EXHIBIT 10.2
STOCK PLEDGE AGREEMENT
This STOCK PLEDGE AGREEMENT is made and entered into as of the 26th day of
July, 2002, by and between Xxxxxxx X. Xxxxxxxxxxx, a resident of the State of
Minnesota (the "PLEDGOR") and G&K Services, Inc., a Minnesota corporation
("PLEDGEE").
INTRODUCTION
A. PROMISSORY NOTE. Pledgor has issued a Promissory Note in the
original principal amount of Four Hundred Thousand Dollars ($400,000) (the
"PRINCIPAL SUM").
B. SECURITY. To induce Pledgee to enter into the transactions described
above, and as security for payments due under the Note, Pledgor has agreed to
pledge shares of Ecolab Inc., a Delaware corporation (the "Shares"), which
Shares have a value of at least 130% of the Principal Sum.
AGREEMENT
NOW, THEREFORE, in order to secure payment of all amounts due and owing
Pledgee under the Note (collectively, the "OBLIGATIONS"), and in consideration
of the facts recited above (which are a part of this Agreement) and the promises
set forth below, it is agreed:
1. PLEDGE. As collateral for the payment of the Obligations, Pledgor
hereby grants a security interest to Pledgee and deposits with Pledgee
(accompanied by a stock power in blank) the Shares (which Shares, as adjusted
from time to time as provided herein, shall hereinafter to be referred to as the
"PLEDGED STOCK"), and Pledgor agrees to perform the obligations set forth
herein. Pledgor hereby appoints Pledgee as attorney-in-fact to arrange for the
transfer of the Pledged Stock on the books of the Company into the name of
Pledgee if an Event of Default (as defined below) occurs as set forth herein.
The Pledged Stock shall be held and disposed of pursuant to the terms of this
Agreement.
2. FURTHER ASSURANCES. Pledgor agrees at any time, and from time to
time, to execute such other instruments as Pledgee may reasonably request to
establish, maintain and perfect the security interest in the Pledged Stock
conveyed by this Agreement.
3. RIGHTS OF PLEDGOR. Prior to the occurrence of an Event of Default:
(a) Pledgor shall have the right to exercise all voting and other
powers pertaining to the Pledged Stock for all purposes; and
(b) All dividends or other distributions with respect to the
Pledged Stock shall be payable to Pledgor; provided, however, that
following an Event of Default, all dividends or other distributions with
respect to the Pledged Stock shall be payable to Pledgee.
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4. REPRESENTATIONS AND WARRANTIES. Pledgor represents and warrants as
follows:
(a) Pledgor will not sell or otherwise dispose of any Pledged
Stock or any interest therein without the prior written consent of the
Pledgee; and
(b) Throughout the term of this Agreement, Pledgor will keep the
Pledged Stock free and clear of all security interests, liens, and
encumbrances, except the security interest granted hereunder.
5. ADJUSTMENT. If during the term of this Agreement any share dividend,
reclassification, readjustment or other change is declared or made in the
capital structure of the Company, then all new, substituted, and additional
shares, or other securities issued by reason of original issuance of the Pledged
Stock shall be subject to the terms of this Agreement in the same manner as, and
as a part of, the Pledged Stock.
6. RELEASE OF SHARES; TERMINATION. On each Payment Date (as such term
is defined in the Note), Pledgee agrees to release Shares of Pledged Stock to
the extent that the remaining Shares have an aggregate value of 130% of the
Obligations, and Pledgee shall transfer to Pledgor such released Shares and
deliver any assignments separate from certificate for cancellation relating
thereto. Upon full performance of all of the Obligations, Pledgee shall transfer
to Pledgor all of the Pledged Stock and deliver any assignments separate from
certificate for cancellation, and all rights received by Pledgee under this
Agreement shall terminate.
7. EVENTS OF DEFAULT. An event of default under this Agreement ("EVENT
OF DEFAULT") shall occur when an Event of Default occurs under the Note, and
remains uncured for thirty (30) days after written notice of such default is
given by Pledgee to Pledgor.
8. REMEDIES. Upon the occurrence of an Event of Default and at any time
thereafter, Pledgee may exercise any one or more of the following rights or
remedies:
(a) exercise all voting rights, rights to receive dividends and
other distributions, and other rights as a holder of the Pledged Stock;
(b) exercise and enforce any or all rights and remedies available
upon default to a secured party under the Uniform Commercial Code,
including (i) the right to offer and sell the Pledged Stock privately to
purchasers who will agree to take the Pledged Stock for investment and not
with a view to distribution, and who will agree to the imposition of
restrictive legends on any certificates representing the Pledged Stock,
and (ii) the right to arrange for a sale that would otherwise qualify as
exempt from registration under the Securities Act of 1933, as amended;
and, if notice to Pledgor of any intended disposition of the Pledged Stock
or any other intended action is required by law in a particular instance,
such notice shall be deemed commercially reasonable if given at least
twenty (20) calendar days prior to the date of intended disposition or
other action; and
(c) exercise or enforce any or all other rights or remedies
available to Pledgee by law or agreement against the Pledged Stock,
against Pledgor or against any other person or property.
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9. APPLICATION OF PROCEEDS. The proceeds of any sale of all or a part
of the Pledged Stock shall be applied as follows:
(a) First, to the payment of all costs and expenses incurred by
Pledgee in enforcing its rights under this Agreement, including without
limitation, the reasonable fees of attorneys or other agents employed by
Pledgee in connection therewith;
(b) Second, to the payment of all of the Obligations then due and
owing; and
(c) Third, any surplus remaining after application of the proceeds
pursuant to subparagraphs (a) and (b) above shall be paid to Pledgor or
the successors or assigns thereof.
Pledgor shall remain liable to Pledgee for any deficiency.
10. MISCELLANEOUS. The parties agree as follows:
(a) No waiver of any of the provisions or conditions of this
Agreement shall be effective unless such waiver is in writing and signed
by the party claimed to have given, or consented to, such waiver.
(b) No failure on the part of Pledgee to exercise, and no delay on
the part of Pledgee in exercising, any right, power, or remedy pursuant to
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise by Pledgee of any right, power, or remedy hereunder
preclude any other or further exercise thereof or the exercise of any
other right, power, or remedy. The remedies herein provided are cumulative
and shall not be exclusive of any other remedies provided by law or
agreement.
(c) The terms and conditions of this Agreement shall inure to the
benefit of, and be binding upon, the respective legal representatives,
successors and permitted assigns of the parties; provided, however, that
neither party may assign this Agreement or its obligations, duties, or
liabilities hereunder without the express prior written consent of the
other party.
(d) This Agreement is delivered and is intended to be performed in
the State of Minnesota and should be construed and enforced in accordance
with the laws of such State, without regard to conflict of law principles.
(e) All notices, requests, demands, and other communications
hereunder shall be in writing, and shall be deemed to have been duly given
three days after mailed if sent by registered mail, return receipt
requested, postage prepaid, to the parties at the following addresses (or
to any other address given to the other party pursuant to the provisions
of this subsection):
If to Pledgor: If to Pledgee:
______________________ G&K Services, Inc.
______________________ 0000 Xxxx Xxxxxxx, Xxxxx 0000
______________________ Xxxxxxxxxx, XX 00000
______________________ Attention: Chief Financial Officer
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(f) This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(g) This Agreement may not be amended except by written agreement
executed by all parties hereto.
(h) If any provision or application of this Agreement is held
unlawful or unenforceable in any respect, such illegality or
unenforceability shall not affect other provisions or applications which
can be given effect, and this Agreement shall be construed as if the
unlawful or unenforceable provision or application had never been
contained herein or prescribed hereby.
(i) All representations and warranties contained in this Agreement
shall survive the execution, delivery, and performance of this Agreement
and any other documents or instruments executed or delivered in connection
with or pursuant to any of the foregoing.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
PLEDGOR:
/s/ Xxxxxxx X. Xxxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxxx
PLEDGEE:
G&K SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
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Its: Vice President, Human Resources
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