ Account and shall thereafter accrue interest at the rate then applicable to Prime Rate Loan A or Prime Rate Loan B hereunder.

 

2.6                                 Computation.  All interest and fees shall be computed on the basis of a 360 day year for the actual number of days elapsed.  In the event the Prime Rate is changed from time to time hereafter, the rates of interest hereunder based upon the Prime Rate automatically and immediately shall be increased or decreased by an amount equal to such change in the Prime Rate.

 

2.7                                 Intent to Limit Charges to Maximum Lawful Rate.  In no event shall the interest rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable.  Borrower, in executing and delivering this Agreement, intends legally to agree upon the rate or rates of interest and manner of payment stated within it; provided, however, that, anything contained herein to the contrary notwithstanding, if said rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, ipso facto, as of the date of this Agreement, Borrower is and shall be liable only for the payment of such maximum as allowed by law, and payment received from Borrower in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the Term Loans to the extent of such excess.

 

2.8                                 Yield Protection.  If there shall occur any adoption or implementation of, or change to, any Regulation, or interpretation or administration thereof, which shall have the effect of imposing on Bank (or Bank’s holding company) any increase or expansion of or any new:  tax (excluding taxes on its overall income and franchise taxes), charge, fee, assessment or deduction of any kind whatsoever, or reserve, capital adequacy, special deposits or similar requirements against credit extended by, assets of, or deposits with or for the account of Bank or other conditions affecting the extensions of credit under this Agreement; then Borrower shall pay to Bank such additional amount as Bank deems necessary to compensate Bank for any increased cost to Bank attributable to the extension(s) of credit under this Agreement and/or for any reduction in the rate of return on Bank’s capital and/or Bank’s revenue attributable to such extension(s) of credit.  As used above, the term “Regulation” shall include any federal, state or international law, governmental or quasi-governmental rule, regulation, policy, guideline or directive (including but not limited to the Dodd-Frank Wall Street Reform and Consumer Protection Act and enactments, issuances or similar pronouncements by the Bank for International Settlements, the Basel Committee on Banking Regulations and Supervisory Practices or any similar authority and any successor thereto) that applies to Bank.  Bank’s determination of the additional amount(s) due under this paragraph shall be binding in the absence of manifest error, and such amount(s) shall be payable within 15 days of demand and, if recurring, as otherwise billed by Bank.

 

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3.                                       CONDITIONS PRECEDENT AND SUBSEQUENT.  The Term Loans shall be subject to the following conditions precedent and subsequent:

 

3.1                                 The following are the conditions precedent to the making of the Term Loans:

 

A.                                   Borrower shall pay Bank a closing fee in the amount of Ten Thousand and No/100 Dollars ($10,000.00).

 

B.                                     No Event of Default shall have occurred and be continuing and all of the representations and warranties set forth herein are true and correct as of the date of the making of the Term Loans.

 

C.                                     Borrower shall deliver to Bank (i) certified extracts from the minutes of the meetings of Borrower’s Board of Directors authorizing the borrowings and the granting of the security interest provided for herein and authorizing specific officers to execute and deliver the agreements provided for herein and (ii) a copy of the Borrower’s operating agreement in effect on the date hereof.

 

D.                                    Borrower shall deliver to Bank evidence that the Guarantor has authorized the execution of the Guaranty.

 

E.                                      Guarantor shall have executed and delivered to Bank the Guaranty, in a form acceptable to Bank in its sole discretion.

 

F.                                      Borrower shall have delivered to Bank the Term Loan Documents.

 

G.                                     Borrower shall have delivered to Bank evidence satisfactory to Bank that Borrower has obtained insurance policies or binders, with such insurers and in such amounts as may be acceptable to Bank, respecting the Collateral.

 

H.                                    Borrower shall pay Bank all of Bank’s costs, fees (including attorneys’ and paralegals’ fees) and expenses incurred by or charged to Bank in structuring, drafting, or concerning this Agreement or any of the other Term Loan Documents.

 

I.                                         Bank shall have a first priority security interest in the Collateral, subject to no other liens except Permitted Liens.

 

J.                                        Borrower shall have repaid the obligations under the Original Loan Agreement in such amount necessary so that the aggregate outstanding obligations thereunder do not exceed $7,000,000.

 

K.                                    Bank shall have received from Borrower cash in an amount sufficient to cash collateralize all initial Obligations under Term Loan A, which cash collateral shall be held by Bank in such accounts as Bank deems necessary in its sole discretion (such accounts may or may not be interest bearing).

 

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L.                                      Deliver or cause to be delivered to Bank such other executed documents as Bank may reasonably require.

 

4.                                       PAYMENT OF EXPENSES.  Any and all costs, fees and expenses incurred by Bank in connection with Borrower satisfying the terms and conditions set forth in this Agreement (including outside attorneys’ and paralegals’ fees) shall be paid by Borrower to Bank.  In this regard, Borrower hereby authorizes Bank to charge Borrower’s account for the full amount of such costs, fees and expenses.

 

5.                                       AUTHORIZATIONS.  Bank is hereby authorized to make the Term Loans based upon telephonic or other instructions and transaction reports received from Borrower Although Bank shall make a reasonable effort to determine the person’s identity, Bank shall not be responsible for determining the exact identity of the person calling and Bank may act on the instructions of anyone it perceives to be one of the authorized personnel of Bank.

 

6.                                       TERM.  This Agreement shall terminate once all Obligations evidenced by the Term Notes have been fully and indefeasibly paid to Bank.  The Obligations evidenced by the Term Notes, including all accrued and unpaid principal and interest, shall be due and payable on the earlier of the acceleration of any Term Loan upon an Event of Default or otherwise in accordance with the terms of this Agreement, or on the applicable Maturity Date.

 

7.                                       POWER OF ATTORNEY.  Borrower hereby irrevocably makes, constitutes and appoints Bank (and any of Bank’s officers, employees or agents designated by Bank) as Borrower’s true and lawful attorney with power:

 

A.                                   Upon Borrower’s failure or refusal to comply with its undertakings contained in this Agreement, to sign the name of Borrower on any documents which need to be executed, recorded and/or filed in order to perfect or continue perfected Bank’s security interest in the Collateral or to otherwise effectuate the rights of Bank under this Agreement and the other Term Loan Documents;

 

B.                                     To do all things commercially or reasonably necessary to carry out this Agreement.

 

The appointment of Bank as Borrower’s attorney, and each and every one of Bank’s rights and powers, being coupled with an interest, are irrevocable so long as any of the Obligations have not been fully paid and performed.  Neither Bank nor its employees, officers or agents shall be liable for any acts or omissions or for any error in judgment or mistake of fact or law made in good faith except for gross negligence or willful misconduct.

 

8.                                       BORROWER’S REPRESENTATIONS AND WARRANTIES.  Borrower makes the following representations and warranties which shall be deemed to be continuing representations and warranties so long as any portion of any Term Loan remains unpaid.

 

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8.1                                 Existence and Rights.

 

A.                                   Borrower is a corporation duly organized and existing under the laws of the State of Delaware and is qualified and licensed to do business and is in good standing in any state in which the conduct of its business or its ownership of property requires that it be so qualified;

 

B.                                     Borrower has the right and power to enter into this Agreement and each of the other Term Loan Documents;

 

8.2                                 Agreement Authorized.  The execution, delivery and performance by Borrower of this Agreement and each of the other Term Loan Documents: (a) have been duly authorized and do not require the consent or approval of any governmental body or other regulatory authority; and (b) shall not constitute a breach of any provision contained in Borrower’s articles of incorporation or bylaws.

 

8.3                                 Binding Agreement.  This Agreement is the valid, binding and legally enforceable obligation of Borrower in accordance with its terms.

 

8.4                                 No Conflict.  The execution, delivery and performance by Borrower of this Agreement and each of the other Term Loan Documents: (a) shall not constitute an event of default under any agreement, indenture or undertakings to which Borrower is a party or by which it or any of its property may be bound or affected; (b) are not in contravention of or in conflict with any law or regulation; and (c) do not cause any lien, charge or other encumbrance to be created or imposed upon any such property by reason thereof.

 

8.5                                 Subsidiaries.  Except as set forth on Schedule 8.5, Borrower has no Subsidiaries.

 

8.6                                 Financial Condition; No Adverse Change.  Borrower has furnished to Bank its audited financial statements for its fiscal year ended January 30, 2011,  and unaudited financial statements for the fiscal-year-to-date period ended October 31, 2011, and those statements fairly present Borrower’s financial condition as of those dates and the results of Borrower’s operations and cash flows for the periods then ended and were prepared in accordance with GAAP.  Since the date of the most recent financial statements, there has been no Material Adverse Change in Borrower’s business, properties or condition (financial or otherwise).

 

8.7                                 Litigation.  There are no actions, suits or proceedings pending or, to Borrower’s knowledge, threatened against or affecting Borrower or any of its Affiliates or the properties of Borrower or any of its Affiliates before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which, if determined adversely to Borrower or any of its Affiliates, would have a Material Adverse Change on the financial condition, properties or operations of Borrower or any of its Affiliates.

 

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8.8                                 Intellectual Property Rights.

 

A.                                   Owned Intellectual Property.  Set forth on Schedule 8.8 is a complete list of all patents, applications for patents, trademarks, applications to register trademarks, service marks, applications to register service marks, mask works, trade dress and copyrights for which Borrower is the owner of record (the “Owned Intellectual Property”).  Except as set forth below, (A) Borrower owns the Owned Intellectual Property free and clear of all restrictions (including covenants not to sue any Person), court orders, injunctions, decrees, writs or Liens, whether by agreement memorialized in a writing by Borrower or otherwise, (B) no Person other than Borrower owns or has been granted any right in the Owned Intellectual Property, (C) all Owned Intellectual Property is valid, subsisting and enforceable, and (D) Borrower has taken all commercially reasonable action necessary to maintain and protect the Owned Intellectual Property.

 

B.                                     Agreements with Employees and Contractors.  Borrower has entered into a legally enforceable agreement with each Person that is an employee or subcontractor obligating that Person to assign to Borrower, without additional compensation, any Intellectual Property Rights created, discovered or invented by that Person in the course of that Person’s employment or engagement with Borrower (except to the extent prohibited by law), and further obligating that Person to cooperate with Borrower, without additional compensation, to secure and enforce the Intellectual Property Rights on behalf of Borrower, unless the job description of the Person is such that it is not reasonably foreseeable that the employee or subcontractor will create, discover, or invent Intellectual Property Rights.

 

C.                                     Intellectual Property Rights Licensed from Others.  Set forth on Schedule 8.8 is a complete list of all agreements under which Borrower has licensed Intellectual Property Rights from another Person (“Licensed Intellectual Property”) other than readily available, non-negotiated licenses of computer software and other intellectual property used solely for performing accounting, word processing and similar administrative tasks (“Off-the-shelf Software”) and a summary of any ongoing payments Borrower is obligated to make with respect thereto.  Except as set forth on Schedule 8.8, Borrower’s licenses to use the Licensed Intellectual Property are free and clear of all restrictions, Liens, court orders, injunctions, decrees, or writs, whether by agreed to in writing by Borrower or otherwise.  Except as disclosed below, Borrower is not contractually obligated to make royalty payments of a material nature, or pay fees to any owner of, licensor of, or other claimant to, any Intellectual Property Rights.

 

D.                                    Other Intellectual Property Needed for Business.  Except for Off-the-shelf Software and as disclosed on Schedule 8.8, the Owned Intellectual Property and the Licensed Intellectual Property constitute all Intellectual Property Rights used or necessary to conduct Borrower’s business as it is presently conducted or as Borrower reasonably foresees conducting it.

 

E.                                      Infringement.  Except as disclosed on Schedule 8.8, Borrower has no knowledge of, and has not received notice either orally or in writing alleging, any Infringement of another Person’s Intellectual Property Rights (including any claim set forth in writing that Borrower must license or refrain from using the Intellectual Property Rights of any Person) nor, to Borrower’s knowledge, is there any threatened claim or any reasonable basis for any such claim.

 

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8.9                                 Taxes.  Borrower and its Affiliates have paid or caused to be paid to the proper authorities when due all federal, state and local taxes required to be withheld by each of them except for taxes being disputed in good faith and for which adequate reserves exist.  Borrower and its Affiliates have filed all federal, state and local tax returns which to the knowledge of the officers of Borrower or any Affiliate, as the case may be, are required to be filed, and Borrower and its Affiliates have paid or caused to be paid to the respective taxing authorities all taxes as shown on these returns or on any assessment received by any of them to the extent such taxes have become due.

 

8.10                           Titles and Liens.  Borrower has good and marketable title to all Collateral free and clear of all liens other than Permitted Liens.  No financing statement naming Borrower as debtor is on file in any office other than any financing statement filed by Bank in connection with the Original Loan Agreement.

 

8.11                           No Defaults.  Borrower is in compliance with all provisions of all agreements, instruments, decrees and orders to which it is a party or by which it or its property is bound or affected, the breach or default of which could have a Material Adverse Change  on Borrower’s financial condition, properties or operations .

 

8.12                           Submissions to Bank.  All financial and other information provided to Bank by or on behalf of Borrower in connection with Borrower’s request for the term loan contemplated hereby is (i) true and correct in all material respects, (ii) does not omit any material fact that would cause such information to be misleading, and (iii) as to projections, valuations or proforma financial statements, present a good faith opinion as to such projections, valuations and proforma condition and results.

 

8.13                           Environmental Matters.

 

A.                                   Hazardous Substances on Premises.  Except as disclosed on Schedule 8.13, there are not present in, on or under any location of Borrower any Hazardous Substances in such form or quantity as to create any material liability or obligation for either Borrower or Bank under the common law of any jurisdiction or under any Environmental Law, and no Hazardous Substances have ever been stored, buried, spilled, leaked, discharged, emitted or released in, on or under any location of Borrower in such a way as to create a material liability.

 

B.                                     Disposal of Hazardous Substances.  Except as disclosed on Schedule 8.13, Borrower has not disposed of Hazardous Substances in such a manner as to create any material liability under any Environmental Law.

 

C.                                     Claims and Proceedings with Respect to Environmental Law Compliance. Except as disclosed on Schedule 8.13, there have not existed in the past, nor are there any threatened or impending requests, claims, notices, investigations, demands, administrative proceedings, hearings or litigation relating in any way to any location of Borrower or Borrower, alleging material liability under, violation of, or noncompliance with any Environmental Law or any license, permit or other authorization issued pursuant thereto.

 

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D.                                    Compliance with Environmental Law; Permits and Authorizations.  Except as disclosed on Schedule 8.13, Borrower (A) conducts its business at all times in compliance with applicable Environmental Law, (B) possesses valid licenses, permits and other authorizations required under applicable Environmental Law for the lawful and efficient operation of its business, none of which are scheduled to expire, or withdrawal, or material limitation within the next 12 months, and (C) has not been denied insurance on grounds related to potential environmental liability.

 

E.                                      Status of Premises.  Except as disclosed on Schedule 8.13, the locations of Borrower are not and never have been listed on the National Priorities List, the Comprehensive Environmental Response, Compensation and Liability Information System or any similar federal, state or local list, schedule, log, inventory or database.

 

F.                                      Environmental Audits, Reports, Permits and Licenses.  Borrower has delivered to Bank all environmental assessments, audits, reports, permits, licenses and other documents describing or relating in any way to any location of Borrower or Borrower’s businesses.

 

8.14                           Employee Benefit Plans.

 

A.                                   Maintenance and Contributions to Plans.  Except as disclosed on Schedule 8.14, neither Borrower nor any ERISA Affiliate (A) maintains or has maintained any Pension Plan, (B) contributes or has contributed to any Multiemployer Plan, or (C) provides or has provided post-retirement medical or insurance benefits to employees or former employees (other than benefits required under Section 601 of ERISA, Section 4980B of the IRC, or applicable state law).

 

B.                                     Knowledge of Plan Noncompliance with Applicable Law.  Except as disclosed on Schedule 8.14 neither Borrower nor any ERISA Affiliate has (A) knowledge that Borrower or the ERISA Affiliate is not in full compliance with the requirements of ERISA, the IRC, or applicable state law with respect to any Plan, (B) knowledge that a Reportable Event occurred or continues to exist in connection with any Pension Plan, or (C) sponsored a Plan that it intends to maintain as qualified under the IRC that is not so qualified, and no fact or circumstance exists which may have an adverse effect on such Plan’s tax-qualified status.

 

C.                                     Funding Deficiencies and Other Liabilities.  Neither Borrower nor any ERISA Affiliate has liability for any (A) accumulated funding deficiency (as defined in Section 302 of ERISA and Section 412 of the IRC) under any Plan, whether or not waived, (B) withdrawal, partial withdrawal, reorganization or other event under any Multiemployer Plan under Section 4201 or 4243 of ERISA, or (C) event or circumstance which could result in financial obligation to the Pension Benefit Guaranty Corporation, the Internal Revenue Service, the Department of Labor or any participant in connection with any Plan (other than routine claims for benefits under the Plan).

 

9.                                       BORROWER’S COVENANTS.  Borrower covenants and agrees that until the Obligations have been repaid in full, unless Bank shall otherwise consent in writing, Borrower shall do all of the following:

 

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9.1                                 Insurance.  Borrower, at its expense, shall keep and maintain the Collateral insured against loss or damage by fire, theft, explosion, sprinklers and all other hazards and risks ordinarily insured against by other owners who use such properties in similar businesses.  Borrower shall deliver to Bank certified copies of such policies of insurance and evidence of the payments of all premiums therefor.  All such policies of insurance shall be in such form, with such companies, and in such amounts as may be satisfactory to Bank.  All such policies of insurance shall contain an endorsement in a form satisfactory to Bank showing Bank as a loss payee or an additional insured, as applicable, thereof, and all proceeds payable thereunder shall be payable to Bank as its interest may appear and, upon receipt by Bank, shall be applied on account of the Obligations owing to Bank.  To secure the payment of the Obligations, Borrower grants Bank a security interest in and to all such policies of insurance and the proceeds thereof, and Borrower shall direct all insurers under such policies of insurance to pay all proceeds thereof directly to Bank.

 

9.2                                 Submission of Information.  Borrower shall promptly supply Bank with such information concerning the Collateral as Bank may reasonably request from time to time hereafter, and shall promptly notify Bank of any Material Adverse Change in Borrower’s financial condition and of any condition or event which constitutes a breach of, or an event which constitutes an Event of Default.  Borrower shall further provide Bank with:

 

A.                                   Borrower’s quarterly 10Q reports filed with the SEC, within 45 days after the end of each of the Borrower’s first three fiscal quarters of each fiscal year.

 

B.                                     Borrower’s annual 10K reports filed with the SEC, within 90 days after the end of each fiscal year of Borrower.

 

C.                                     Compliance certificate, in form and substance satisfactory to Bank, delivered with each of the reports provided in clauses (A) and (B) above.

 

D.                                    Annual projections of Borrower within 60 days prior to the beginning of each fiscal year, in form and substance satisfactory to Bank.

 

9.3                                 Reimbursement for Bank Expenses.  Upon the demand of Bank, Borrower shall immediately reimburse Bank for all sums expended by Bank which constitute Bank Expenses, and Borrower hereby authorizes and approves all advances and payments by Bank for items constituting Bank Expenses and agrees that all such amounts may be debited from Borrower’s Account by Bank.

 

9.4                                 Financial Covenants.

 

A.                                   Fixed Charge Coverage Ratio.  Borrower shall maintain its Fixed Charge Coverage Ratio at a ratio not less than (1) 1.25:1.00, measured quarterly for the quarter ending January 31, 2012, (2) 2.75:1.00, measured quarterly for the quarter ending April 30, 2012, and (3) 1.15:1.00, measured quarterly on a trailing 12 month basis, for the quarter ending July 31, 2012 and as of the last day of each quarter thereafter.

 

16

 

B.                                     Minimum Profitability.  Borrower shall maintain its quarterly after tax net profit at an amount not less than the amounts set forth below, measured quarterly as of the last day of each quarter set forth below:

 

	
Quarter Ending
    	
 
    	
Minimum Profitability
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
January 31 of each   year
    	
 
    	
$
    	
1,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
April 30 of each year
    	
 
    	
$
    	
1,700,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
July 31 of each year
    	
 
    	
$
    	
1,400,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
October 31 of each   year
    	
 
    	
$
    	
1,100,000
    	
 
    

 

For the avoidance of doubt, the parties hereby agree that the financial covenants set forth above or in the Original Loan Agreement will not be tested for the fiscal quarter ending October 31, 2011.

 

9.5                                 Collateral.

 

A.                                   After the occurrence and during the continuation of an Event of Default, Borrower and all related parties shall pay to Bank all proceeds of the Collateral, to be applied to Borrower’s Obligations, promptly upon receipt of such proceeds.

 

B.                                     Borrower shall not encumber any portion of the Collateral, other than in favor of Bank, without the prior written consent of Bank.

 

9.6                                 Books and Records; Examinations and Inspections.

 

A.                                   Books and Records; Inspection.  Borrower shall keep complete and accurate books and records with respect to the Collateral and Borrower’s business and financial condition and any other matters that Bank may request, in accordance with GAAP. Borrower shall permit any employee, attorney, accountant or other agent of Borrower to audit, review, make extracts from and copy any of its books and records at any time during ordinary business hours, and to discuss Borrower’s affairs with any of its directors, officers, employees, owners or agents.

 

B.                                     Authorization to Borrower’s Agents to Make Disclosures to Bank.  Borrower authorizes all accountants and other Persons acting as its agent to disclose and deliver to Bank’s employees, accountants, attorneys and other Persons acting as its agent, at Borrower’s expense, all financial information, books and records, work papers, management reports and other information in their possession regarding Borrower.

 

C.                                     Collateral Exams and Inspections.  Borrower shall permit Bank’s employees, accountants, attorneys or other Persons acting as its agent, to examine and inspect any Collateral or any other property of Borrower at any time during ordinary business hours on reasonable notice.

 

17

 

D.                                    Collateral Appraisals.  Bank may obtain an appraisal of the Collateral at such time as it deems necessary during the existence of an Event of Default but no more than once per calendar year so long as no Event of Default exists at the time of such appraisal.

 

9.7                                 Use of Proceeds. Borrower shall use the proceeds of the Term Loans for ordinary working capital and other lawful purposes.

 

9.8                                 Defaults.  No later than 3 business days after learning of the probable occurrence of any Event of Default, Borrower shall deliver to Bank a written notification of the Event of Default and the steps being taken by Borrower to cure the Event of Default.

 

9.9                                 Liens.  Borrower shall not create, incur or suffer to exist any lien upon any of its assets, now owned or later acquired, as security for any indebtedness, except Permitted Liens.

 

9.10                           Indebtedness.  Borrower shall not incur, create, assume or permit to exist any indebtedness or liability on account of deposits or letters of credit issued on Borrower’s behalf, or advances or any indebtedness for borrowed money of any kind, whether or not evidenced by an instrument, exceeding $100,000 in the aggregate, except indebtedness described in this Agreement.

 

9.11                           Guaranties.  Borrower shall not assume, guarantee, endorse or otherwise become directly or contingently liable for the obligations of any Person, exceeding $100,000 in the aggregate.

 

9.12                           Investments and Subsidiaries.  Borrower shall not make or permit to exist any loans or advances to, or make any investment or acquire any interest whatsoever in, any Person or Affiliate, including any partnership or joint venture, nor purchase or hold beneficially any stock or other securities or evidence of indebtedness of any Person or Affiliate if the aggregate amount of such loans, advances or investments exceeds $100,000 at any time.  Notwithstanding the above, so long as no Event of Default exists or results therefrom, Borrower may make acquisitions that satisfy the following: (i) the aggregate cash and non-cash consideration paid therefor is not greater than $5,000,000 in any fiscal year and not greater than $10,000,000 in the aggregate, measured at any time, and (ii) prior to the closing of any such acquisition, Borrower has delivered to Bank the purchase agreements and documents related to such acquisition.

 

9.13                           Bank as Primary Depository Institution.  Borrower shall use Bank as its primary depository institution and shall maintain all of its bank accounts at Bank.

 

10.                                 EVENTS OF DEFAULT.  Any one or more of the following events shall constitute an Event of Default by Borrower under this Agreement:

 

10.1                           Failure to Pay Obligations.  If Borrower fails to pay when due and payable or when declared due and payable all or any portion of the Obligations owing to Bank (whether of principal, taxes, reimbursement of Bank Expenses, or otherwise);

 

18

 

10.2                           Failure to Perform.  If Borrower or Guarantor fails or neglects to perform, keep or observe any term, provision, condition, covenant, agreement, warranty or representation contained in this Agreement, in any of the other Term Loan Documents, or in any other present or future agreement between Bank and Borrower and/or Guarantor, following the expiration of any applicable cure period, if any.

 

10.3                           Inaccurate Information.  If any representation, statement, report, or certificate made or delivered by Borrower, or any of its officers, employees or agents, or Guarantor, including those made in any Term Loan Document, to Bank is not true and correct in any material respect.

 

10.4                           Third Party Claim; Insolvency.  If any portion of Borrower’s or Guarantor’s assets are attached for amounts in excess of $250,000, seized, subjected to a writ or distress warrant, or are levied upon, or come into the possession of any Judicial Officer or Assignee, or if Borrower becomes subject to an Insolvency Proceeding, which in the case of an involuntary bankruptcy is not dismissed within 45 days after the petition date;

 

10.5                           Impairment.  If there is a material impairment of the prospect of repayment of all or any portion of the Obligations owing to Bank or a material impairment of the value or priority of Bank’s security interests in the Collateral;

 

10.6                           Liens.  If a judgment or other claim becomes a lien or encumbrance (other than a Permitted Lien) upon all or a material portion of Borrower’s or Guarantor’s assets;

 

10.7                           Misrepresentation.  If any misrepresentation exists now or hereafter in any material warranty or representation made to Bank by Borrower or any officer or director of Borrower, or Guarantor, or if any such warranty or representation is withdrawn by Borrower or by any officer, director or member of Borrower or Guarantor;

 

10.8                           Impairment of Guaranty.  If any guarantor of Borrower’s indebtedness to Bank dies, terminates its guaranty, defaults in the payment or performance of any obligations of guarantor owing to Bank, or becomes the subject of an Insolvency Proceeding;

 

10.9                           Material Adverse Change.    If a Material Adverse Change occurs; and

 

10.10                     Change of Control.  If a Change of Control Occurs.

 

11.                                 BANK’S RIGHTS AND REMEDIES.

 

11.1                           Remedies.  Upon the occurrence of an Event of Default, Bank may, at its election, without notice of its election and without demand, do any one or more of the following, all of which are authorized by Borrower:

 

A.                                   Declare all Obligations, whether arising pursuant to this Agreement, the other Term Loan Documents or otherwise, immediately due and payable.

 

19

 

B.                                     Cease advancing money to or for the benefit of Borrower under any other agreement between Borrower and Bank.

 

C.                                     Terminate this Agreement and/or any other Term Loan Documents as to any future liability or obligation of Bank, but without affecting Bank’s rights and security interest in the Collateral and without affecting the Obligations owing by Borrower to Bank.

 

D.                                    Without notice to or demand upon Borrower or Guarantor, make such payments and do such acts as Bank considers necessary or reasonable to protect its security interest in the Collateral.  Borrower agrees to assemble the Collateral if Bank so requires, and to make the Collateral available to Bank as Bank may designate.  Borrower authorizes Bank to enter the premises where the Collateral is located, take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest or compromise any encumbrance, charge or lien which in the opinion of Bank appears to be prior or superior to its security interest and to pay all expenses incurred in connection therewith.

 

E.                                      Bank is hereby granted a license or other right to use, without charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale and selling any Collateral and Borrower’s rights under all licenses, and all franchise agreements shall insure to Bank’s benefit.

 

F.                                      Maintain, repair, prepare for sale, advertise for sale and sell (in the manner provided for herein) the Collateral.

 

G.                                     Sell the Collateral at either a public or private sale, or both, by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places as is commercially reasonable in the opinion of Bank.

 

H.                                    Any deficiency which exists after disposition of the Collateral as provided above will be paid immediately by Borrower.  Any excess will be returned, without interest and subject to the rights of third parties, to Borrower by Bank.

 

11.2                           Cumulative Rights.  Bank’s rights and remedies under this Agreement and all other agreements shall be cumulative.  Bank shall have all other rights and remedies not inconsistent herewith as provided under applicable laws.  No exercise by Bank of one right or remedy shall be deemed an election, and no waiver by Bank of any default on Borrower’s part shall be deemed a continuing waiver.  No delay by Bank shall constitute a waiver, election or acquiescence by it.

 

12.                                 TAXES AND EXPENSES REGARDING THE COLLATERAL.  If Borrower fails to pay any monies (whether taxes, assessments, insurance premiums, or otherwise) due to third persons or entities, or fails to make any deposits or furnish any required proof of payment or deposit, all as required under the terms of this Agreement, then Bank may, to the extent that it determines that such failure by Borrower could have a Material Adverse Change on Bank’s interests in the Collateral, in its discretion and upon ten (10) days prior notice to Borrower, (i) make payment of the same or any part thereof; and/or (ii) set up such reserves in Borrower’s account as Bank deems necessary to protect Bank from the exposure created by such failure.  Any amounts paid or deposited by Bank shall constitute Bank Expenses and become additional Obligations owing to Bank, shall bear interest at the rate set forth herein, and shall be secured by the Collateral.  Any payments made by Bank shall not constitute: (i) an agreement by Bank to make similar payments in the future, or (ii) a waiver by Bank of any Event of Default under this Agreement.  Bank need not inquire as to, or contest the validity of, any such expense, tax, security interest, encumbrance or lien, and the receipt of the usual official notice for the payment thereof shall be conclusive evidence that the same was validly due and owing.

 

20

 

13.                                 WAIVERS.

 

13.1                           Application of Payments.  Borrower waives the right to direct the application of any and all payments at any time or times hereafter received by Bank on account of any Obligations owed by Borrower to Bank, and Borrower agrees that Bank shall have the continuing exclusive right to apply and reapply such payments in any manner as Bank may deem advisable, notwithstanding any entry by Bank upon its books.

 

13.2                           Demand, Protest, Default, Etc.  Except as otherwise provided herein, Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, notice of nonpayment at maturity, release, compromise, settlement, extension or renewal of any or all commercial paper, accounts, documents, instruments, chattel paper, and guarantees at any time held by Bank on which Borrower may in any way be liable.

 

14.                                 NOTICES.  Unless otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement shall be in writing and either personally served or sent by regular United States mail, postage prepaid, to Borrower or to Bank, as the case may be, at its address set forth below:

 

	
If to Borrower:
    	
Cherokee, Inc.
    
	
 
    	
6835   Valjean Avenue
    
	
 
    	
Van   Nuys, California 91406
    
	
 
    	
Attn:    Mark DiSiena
    
	
 
    	
Fax   Number: (818) 908-9191
    
	
 
    	
 
    
	
If to Bank:
    	
U.S.   BANK NATIONAL ASSOCIATION
    
	
 
    	
15910   Ventura Boulevard, Suite 1712
    
	
 
    	
Encino,   California 91436
    
	
 
    	
Attn:   Gary   Terrasi
    
	
 
    	
Fax   Number: (818) 789-3041
    
	
 
    	
 
    
	
With copy to:
    	
BUCHALTER   NEMER
    
	
 
    	
1000 Wilshire Boulevard, Suite 1500
    
	
 
    	
Los Angeles, California 90017
    
	
 
    	
Attn:   Hamid Namazie, Esq.
    
	
 
    	
Fax   Number: (213) 630-5844
    

 

21

 

The parties hereto may change the address at which they are to receive notices and the telecopier number at which they are to receive telecopies hereunder, by notice in writing in the foregoing manner given to the other.  All notices or demands sent in accordance with this Section 14 shall be deemed received on the earlier of the date of actual receipt or five (5) days after the deposit thereof in the mail.

 

15.                                 DESTRUCTION OF BORROWER’S DOCUMENTS.  Any documents, schedules, invoices or other papers delivered to Bank may be destroyed or otherwise disposed of by Bank after they are delivered to or received by Bank, unless Borrower requests, in writing, the return of the said documents, schedules, invoices or other papers and makes arrangements, at Borrower’s expense, for their return.

 

16.                                 CHOICE OF LAW. THE VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION, INTERPRETATION AND ENFORCEMENT OF THE RIGHTS OF THE PARTIES HEREUNDER AND UNDER ANY OF THE OTHER TERM LOAN DOCUMENTS AND THE CREATION, PERFECTION AND ENFORCEMENT OF ANY LIENS GRANTED BY THE TERM LOAN DOCUMENTS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.  THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA.  BORROWER WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO SUCH VENUE.

 

17.                                 GENERAL PROVISIONS.

 

17.1                           Binding Agreement.  This Agreement shall be binding and deemed effective when executed by Borrower and accepted and executed by Bank.

 

17.2                           Bank’s Right to Setoff.  As additional security for the payment of the Obligations, Borrower hereby grants to Bank a security interest in, a lien on and an express contractual right to set off against all depository account balances, cash and any other property of Borrower now or hereafter in the possession of Bank and the right to refuse to allow withdrawals from any account (collectively, “Setoff”).  Bank may, at any time upon the occurrence of an Event of Default, Setoff against the Obligations whether or not the Obligations are then due or have been accelerated, all without any advance or contemporaneous notice or demand of any kind to Borrower, such notice and demand being expressly waived by Borrower.

 

17.3                           Right to Grant Participations.  This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties; provided, however , that Borrower may not assign this Agreement or any rights hereunder without Bank’s prior written consent and any prohibited assignment shall be absolutely void.  No consent to an assignment by Bank shall release Borrower from its Obligations to Bank.  Bank may assign this Agreement and its rights and duties hereunder.  Bank reserves the right to sell, assign, transfer, negotiate or grant participations in all or any part of, or any interest in, Bank’s rights and benefits hereunder so long as Borrower is not responsible for any costs, fees or expenses incurred by Bank in connection with such sale, assignment, transfer, negotiation or grant.  In connection therewith, Bank may disclose all documents and information which Bank now or hereafter may have relating to Borrower or Borrower’s business, provided that such prospective assignee, transferee, or participant agrees to keep confidential any such documents and information that have not been publicly disclosed by Borrower.

 

22

 

17.4                           Section Headings.  Section headings and section numbers have been set forth herein for convenience only.  Unless the contrary is compelled by the context, everything contained in each section applies equally to this entire Agreement.

 

17.5                           Interpretation.  Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against Bank or Borrower, whether under any rule of construction or otherwise.  On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of all parties hereto.

 

17.6                           Severability.  Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

 

17.7                           Modification and Merger.  This Agreement cannot be changed or terminated orally.  All prior agreements, understandings, representations, warranties and negotiations, if any, are merged into this Agreement.

 

17.8                           Attorneys’ Fees.  In the event that it becomes necessary to employ counsel to enforce the Bank’s rights under any of the Term Loan Documents, Borrower agrees to pay reasonable attorneys’ fees and paralegals’ fees (including allocated costs for in-house legal services provided) and all other fees and costs associated therewith, whether or not suit is brought.

 

17.9                           No Novation.  This Agreement does not extinguish the obligations for the payment of money outstanding under the Original Loan Agreement or discharge or release the obligations or the liens or priority of any mortgage, pledge, security agreement or any other security therefor.  Nothing herein contained shall be construed as a substitution or novation of the obligations outstanding under the Original Loan Agreement or instruments securing the same, which shall remain in full force and effect, except as modified hereby or by instruments executed concurrently herewith.  Nothing expressed or implied in this Agreement shall be construed as a release or other discharge of Borrower from any of its obligations or liabilities under the Original Loan Agreement or any of the security agreements, pledge agreements, mortgages, or other loan documents executed in connection therewith.  Borrower hereby (i) confirms and agrees that each Term Loan Document to which it or its predecessor in interest is a party or to which it is a successor by operation of law is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects except that on and after the Closing Date all references in any such Term Loan Document to “the Loan Agreement”, “thereto”, “thereof”, “thereunder” or words of like import referring to the Original Loan Agreement shall mean the Original Loan Agreement as amended and restated by this Agreement; and (ii) confirms and agrees that to the extent that any such Term Loan Document purports to assign or pledge to Bank, or to grant to Bank a security interest in or lien on, any collateral as security for the Obligations of Borrower from time to time existing in respect of the Original Loan Agreement, such pledge, assignment or grant of the security interest or lien is hereby ratified and confirmed in all respects.

 

23

 

17.10                     JURY TRIAL.  BORROWER AND BANK EACH WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE TERM LOAN DOCUMENTS.

 

[Remainder of Page Intentionally Blank]

 

[Signature Pages to Follow]

 

24

 

IN WITNESS WHEREOF, Borrower has executed this Agreement as of the date written above.

 

 

	
 
    	
 
    	
CHEROKEE INC.,
    
	
 
    	
 
    	
a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
/s/ Henry Stupp
    
	
 
    	
 
    	
Name:
    	
Henry Stupp 
    
	
 
    	
 
    	
Title:
    	
Chief Executive Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
U.S. BANK NATIONAL ASSOCIATION
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
/s/ Gary P. Terrasi
    
	
 
    	
 
    	
Name:
    	
Gary P. Terrasi
    
	
 
    	
 
    	
Title:
    	
Vice President

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