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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 19, 2011


ECOLAB INC.
(Exact name of registrant as specified in charter)

Delaware
(State or other jurisdiction
of incorporation) 		  1-9328
(Commission File Number) 		  41-0231510
(IRS Employer
Identification No.)
370 Wabasha Street North
Saint Paul, Minnesota
(Address of principal executive offices
and Zip Code) 		  55102
(Zip Code)

Registrant's telephone number, including area code: 1-800-232-6522

Not applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

ý
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01    Entry into a Material Definitive Agreement.

Agreement and Plan of Merger

        On July 19, 2011, Ecolab Inc., a Delaware corporation ("Ecolab"), entered into an Agreement and Plan of Merger (the "Merger Agreement") among Ecolab, Sustainability Partners Corporation, a Delaware corporation and a wholly-owned subsidiary of Ecolab ("Merger Sub"), and Nalco Holding Company, a Delaware corporation ("Nalco"). The Merger Agreement, which has been unanimously approved by the Boards of Directors of each of Ecolab and Nalco, provides for the merger of Nalco with and into Merger Sub (the "Merger"), with Merger Sub continuing as the surviving corporation in the Merger. The Merger is intended to qualify as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.

        Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each share of common stock of Nalco issued and outstanding immediately prior to the effective time (other than shares that are owned by Ecolab or Nalco or any of their respective wholly-owned subsidiaries and shares with respect to which appraisal rights are properly exercised and not withdrawn) will be converted into the right to receive, at the election of the stockholder (subject to the reallocation described below): (i) 0.7005 shares of common stock, par value $1.00 per share, of Ecolab, or (ii) $38.80 in cash, without interest. No fractional shares of Ecolab common stock will be issued in the Merger, and holders of Nalco common stock will receive cash in lieu of any fractional shares of Ecolab common stock.

        The overall mix of consideration paid to stockholders of Nalco will be approximately 30% cash and 70% stock. In order to achieve this mix of consideration, the Merger Agreement provides for adjustments to and reallocation of cash and stock elections made by Nalco stockholders, as well as, the allocation of Nalco shares owned by stockholders who fail to make an election. If Ecolab's common stock averages below $55.39 during the 10 trading days ending on the last full trading day prior to the effective time, then any Nalco stockholder who has not made an election will be deemed to have made an election to receive cash. If Ecolab's common stock averages above $55.39 during such 10 day period, then any Nalco stockholder who has not made an election will be deemed to have made an election to receive stock.

        Nalco stock options and other equity awards generally will convert upon completion of the Merger into stock options and equity awards with respect to Ecolab common stock, after giving effect to appropriate adjustments to reflect the consummation of the Merger.

        Pursuant to the Merger Agreement, at the effective time of the Merger, Ecolab will add to its Board of Directors three current Nalco directors. At the effective time of the Merger, the number of directors constituting the Board of Directors of Ecolab is expected to be 14, including the three former Nalco directors.

        The Merger Agreement contains customary representations, warranties and covenants of both Ecolab and Nalco. These covenants include, among others, (i) an obligation on behalf of both parties to operate their respective businesses consistant with past practices until the Merger is consummated, (ii) limitations on each party's right to solicit or engage in negotiations regarding alternative business combination transactions or to withdraw the support of its Board of Directors for the Merger, and (iii) an obligation that the parties use their respective reasonable best efforts to obtain governmental, regulatory and third party approvals.

        The consummation of the Merger is subject to the satisfaction or waiver of closing conditions applicable to both Ecolab and Nalco, including, among others, (i) the receipt of required regulatory approvals, (ii) the adoption of the Merger Agreement by the Nalco stockholders and (iii) the approval of the issuance of Ecolab common stock to Nalco's stockholders by the stockholders of Ecolab. The Merger is not subject to a financing condition.

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        The Merger Agreement provides for termination rights on behalf of both parties, that under specified circumstances Nalco may be required to pay Ecolab a termination fee of $135 million and that under specified circumstances Ecolab may be required to pay Nalco a termination fee of $275 million.

        The Merger Agreement has been included as an exhibit to this Current Report on Form 8-K to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about Ecolab, Merger Sub or Nalco. The Merger Agreement contains representations and warranties that the parties made to each other as of a specific date. The assertions embodied in the representations and warranties in the Merger Agreement were made solely for purposes of the Merger Agreement and the transactions and agreements contemplated thereby among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating the terms of the Merger Agreement. Moreover, some of those representations and warranties may not be accurate or complete as of any specified date, may apply contractual standards of materiality in a way that is different from what may be viewed as material by investors or that is different from standards of materiality generally applicable under the United States federal securities laws or may not be intended as statements of fact, but rather as a way of allocating risk among the parties to the Merger Agreement.

        The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and incorporated herein by reference.

Item 2.02    Results of Operations and Financial Condition .

        On July 20, 2011, Ecolab issued the press release attached to this Current Report as Exhibit 99.1 announcing that it expects adjusted earnings per share for the quarter ended June 30, 2011 to be $0.64.

Item 8.01    Other Information .

        On July 20, 2011, Ecolab issued the press release attached to this Current Report as Exhibit 99.1.

        Ecolab will host a live webcast to review this announcement and earnings guidance at 9:00 a.m. Eastern time, on July 20, 2011. The webcast, along with related presentation slides, will be available to the public on Ecolab's website at www.ecolab.com/investor. A replay of the webcast and related materials will be available at that site for a 30-day period. Listening to the webcast requires Internet access, the Windows Media Player or other compatible streaming media player.

Cautionary Statements Regarding Forward-Looking Information

        This communication contains certain statements relating to future events and our intentions, beliefs, expectations and predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "we believe," "we expect," "estimate," "project," "may," "will," "intend," "plan," "believe," "target," "forecast" (including the negative or variations thereof) or similar terminology used in connection with any discussion of future plans, actions or events generally identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding benefits of the merger, integration plans and expected synergies, the expected timing of completion of the merger, and anticipated future financial and operating performance and results, including estimates for growth. These statements are based on the current expectations of management of Ecolab and Nalco, as applicable. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this communication. These risks and uncertainties include (i) the risk that the stockholders of Nalco may not adopt the merger agreement, (ii) the risk that the stockholders of

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Ecolab may not approve the issuance of Ecolab common stock to Nalco stockholders in the merger, (iii) the risk that the companies may be unable to obtain regulatory approvals required for the merger, or that required regulatory approvals may delay the merger or result in the imposition of conditions that could have a material adverse effect on the combined company or cause the companies to abandon the merger, (iv) the risk that the conditions to the closing of the merger may not be satisfied, (v) the risk that a material adverse change, event or occurrence may affect Ecolab or Nalco prior to the closing of the merger and may delay the merger or cause the companies to abandon the merger, (vi) the risk that an unsolicited offer by another company to acquire shares or assets of Ecolab or Nalco could interfere with or prevent the merger, (vii) problems that may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected, (viii) the possibility that the merger may involve unexpected costs, unexpected liabilities or unexpected delays, (ix) the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies currently expect, (x) the risk that the businesses of the companies may suffer as a result of uncertainty surrounding the merger and (xi) the risk that disruptions from the transaction will harm relationships with customers, employees and suppliers.

        Other unknown or unpredictable factors could also have material adverse effects on future results, performance or achievements of Ecolab, Nalco and the combined company. For a further discussion of these and other risks and uncertainties applicable to the respective businesses of Ecolab and Nalco, see the Annual Reports on Form 10-K of Ecolab and Nalco for the fiscal year ended December 31, 2010 and the companies' other public filings with the Securities and Exchange Commission (the "SEC"). These risks, as well as other risks associated with the merger, will be more fully discussed in the joint proxy statement/prospectus that will be included in the Registration Statement on Form S-4 that Ecolab will file with the SEC in connection with the merger. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this communication may not occur. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this communication. Neither Ecolab nor Nalco undertakes, and each of them expressly disclaims, any duty to update any forward-looking statement whether as a result of new information, future events or changes in their respective expectations, except as required by law.

Additional Information and Where to Find it

        Ecolab will file with the SEC a registration statement on Form S-4 that will include a joint proxy statement of Ecolab and Nalco that will also constitute a prospectus of Ecolab relating to the proposed transaction. WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION about Ecolab, Nalco and the proposed merger. Investors and security holders will be able to obtain these materials (when they are available) and other documents filed with the SEC free of charge at the SEC's website, www.sec.gov . In addition, copies of the registration statement and joint proxy statement/prospectus (when they become available) may be obtained free of charge by accessing Ecolab's website at www.ecolab.com by clicking on the "Investor" link and then clicking on the "SEC Filings" link or by writing Ecolab at 370 Wabasha Street North, Saint Paul, Minnesota, 55102, Attention: Corporate Secretary or by accessing Nalco's website at www.nalco.com by clicking on the "Investors" link and then clicking on the "SEC Filings" link or by writing Nalco at 1601 West Diehl Road, Naperville, Illinois 60563, Attention: Corporate Secretary and security holders may also read and copy any reports, statements and other information filed by Ecolab or Nalco with the SEC, at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC's website for further information on its public reference room.

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Participants in the Merger Solicitation

        Ecolab, Nalco and certain of their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Ecolab's directors and executive officers is available in its proxy statement filed with the SEC by Ecolab on March 18, 2011 in connection with its 2011 annual meeting of stockholders, and information regarding Nalco's directors and executive officers is available in its proxy statement filed with the SEC by Nalco on March 14, 2011 in connection with its 2011 annual meeting of stockholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the registration statement and joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

Non-Solicitation

        This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Item 9.01.    Financial Statements and Exhibits .

        (d)    Exhibits .

Exhibit No.   Description
  2.1   Agreement and Plan of Merger, dated as of July 19, 2011, among Ecolab Inc., Sustainability Partners Corporation and Nalco Holding Company.

 
99.1
 
Press release dated July 20, 2011.

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SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:    July 20, 2011                                                           

    ECOLAB INC.

 
 
By:
 
/s/ MICHAEL C. MCCORMICK
Michael C. McCormick
Assistant Secretary

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EXHIBIT INDEX

Exhibit No.   Description
  2.1   Agreement and Plan of Merger, dated as of July 19, 2011, among Ecolab Inc., Sustainability Partners Corporation and Nalco Holding Company.

 
99.1
 
Press release dated July 20, 2011.



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SIGNATURES
EXHIBIT INDEX

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EXHIBIT 2.1

EXECUTION COPY


AGREEMENT AND PLAN OF MERGER

AMONG

ECOLAB INC.,

SUSTAINABILITY PARTNERS CORPORATION

AND

NALCO HOLDING COMPANY

DATED AS OF JULY 19, 2011

TABLE OF CONTENTS

 
  Page

ARTICLE I DEFINED TERMS

Section 1.1 Certain Defined Terms

  1

Section 1.2 Additional Defined Terms

  10

Section 1.3 Interpretation

  12

ARTICLE II THE MERGER AND CERTAIN RELATED MATTERS

Section 2.1 The Merger

  12

Section 2.2 Closing

  13

Section 2.3 Effective Time

  13

Section 2.4 Surviving Corporation Constituent Documents

  13

Section 2.5 Surviving Corporation Directors and Officers

  13

Section 2.6 Ecolab Board of Directors

  13

Section 2.7 Effect on Capital Stock

  13

Section 2.8 Proration

  15

Section 2.9 Elections

  16

Section 2.10 Treatment of Nalco Equity-Based Awards

  17

ARTICLE III EXCHANGE OF SHARES

Section 3.1 Surrender and Payment

  19

Section 3.2 Lost, Stolen or Destroyed Certificates

  21

Section 3.3 Withholding Rights

  21

Section 3.4 Further Assurances

  22

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF NALCO

Section 4.1 Organization

  22

Section 4.2 Subsidiaries

  22

Section 4.3 Capitalization

  23

Section 4.4 Authorization; Board Approval; Voting Requirements

  23

Section 4.5 Takeover Statute; No Restrictions on the Merger

  24

Section 4.6 Consents and Approvals; No Violations

  24

Section 4.7 SEC Reports; Nalco Financial Statements

  25

Section 4.8 Absence of Undisclosed Liabilities

  26

Section 4.9 Form S-4; Joint Proxy Statement/Prospectus

  26

Section 4.10 Absence of Certain Changes

  26

Section 4.11 Litigation

  26

Section 4.12 Compliance with Laws

  26

Section 4.13 Taxes

  28

Section 4.14 Real Property

  30

Section 4.15 Employee Benefit Plans and Related Matters; ERISA

  31

Section 4.16 Employees; Labor Matters

  32

Section 4.17 Intellectual Property

  33

Section 4.18 Contracts

  34

Section 4.19 Environmental Laws and Regulations

  35

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  Page

Section 4.20 Insurance Coverage

  35

Section 4.21 Foreign Corrupt Practices and International Trade Sanctions

  35

Section 4.22 Opinion of Financial Advisor

  36

Section 4.23 Brokers

  36

Section 4.24 Ownership of Ecolab Common Stock

  37

Section 4.25 No Other Representations or Warranties

  37

ARTICLE V REPRESENTATIONS AND WARRANTIES OF ECOLAB AND MERGER SUB

Section 5.1 Organization

  37

Section 5.2 Subsidiaries

  37

Section 5.3 Capitalization

  38

Section 5.4 Authorization; Board Approval; Voting Requirements

  38

Section 5.5 Consents and Approvals; No Violations

  39

Section 5.6 SEC Reports; Ecolab Financial Statements

  40

Section 5.7 Absence of Undisclosed Liabilities

  41

Section 5.8 Form S-4; Joint Proxy Statement/Prospectus

  41

Section 5.9 Absence of Certain Changes

  41

Section 5.10 Litigation

  41

Section 5.11 Compliance with Laws

  41

Section 5.12 Taxes

  43

Section 5.13 Real Property

  45

Section 5.14 Employee Benefit Plans and Related Matters; ERISA

  46

Section 5.15 Employees; Labor Matters

  47

Section 5.16 Intellectual Property

  48

Section 5.17 Contracts

  49

Section 5.18 Environmental Laws and Regulations

  50

Section 5.19 Insurance Coverage

  50

Section 5.20 Foreign Corrupt Practices and International Trade Sanctions

  51

Section 5.21 Financing

  51

Section 5.22 Opinion of Financial Advisor

  51

Section 5.23 Brokers

  52

Section 5.24 Ownership of Nalco Common Stock

  52

Section 5.25 No Restrictions on the Merger

  52

Section 5.26 No Other Representations or Warranties

  52

ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS

Section 6.1 Covenants of Nalco

  52

Section 6.2 Covenants of Ecolab

  55

ARTICLE VII ADDITIONAL AGREEMENTS

Section 7.1 Preparation and Mailing of Joint Proxy Statement/Prospectus

  57

Section 7.2 Stockholders Meetings; Recommendations

  58

Section 7.3 Access to Information; Confidentiality

  59

Section 7.4 Consents and Approvals

  59

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  Page

Section 7.5 No Solicitation by Nalco

  61

Section 7.6 No Solicitation by Ecolab

  63

Section 7.7 Employee Matters

  65

Section 7.8 Fees and Expenses

  66

Section 7.9 Directors' and Officers' Indemnification and Insurance

  66

Section 7.10 Public Announcements

  67

Section 7.11 Notice of Certain Events

  67

Section 7.12 Listing of Shares of Ecolab Common Stock

  67

Section 7.13 Section 16 of the Exchange Act

  68

Section 7.14 State Takeover Laws

  68

Section 7.15 Stockholder Litigation

  68

Section 7.16 Control of Operations

  68

Section 7.17 Certain Transfer Taxes

  68

Section 7.18 Reorganization Treatment

  68

Section 7.19 Tax Representation Letters

  68

Section 7.20 Dividends

  69

ARTICLE VIII CONDITIONS PRECEDENT

Section 8.1 Conditions to Each Party's Obligation to Effect the Merger

  69

Section 8.2 Conditions to Obligations of Ecolab and Merger Sub

  70

Section 8.3 Conditions to Obligations of Nalco

  71

Section 8.4 Frustration of Closing Conditions

  71

ARTICLE IX TERMINATION AND AMENDMENT

Section 9.1 Termination

  71

Section 9.2 Effect of Termination

  73

Section 9.3 Termination Fee and Expense Reimbursement

  73

ARTICLE X GENERAL PROVISIONS

Section 10.1 Non-Survival of Representations, Warranties and Agreements

  75

Section 10.2 Notices

  75

Section 10.3 Counterparts; Effectiveness

  76

Section 10.4 Entire Agreement; Third Party Beneficiaries

  76

Section 10.5 Severability

  76

Section 10.6 Assignment

  76

Section 10.7 Amendment

  76

Section 10.8 Extension; Waiver

  77

Section 10.9 Governing Law and Venue: Waiver of Jury Trial

  77

Section 10.10 Enforcement

  78

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AGREEMENT AND PLAN OF MERGER

        This AGREEMENT AND PLAN OF MERGER dated as of July 19, 2011 (this " Agreement ") is made and entered into among Ecolab Inc., a Delaware corporation (" Ecolab "), Sustainability Partners Corporation, a Delaware corporation and a direct, wholly-owned Subsidiary of Ecolab (" Merger Sub "), and Nalco Holding Company, a Delaware corporation (" Nalco "). Ecolab, Merger Sub and Nalco are referred to in this Agreement individually as a " Party " and collectively as the " Parties ."


RECITALS

        WHEREAS, the Boards of Directors of Ecolab, Merger Sub and Nalco have each determined that the transactions contemplated by this Agreement are consistent with, and will further, their respective business strategies and goals, and have deemed it advisable and in the best interests of their respective companies and stockholders that Ecolab and Nalco enter into a business combination;

        WHEREAS, in furtherance thereof, the Boards of Directors of Ecolab, Merger Sub and Nalco have approved and declared advisable this Agreement and the merger of Nalco with and into Merger Sub (the " Merger ") in accordance with the applicable provisions of the General Corporation Law of the State of Delaware (the " DGCL ") and upon the terms and subject to the conditions set forth in this Agreement; and

        WHEREAS, it is intended that for U.S. federal income tax purposes the Merger will qualify as a reorganization under Section 368(a) of the Code, this Agreement will constitute a plan of reorganization, and Ecolab, Nalco and Merger Sub each will be a party to such reorganization within the meaning of Section 368(b) of the Code.

        NOW, THEREFORE, in consideration of the foregoing and their respective representations, warranties, covenants and agreements set forth in this Agreement, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE I
DEFINED TERMS

         Section 1.1    Certain Defined Terms.     As used in this Agreement, the following terms have the meanings specified in this Section 1.1 .

        " Affiliate " means, with respect to any Person, another Person that directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such first Person, where "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of voting securities, by Contract, as trustee or executor or otherwise.

        " Available Cash Amount " means an amount of cash equal to 30% of the product of (a) $38.80 and (b) the number of issued and outstanding shares of Nalco Common Stock immediately prior to the Effective Time (other than Excluded Shares or Dissenting Shares).

        " Base Ecolab Stock Price " means $55.39.

        " Beneficial Owner " means, with respect to a Security, any Person who, directly or indirectly, through any Contract, relationship or otherwise, has or shares (a) the power to vote, or to direct the voting of, such Security, (b) the power to dispose of, or to direct the disposition of, such Security or (c) the ability to profit or share in any profit derived from a transaction in such Security. The term " Beneficial Ownership " will be construed accordingly.

        " Board of Directors " means the board of directors of a specified Person, or any committee thereof.

        " Burdensome Condition " means making proposals, executing, carrying out or terminating Contracts (including consent decrees) or submitting to Laws (a) providing for the license, sale or other disposition or holding separate (through the establishment of trust or otherwise) of assets or categories of assets of Ecolab, Nalco (or the Surviving Corporation after the Effective Time) or their respective

Subsidiaries, or the disposition or holding separate of the capital stock of one or more Ecolab Subsidiaries or Nalco Subsidiaries, in any case which, in the aggregate, accounted for annual net sales for the most recently completed fiscal year exceeding $200,000,000, or (b) imposing or seeking to impose any material limitation on the ability of Ecolab, Nalco (or the Surviving Corporation after the Effective Time) or any of their respective Subsidiaries to conduct their respective businesses (including with respect to market practices and structure) or own such assets or to acquire, hold or exercise full rights of ownership of the business of Ecolab, Nalco (or the Surviving Corporation after the Effective Time) or their respective Subsidiaries, in any case which, in the aggregate, affects or relates to business units of Ecolab, Nalco (or the Surviving Corporation after the Effective Time) or their respective Subsidiaries that accounted for annual net sales for the most recently completed fiscal year exceeding $200,000,000.

        " Business Day " means any day, except Saturday or Sunday, on which commercial banks are not required or authorized to close in the City of New York.

        " Change " means a change, circumstance, condition, event, effect, development or state of facts.

        " Closing Ecolab Stock Price " means the average VWAP price per share, rounded to four decimals, of Ecolab Common Stock, for the period of 10 consecutive trading days ending on the last full trading day prior to the Effective Time.

        " Code " means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

        " Competition Law " means any Law, including the HSR Act, intended to prohibit, restrict or regulate actions having an anticompetitive effect or purpose, including competition, restraint of trade, anti-monopolization, merger control or antitrust Laws.

        " Constituent Documents " means with respect to any entity, its certificate or articles of incorporation, bylaws and any similar charter or other organizational documents of such entity.

        " Contract " means any contract, agreement, lease, sublease, license, sublicense, commitment, understanding, franchise, warranty, guaranty, mortgage, note, bond, option, warrant or other legally binding arrangement, in each case, whether written or oral and whether one or a series of related Contracts.

        " Ecolab Acquisition Proposal " means any proposal or offer from any Person or group for a direct or indirect (a) merger, binding share exchange, recapitalization, reorganization, liquidation, dissolution, business combination or consolidation, or any similar transaction, involving Ecolab, pursuant to which such Person or group (or the shareholders of any Person) would acquire, directly or indirectly, 15 percent or more of the aggregate voting power of Ecolab or of the surviving entity in a merger involving Ecolab or the resulting direct or indirect parent of Ecolab or such surviving entity, (b) sale, lease, license, exchange, mortgage, pledge, transfer or other acquisition or assumption of 15 percent or more of the consolidated net revenues, net income or assets (based on the fair market value thereof) of Ecolab and the Ecolab Subsidiaries, taken as a whole, in one or a series of related transactions, or (c) purchase, tender offer, exchange offer or other acquisition (including by way of merger, consolidation, share exchange or otherwise) that if consummated would result in the Beneficial Ownership by any Person or group of Securities representing 15 percent or more of the then-outstanding Ecolab Common Stock (or of the shares of the surviving entity in a merger or of the direct or indirect parent of the surviving entity in a merger, in each case involving Ecolab); provided that the term " Ecolab Acquisition Proposal " will not include the Merger or the other transactions contemplated by this Agreement.

        " Ecolab Benefit Plan " means any employment, bonus, deferred compensation, incentive compensation, stock purchase, stock option, thirteenth month, termination indemnity, redundancy,

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change in control, performance, retention, severance or termination pay, holiday pay, sick pay, workers' compensation, vacation pay, fringe benefit, educational assistance, housing assistance, relocation or expatriate, moving expense reimbursement, hospitalization or other medical, life, disability, welfare benefit or other insurance, supplemental unemployment benefits, profit-sharing, pension, superannuation or retirement plan, program or Contract, and each other employee benefit plan, program, or Contract (including employment Contracts), whether written or oral, currently maintained or contributed to or required to be contributed to by Ecolab, any Ecolab Subsidiary or any ERISA Affiliate, for the benefit of any current or former director, officer or employee of Ecolab or any Ecolab Subsidiary, other than (i) any Multiemployer Plan or (ii) any such plan, program or Contract that is required by applicable Law.

        " Ecolab Common Stock " means the Common Stock, par value $1.00 per share, of Ecolab (together with the Ecolab Rights attached thereto or associated therewith).

        " Ecolab Financial Statements " means the consolidated financial statements of Ecolab and the Ecolab Subsidiaries included in the Ecolab SEC Documents together, in the case of year-end statements, with reports thereon by PricewaterhouseCoopers LLP, the independent auditors of Ecolab, including in each case a consolidated balance sheet, a consolidated statement of income, a consolidated statement of stockholders' equity and a consolidated statement of cash flows, and accompanying notes.

        " Ecolab Intellectual Property License Agreements " means Contracts granting or obtaining any right to use or practice any rights under any Intellectual Property to which Ecolab or any Ecolab Subsidiary is a party or otherwise bound.

        " Ecolab Leased Real Property " means all real property interests of Ecolab or any of the Ecolab Subsidiaries acquired pursuant to any Lease.

        " Ecolab Material Adverse Effect " means a Material Adverse Effect with respect to Ecolab.

        " Ecolab Owned Intellectual Property " means all U.S. and foreign Patents (including those granted to or applied for or owned by Ecolab or any Ecolab Subsidiary), registered Trademarks (including Internet domain name registrations) and material unregistered Trademarks, registered Copyrights and material unregistered Copyrights, and material Software which are owned by Ecolab or the Ecolab Subsidiaries.

        " Ecolab Owned Real Property " means real property, together with all improvements and fixtures located thereon or attached or appurtenant thereto, owned by Ecolab or any Ecolab Subsidiary, including all easements, licenses, rights and appurtenances relating to the foregoing.

        " Ecolab Preferred Stock " means the Preferred Common Stock, without par value, of Ecolab.

        " Ecolab Rights " means the rights distributed to the holders of Ecolab Common Stock pursuant to the Ecolab Rights Agreement.

        " Ecolab Rights Agreement " means the Rights Agreement dated as of February 24, 2006, as amended, between Ecolab and Computershare Investor Services, LLC, as rights agent.

        " Ecolab Stock-Based Award " means any Equity Right consisting of, based on or relating to shares of Ecolab Common Stock granted under an Ecolab Stock Plan, other than Ecolab Stock Options.

        " Ecolab Stock Option " means any Equity Right that is an option to purchase Ecolab Common Stock granted under any Ecolab Stock Plan.

        " Ecolab U.S. Benefit Plan " means any Ecolab Benefit Plan that is not a Foreign Ecolab Benefit Plan.

        " Environmental Law " means any Law relating to the environment, natural resources, pollutants, contaminants or, to the extent relating to exposure to hazardous or toxic substances, public health and safety, including any Law pertaining to (a) treatment, storage, disposal, generation and transportation

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of toxic or hazardous substances or solid or hazardous waste, (b) air, water and noise pollution, (c) groundwater or soil contamination, (d) the release or threatened release into the environment of toxic or hazardous substances or solid or hazardous waste, including emissions, discharges, injections, spills, escapes or dumping into the environment of pollutants, contaminants or chemicals, (e) manufacture, processing, use, distribution, treatment, storage, disposal, transportation or handling of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances or oil or petroleum products or solid or hazardous waste, (f) underground and other storage tanks or vessels, abandoned, disposed or discarded barrels, containers and other closed receptacles, (g) public health and safety or (h) the protection of wild life, marine sanctuaries and wetlands, including all endangered and threatened species.

        " Environmental Permit " means any permit, license, authorization or consent required pursuant to applicable Environmental Laws.

        " Equity Right " means, with respect to any Person, any security or obligation convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, or any options, calls, restricted stock, deferred stock awards, stock units, "phantom" awards, dividend equivalents, or commitments relating to, or any stock appreciation right or other instrument the value of which is determined in whole or in part by reference to the market price or value of, shares of capital stock or earnings of such Person.

        " ERISA " means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

        " ERISA Affiliate " means, with respect to any entity, any trade or business, whether or not incorporated, that together with such entity and its Subsidiaries would be deemed a "single employer" within the meaning of Section 4001 of ERISA.

        " Exchange Act " means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

        " Exchange Ratio " means 0.7005.

        " Expenses " means all out-of-pocket expenses (including all fees and expenses of legal counsel, accountants, investment bankers, experts and consultants to a Party or its Affiliates) incurred by or on behalf of a Party in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement and the transactions contemplated by this Agreement, including the preparation, printing, filing and mailing of the Joint Proxy Statement/Prospectus and the Form S-4, and any amendments or supplements thereto, the solicitation of the Nalco Stockholder Approval and the Ecolab Stockholder Approval and all other matters related to the transactions contemplated by this Agreement.

        " FCPA " means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations promulgated thereunder.

        " Governmental Authority " means any (a) nation, region, state, county, city, town, village, district or other jurisdiction, (b) federal, state, local, municipal, foreign or other government, (c) department, agency or instrumentality of a foreign or other government, including any state-owned or state controlled instrumentality of a foreign or other government, (d) governmental or quasi-governmental entity of any nature (including any governmental agency, branch, department or other entity and any court or other tribunal), (e) international or multinational organization formed by states, governments or other international organizations, (f) organization that is designated by executive order pursuant to Section 1 of the United States International Organizations Immunities Act (22 U.S.C. 288 of 1945), as amended, and the rules and regulations promulgated or (g) other body exercising, or entitled to

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exercise, any administrative, executive, judicial, legislative, police or regulatory authority or taxing authority or power of any nature.

        " Hazardous Substance " means any substance, material, contaminant, pollutant or waste that is regulated under any Environmental Law, including any admixture or solution thereof, and including petroleum and all derivatives thereof , asbestos or asbestos-containing materials in any form or condition and polychlorinated biphenyls.

        " HSR Act " means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

        " Indebtedness " means, with respect to any Person, without duplication (a) all obligations of such Person and its Subsidiaries for borrowed money, or with respect to deposits or advances of any kind, (b) all obligations of such Person and its Subsidiaries evidenced by bonds, debentures, notes, mortgages or similar instruments or securities, (c) all obligations of such Person upon which interest charges are customarily paid (other than trade payables incurred in the ordinary course of business consistent with past practices), (d) all obligations of such Person and its Subsidiaries under conditional sale or other title retention Contracts relating to any property purchased by such Person or any of its Subsidiaries, (e) all obligations of such Person and its Subsidiaries issued or assumed as the deferred purchase price of property or services (excluding obligations of such Person and its Subsidiaries to creditors for inventory, services and supplies incurred in the ordinary course of business consistent with past practices), (f) all lease obligations of such Person and its Subsidiaries capitalized on the books and records of such Person or any of its Subsidiaries, (g) all obligations of others secured by a Lien on property or assets owned or acquired by such Person or any of its Subsidiaries, whether or not the obligations secured thereby have been assumed, (h) all letters of credit or performance bonds issued for the account of such Person or any of its Subsidiaries (excluding (i) letters of credit issued for the benefit of suppliers to support accounts payable to suppliers incurred in the ordinary course of business consistent with past practices, (ii) standby letters of credit relating to workers' compensation insurance and surety bonds, (iii) surety bonds and customs bonds and (iv) clearing house guarantees) and (i) all guarantees and Contracts having the economic effect of a guarantee of such Person or any of its Subsidiaries of any Indebtedness of any other Person, other than clearing house guarantees. Notwithstanding the foregoing, " Indebtedness " will not include intercompany indebtedness, obligations or liabilities between either (a) Nalco or one of the wholly-owned Nalco Subsidiaries, on the one hand, and another wholly-owned Nalco Subsidiary, on the other hand, or (b) Ecolab or one of the wholly-owned Ecolab Subsidiaries, on the one hand, and another wholly-owned Ecolab Subsidiary, on the other hand.

        " Intellectual Property " means all of the following anywhere in the world and all legal rights, title or interest in, under or in respect of the following arising under Law, whether or not filed, perfected, registered or recorded and whether now or later existing, filed, issued or acquired, including all renewals (a) all patents and applications for patents (including all invention disclosures) and all related reissues, reexaminations, divisions, renewals, extensions, provisionals, continuations and continuations in part (collectively, " Patents "), (b) all copyrights, copyright registrations and copyright applications, copyrightable works and all other corresponding rights (collectively, " Copyrights "), (c) all trade dress and trade names, logos, Internet addresses and domain names, trademarks and service marks and related registrations and applications, including any intent to use applications, supplemental registrations and any renewals or extensions, all other indicia of commercial source or origin and all goodwill associated with any of the foregoing (collectively, " Trademarks "), (d) all computer software (including source and object code), firmware, development tools, proprietary languages, algorithms, files, records, technical drawings and related documentation, data and manuals (collectively, " Software "), (e) all mask works, mask work registrations and mask work applications and all other corresponding rights, (f) all inventions (whether patentable or unpatentable and whether or not reduced to practice), know how, technology, technical data, (g) trade secrets, confidential business

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information, manufacturing and production processes and techniques, research and development information, financial, marketing and business data, pricing and cost information, business and marketing plans, advertising and promotional materials, customer, distributor, reseller and supplier lists and information, correspondence, records, and other documentation, and other proprietary information of every kind (collectively, " Trade Secrets "), (h) all databases and data collections, (i) all other proprietary rights (including moral rights) and (j) all copies and tangible embodiments of any of the foregoing (in whatever form or medium).

        " IRS " means the U.S. Internal Revenue Service.

        " Known " or " knowledge " means, with respect to any Party, the actual knowledge, after reasonable inquiry, of such Party's executive officers.

        " Law " means any federal, state, local, municipal, foreign, international, multinational or other rule, regulation, statute, Order, ordinance, constitution, treaty, directive or code promulgated by any Governmental Authority, including any binding case law.

        " Lease " means any lease, sublease, license, occupancy agreement or similar Contract relating to real property.

        " Liens " means any mortgage, claim, pledge, hypothecation, assignment, deposit agreement, encumbrance, lien (statutory or other), servitude, easement, right of way, community or other material property interest, option, preference, priority, right of first offer or refusal or other charge or security interest of any kind or nature whatsoever (including any conditional sale or other title retention Contract).

        " Litigation " means an action, suit, claim or litigation.

        " Material Adverse Effect " means with respect to any Person, a Change that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the business, financial condition or results of operations of such Person and its Subsidiaries, taken as a whole, or that would reasonably be expected to prevent or materially impair or materially delay the ability of such Person to consummate the Merger; provided that none of the following will be deemed, either alone or in combination, to constitute, and none of the following will be taken into account in determining whether there has been, a Material Adverse Effect: (i) any Change generally affecting economic, regulatory or political conditions, (ii) any Change generally affecting the financial, credit, securities or other capital markets in the United States or any foreign jurisdiction, (iii) any Change generally affecting the industries in which such Person and its Subsidiaries operate, (iv) any acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of war, sabotage or terrorism, (v) any change in applicable Law or GAAP (or authoritative interpretation thereof), (vi) the execution, delivery, announcement or pendency of this Agreement, any Party's compliance with the terms of this Agreement or the anticipated consummation of the Merger, including the impact thereof on the relationships, contractual or otherwise, of such Person or any of its Subsidiaries with employees, labor unions, customers, suppliers or business partners, (vii) any change in the market price, credit rating or trading volume of the securities of such Person (other than as a result of a Change otherwise constituting a Material Adverse Effect as provided herein), (viii) any failure by such Person to meet any internal or published projections, forecasts, estimates or projections in respect of revenues, cash flow, earnings or other financial or operating metrics for any period (other than as a result of a Change otherwise constituting a Material Adverse Effect as provided herein) or (ix) any hurricane, tornado, flood, earthquake, tsunami, volcano eruption or other natural disaster, except, with respect to clauses (i), (ii), (iii), (iv), (v) and (ix) above, to the extent that any such Change has a materially greater adverse effect or impact on such Person and its Subsidiaries, taken as a whole, as compared to other companies operating in the same industries and markets in which such Person and its Subsidiaries operate.

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        " Multiemployer Plan " means any plan or Contract that is a multiemployer plan within the meaning of Sections 3(37), 3(40) or 4001(a)(3) of ERISA.

        " Nalco Acquisition Proposal " means any proposal or offer from any Person or group for a direct or indirect (a) merger, binding share exchange, recapitalization, reorganization, liquidation, dissolution, business combination or consolidation, or any similar transaction, involving Nalco, pursuant to which such Person or group (or the shareholders of any Person) would acquire, directly or indirectly, 15 percent or more of the aggregate voting power of Nalco or of the surviving entity in a merger involving Nalco or the resulting direct or indirect parent of Nalco or such surviving entity, (b) sale, lease, license, exchange, mortgage, pledge, transfer or other acquisition or assumption of 15 percent or more of the consolidated net revenues, net income or assets (based on the fair market value thereof) of Nalco and the Nalco Subsidiaries, taken as a whole, in one or a series of related transactions, or (c) purchase, tender offer, exchange offer or other acquisition (including by way of merger, consolidation, share exchange or otherwise) that if consummated would result in the Beneficial Ownership by any Person or group of Securities representing 15 percent or more of the then-outstanding Nalco Common Stock (or of the shares of the surviving entity in a merger or of the direct or indirect parent of the surviving entity in a merger, in each case involving Nalco); provided that the term " Nalco Acquisition Proposal " will not include the Merger or the other transactions contemplated by this Agreement.

        " Nalco Benefit Plan " means any employment, bonus, deferred compensation, incentive compensation, stock purchase, stock option, thirteenth month, termination indemnity, redundancy, change in control, performance, retention, severance or termination pay, holiday pay, sick pay, workers' compensation, vacation pay, fringe benefit, educational assistance, housing assistance, relocation or expatriate, moving expense reimbursement, hospitalization or other medical, life, disability, welfare benefit or other insurance, supplemental unemployment benefits, profit-sharing, pension, superannuation or retirement plan, program or Contract, and each other employee benefit plan, program, or Contract (including employment Contracts), whether written or oral, currently maintained or contributed to or required to be contributed to by Nalco, any Nalco Subsidiary or any ERISA Affiliate, for the benefit of any current or former director, officer or employee of Nalco or any Nalco Subsidiary, other than (i) any Multiemployer Plan or (ii) any such plan, program or Contract that is required by applicable Law.

        " Nalco Common Stock " means the Common Stock, par value $0.01 per share, of Nalco.

        " Nalco Financial Statements " means the consolidated financial statements of Nalco and the Nalco Subsidiaries included in the Nalco SEC Documents together, in the case of year-end statements, with reports thereon by Ernst & Young LLP or PricewaterhouseCoopers LLP, as the case may be, the independent auditors of Nalco for the periods included therein, including in each case a consolidated balance sheet, a consolidated statement of income, a consolidated statement of stockholders' equity and a consolidated statement of cash flows, and accompanying notes.

        " Nalco Intellectual Property License Agreements " means Contracts granting or obtaining any right to use or practice any rights under any Intellectual Property to which Nalco or any Nalco Subsidiary is a party or otherwise bound.

        " Nalco Leased Real Property " means all real property interests of Nalco or any of the Nalco Subsidiaries acquired pursuant to any Lease.

        " Nalco Material Adverse Effect " means a Material Adverse Effect with respect to Nalco.

        " Nalco Owned Intellectual Property " means all U.S. and foreign Patents (including those granted to or applied for or owned by Nalco or any Nalco Subsidiary), registered Trademarks (including Internet domain name registrations) and material unregistered Trademarks, registered Copyrights and material unregistered Copyrights, and material Software which are owned by Nalco or the Nalco Subsidiaries.

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        " Nalco Owned Real Property " means real property, together with all improvements and fixtures located thereon or attached or appurtenant thereto, owned by Nalco or any Nalco Subsidiary, including all easements, licenses, rights and appurtenances relating to the foregoing.

        " Nalco Preferred Stock " means the Preferred Stock, par value $0.01 per share, of Nalco.

        " Nalco RSU " means any Nalco Stock-Based Award that is (a) a restricted stock unit payable in shares of Nalco Common Stock or whose value is determined with reference to the value of shares of Nalco Common Stock and (b) held by a non-employee member of the Board of Directors of Nalco.

        " Nalco U.S. Benefit Plan " means any Nalco Benefit Plan that is not a Foreign Nalco Benefit Plan.

        " NYSE " means the New York Stock Exchange, Inc.

        " Order " means any charge, order, writ, injunction, judgment, decree, ruling, determination, directive, award or settlement, whether civil, criminal or administrative and whether formal or informal.

        " Permitted Liens " means (a) any Lien for Taxes not yet delinquent or which are being contested in good faith by appropriate proceedings and, in each case, for which adequate reserves have been established in the Ecolab Financial Statements or Nalco Financial Statements, as applicable, (b) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other similar Liens incurred in the ordinary course of business consistent with past practices, (c) pledges or deposits in connection with workers' compensation, unemployment insurance and other social security legislation and (d) easements, rights-of-way, restrictions and other similar encumbrances, which, in the aggregate, are not substantial in amount and which do not in any case materially interfere with the use or materially detract from the value of the property subject thereto.

        " Person " means an individual, corporation, limited liability company, general or limited partnership, association, trust, unincorporated organization, Governmental Authority, other entity or group (as defined in the Exchange Act).

        " Proceeding " means an action, suit, claim, litigation, proceeding, arbitration, investigation, audit, charge, complaint, review or controversy, whether judicial or administrative.

        " Release " means any releasing, disposing, discharging, injecting, spilling, leaking, leaching, pumping, dumping, emitting, escaping, emptying, seeping, dispersal and migration, including the moving of any materials through, into or upon, any land, soil, surface water, groundwater or air, or otherwise entering into the environment.

        " Sarbanes-Oxley Act " means the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder.

         "Section 16 Officer" means any individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to Nalco, other than by reason of being a non-employee member of the Board of Directors of Nalco.

        " Securities " means, with respect to any Person, any class or series of common stock, preferred stock, membership interest and any other equity securities or capital stock of such Person, however described and whether voting or non-voting.

        " Securities Act " means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

        " Stock Award Exchange Ratio " means (a) the closing price of shares of Nalco Common Stock on the NYSE (as reported by Bloomberg L.P. or, if not reported therein, in another authoritative source mutually selected by Ecolab and Nalco) for the last trading day prior to the Closing, divided by (b) the closing price of shares of Ecolab Common Stock on the NYSE (as reported by Bloomberg L.P. or, if not reported therein, in another authoritative source mutually selected by Ecolab and Nalco) for the last trading day prior to the Closing.

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        " Subsidiary " means, when used with respect to any Person, any other Person, whether incorporated or unincorporated, of which (a) more than 50 percent of the Securities or (b) Securities having by their terms ordinary voting power to elect more than 50 percent of the members of the Board of Directors or others performing similar functions with respect to such corporation or other organization, is directly owned or controlled by such Person or by any one or more of its Subsidiaries.

        " Superior Ecolab Proposal " means any bona fide binding written Ecolab Acquisition Proposal made by any Person (other than Nalco) that has not been withdrawn and did not result from a breach of the provisions of Section 7.6 and that, if consummated, would result in such Person (or in the case of a direct merger between such Person and Ecolab, the stockholders of such Person) acquiring, directly or indirectly, more than 50% of Ecolab Common Stock (or of the shares of the surviving entity in a merger or of the direct or indirect parent of the surviving entity in a merger) or all or substantially all of the assets (which for this purpose may include shares of any Ecolab Subsidiary) of Ecolab and the Ecolab Subsidiaries, taken as a whole, and that the Board of Directors of Ecolab determines in good faith, after consultation with its outside legal counsel and a financial advisor of nationally recognized reputation, is (a) more favorable from a financial point of view to the stockholders of Ecolab than the transactions contemplated by this Agreement, taking into account any proposals by Nalco to amend the terms of this Agreement, and (b) reasonably capable of being completed, taking into account all legal, financial, regulatory and other aspects of such Ecolab Acquisition Proposal, including the identity of the Person making such Ecolab Acquisition Proposal.

        " Superior Nalco Proposal " means any bona fide binding written Nalco Acquisition Proposal made by any Person (other than Ecolab or Merger Sub) that has not been withdrawn and did not result from a breach of the provisions of Section 7.5 and that, if consummated, would result in such Person (or in the case of a direct merger between such Person and Nalco, the stockholders of such Person) acquiring, directly or indirectly, more than 50% of Nalco Common Stock (or of the shares of the surviving entity in a merger or of the direct or indirect parent of the surviving entity in a merger) or all or substantially all of the assets (which for this purpose may include shares of any Nalco Subsidiary) of Nalco and the Nalco Subsidiaries, taken as a whole, and that the Board of Directors of Nalco determines in good faith, after consultation with its outside legal counsel and a financial advisor of nationally recognized reputation, is (a) more favorable from a financial point of view to the stockholders of Nalco than the transactions contemplated by this Agreement, taking into account any proposals by Ecolab to amend the terms of this Agreement, and (b) reasonably capable of being completed, taking into account all legal, financial, regulatory and other aspects of such Nalco Acquisition Proposal, including the identity of the Person making such Nalco Acquisition Proposal.

        " Tax " means (a) any federal, state, local, foreign or other tax, charge, fee, duty (including customs duty), levy or assessment, including any income, gross receipts, net proceeds, alternative or add-on minimum, corporation, ad valorem, turnover, real property, personal property (tangible or intangible), sales, use, franchise, excise, value added, goods and services, consumption, stamp, leasing, lease, user, transfer, fuel, excess profits, profits, occupational, premium, interest equalization, windfall profits, severance, license, registration, payroll, environmental, capital stock, capital duty, disability, estimated, gains, wealth, welfare, employee's income withholding, other withholding, unemployment or social security or other tax of whatever kind (including any fee, assessment or other charges in the nature of or in lieu of any tax) that is imposed by any Governmental Authority, (b) any interest, fines, penalties or additions resulting from, attributable to, or incurred in connection with any items described in this paragraph or any related contest or dispute, (c) any liability for payment of any items described in this paragraph that are attributable to another Person as a result of any tax sharing, tax indemnity or tax allocation Contract or any other express or implied Contract to indemnify any other Person or by Law, by Contract or otherwise, whether or not disputed and (d) any liability for payment of amounts listed in (a), (b) or (c) when as a result of transferee liability, of being a member of an affiliated,

9


consolidated, combined, or unitary group for any period, transferor liability, successor liability, or otherwise through operation of Law.

        " Tax Return " means any report, return, filing, declaration, claim for refund, or information return or statement in connection with the determination, assessment, collection or imposition of any Taxes or otherwise related to Taxes, including any schedule or attachment, and including any amendment thereof.

        " Taxing Authority " means, with respect to any Tax, the Governmental Authority that imposes such Tax or is otherwise responsible for Tax Returns and the agency, if any, charged with the collection of such Tax for such Governmental Authority.

        " U.S. " means the United States of America.

        " VWAP " per share of Ecolab Common Stock on any trading day means the per share volume-weighted average price as displayed under the heading Bloomberg VWAP on Bloomberg (or, if Bloomberg ceases to publish such price, any successor service reasonably chosen by Ecolab) page ECL_execution_VWAP (or the equivalent successor if such page is not available), in respect of the period from the open of trading on the relevant trading day until the close of trading on such trading day (or if such volume-weighted average price is unavailable, the market price of one share of Ecolab Common Stock on such trading day determined, using a volume-weighted average method, by a nationally recognized investment banking firm (unaffiliated with Ecolab or Nalco) retained for this purpose by Ecolab).

         Section 1.2    Additional Defined Terms.     For purposes of this Agreement, the following terms have the meanings specified in the indicated Section of this Agreement.

Defined Term
  Section
Agreement   Preamble
Available Nalco Stock Plan Shares   Section 2.10(e)
Cash Consideration   Section 2.7(a)(i)
Cash Election Shares   Section 2.7(a)(i)
Certificate   Section 2.7(f)
Certificate of Merger   Section 2.3
Closing   Section 2.2
Closing Date   Section 2.2
Confidentiality Agreement   Section 7.3(d)
Continuing Employee   Section 7.7(b)
Converted Stock-Based Award   Section 2.10(b)
Converted Stock Option   Section 2.10(a)
D & O Insurance   Section 7.9(a)
DGCL   Recitals
Dissenting Shares   Section 2.7(c)
GAAP   Section 4.7(b)
Ecolab   Preamble
Ecolab Change in Recommendation   Section 7.2(b)
Ecolab Contracts   Section 5.17(b)
Ecolab Disclosure Letter   Article V
Ecolab Financial Advisor   Section 5.22
Ecolab Permits   Section 5.11(a)
Ecolab Recommendation   Section 7.2(b)
Ecolab's Counsel   Section 7.19
Ecolab SEC Documents   Section 5.6(a)

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Defined Term
  Section
Ecolab Share Issuance   Section 5.4(b)
Ecolab Stockholder Approval   Section 5.4(d)
Ecolab Stockholders Meeting   Section 7.2(b)
Ecolab Stock Plans   Section 5.3(b)
Ecolab Subsidiaries   Section 5.2(a)
Ecolab Subsidiary   Section 5.2(a)
Ecolab Termination Fee   Section 9.3(b)
Effective Time   Section 2.3
Elected Cash Consideration   Section 2.8(a)
Election Deadline   Section 2.9(b)
Election Form   Section 2.9(a)
Election Form Record Date   Section 2.9(a)
Election Period   Section 2.9(b)
End Date   Section 9.1(b)(i)
Exchange Agent   Section 3.1(a)
Exchange Fund   Section 3.1(b)
Excluded Shares   Section 2.7(b)
Foreign Ecolab Benefit Plan   Section 5.14(g)
Foreign Nalco Benefit Plan   Section 4.15(g)
Form S-4   Section 4.9
FTC   Section 7.4(b)
Indemnified Persons   Section 7.9(a)
Joint Proxy Statement/Prospectus   Section 7.1(a)
Mailing Date   Section 2.9(a)
Maximum Annual Premium   Section 7.9(a)
Merger   Recitals
Merger Consideration   Section 2.7(a)
Merger Sub   Preamble
Nalco   Preamble
Nalco Change in Recommendation   Section 7.2(a)
Nalco Contracts   Section 4.18(b)
Nalco Disclosure Letter   Article IV
Nalco Financial Advisor   Section 4.22
Nalco Permits   Section 4.12(a)
Nalco Recommendation   Section 7.2(a)
Nalco's Counsel   Section 7.19
Nalco SEC Documents   Section 4.7(a)
Nalco Stock-Based Award   Section 2.10(b)
Nalco Stockholder Approval   Section 4.4(c)
Nalco Stockholders Meeting   Section 7.2(a)
Nalco Stock Option   Section 2.10(a)
Nalco Stock Plan   Section 2.10(a)
Nalco Subsidiaries   Section 4.2(a)
Nalco Subsidiary   Section 4.2(a)
Nalco Termination Fee   Section 9.3(a)
No Election Share   Section 2.7(a)(iii)
No Election Value   Section 2.8(b)(ii)
Parties   Preamble
Party   Preamble

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Defined Term
  Section
Representatives   Section 7.3(a)
Restraints   Section 8.1(d)
SEC   Article IV
Shortfall Number   Section 2.8(b)
Specified Nalco Contract   Section 6.1(q)
Stock Consideration   Section 2.7(a)(ii)
Stock Election Shares   Section 2.7(a)(iii)
Surviving Corporation   Section 2.1
Surviving Corporation Plans   Section 7.7(b)

         Section 1.3    Interpretation.     The language in this Agreement is to be construed in all cases according to its fair meaning. Ecolab and Nalco acknowledge and agree that each Party and its counsel have reviewed and revised this Agreement and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting Party or the Party in favor of which a clause has been drafted or in favor of the Party who has committed itself in a clause, is not to be employed in the interpretation of this Agreement. Whenever used herein, the words "include," "includes" and "including" mean "include, without limitation," "includes, without limitation" and "including, without limitation," respectively. The masculine, feminine or neuter gender and the singular or plural number are each deemed to include the other whenever the context so indicates. The use of "or" is not intended to be exclusive unless expressly indicated otherwise. The word "days" means calendar days unless otherwise specified. Time periods within or following which any payment is to be made or act is to be done will, unless expressly indicated otherwise, be calculated by excluding the day on which the period commences and including the day on which the period ends and by extending the period to the next Business Day following if the last day of the period is not a Business Day. The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement refer to this Agreement as a whole (including any Exhibits, Schedules and the Parties' disclosure letters) and not to any particular provision of this Agreement, and all Article, Section, Exhibit and Schedule references are to this Agreement unless otherwise specified. Where this Agreement states that a Party "will" or "must" perform in some manner or otherwise act or omit to act, it means that the Party is legally obligated to do so in accordance with this Agreement. Any reference to a statute, rule or regulation is deemed also to refer to any amendments or successor legislation as in effect at the relevant time. Any reference to a Contract or other document as of a given date means the Contract or other document as amended, supplemented and modified from time to time through such date. When a sentence includes the words "would reasonably be expected to have" or "would not reasonably be expected to have" in reference to the occurrence or non-occurrence of a "Material Adverse Effect," the words "would reasonably be expected to have" will be read out of the definition of "Material Adverse Effect" for purposes of such sentence to avoid duplication.

ARTICLE II
THE MERGER AND CERTAIN RELATED MATTERS

         Section 2.1    The Merger.     Upon the terms and subject to the conditions set forth in this Agreement and in accordance with the DGCL, at the Effective Time, Nalco will be merged with and into Merger Sub and the separate existence of Nalco will cease. Merger Sub will continue as the surviving corporation in the Merger (as such, the " Surviving Corporation ") as a wholly-owned Subsidiary of Ecolab and will continue to be governed by the laws of the State of Delaware. At the Effective Time, the effects of the Merger will be as provided in this Agreement, the Certificate of Merger and the applicable provisions of the DGCL. Without limiting the generality of the foregoing, at the Effective Time, all of the property, rights, privileges, powers and franchises of Nalco and Merger Sub

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will vest in the Surviving Corporation, and all debts, liabilities and duties of Nalco and Merger Sub will become the debts, liabilities and duties of the Surviving Corporation.

         Section 2.2    Closing.     The closing of the Merger (the " Closing ") will take place at the offices of Baker & McKenzie, LLP, 130 East Randolph Drive, Chicago, Illinois 60601, at 9:00 a.m., Chicago time, on the date when the Effective Time is to occur (the " Closing Date ").

         Section 2.3    Effective Time.     Subject to the provisions of this Agreement, on the Closing Date, Ecolab and Nalco will file a certificate of merger as contemplated by the DGCL (the " Certificate of Merger ") with the Secretary of State of the State of Delaware, in such form as required by, and executed in accordance with, the DGCL. The Merger will become effective at such time as the Certificate of Merger is duly filed with such Secretary of State on the Closing Date, or at such other time as Ecolab and Nalco may agree and specify in the Certificate of Merger. Subject to the provisions of this Agreement, unless otherwise agreed by Ecolab and Nalco, Ecolab and Nalco will cause the Effective Time to occur not later than the second Business Day after all of the conditions set forth in Article VIII have been fulfilled or waived (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of those conditions). As used in this Agreement, the " Effective Time " means the time at which the Merger becomes effective.

         Section 2.4    Surviving Corporation Constituent Documents.     The certificate of incorporation and bylaws of Merger Sub, as in effect immediately prior to the Effective Time, will be the certificate of incorporation and bylaws of the Surviving Corporation, until thereafter changed or amended as provided therein or by applicable Law.

         Section 2.5    Surviving Corporation Directors and Officers .    

         Section 2.6    Ecolab Board of Directors.     At the Effective Time, the number of directors comprising the whole Board of Directors of Ecolab will be increased by three and three directors of Nalco as of immediately prior to the Effective Time will be appointed to serve as directors of Ecolab. The new Ecolab directors will be selected by Nalco (with one director assigned to each of the three director classes) prior to the Effective Time, subject to acceptance by Ecolab in accordance with its regular corporate governance procedures. Such directors will hold office from the Effective Time until their respective successors are duly elected and qualified or until their earlier death, resignation or removal in accordance with the certificate of incorporation and bylaws of Ecolab or as otherwise as provided by applicable Law.

         Section 2.7    Effect on Capital Stock.     At the Effective Time, by virtue of the Merger and without any action on the part of Ecolab, Merger Sub, Nalco or the holders of any of the following securities:

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         Section 2.8    Proration.     Notwithstanding any provision of this Agreement to the contrary:

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         Section 2.9    Elections .    

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         Section 2.10    Treatment of Nalco Equity-Based Awards .    

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ARTICLE III
EXCHANGE OF SHARES

         Section 3.1    Surrender and Payment .    

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         Section 3.2    Lost, Stolen or Destroyed Certificates.     If any Certificate has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by Ecolab, the posting by such Person of a bond, in such reasonable and customary amount as Ecolab may direct, as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue, in exchange for such lost, stolen or destroyed Certificate, the Merger Consideration to be paid in respect of the shares of Nalco Common Stock represented by such Certificate as contemplated by Article II and this Article III .

         Section 3.3    Withholding Rights.     Ecolab, the Surviving Corporation and the Exchange Agent will be entitled to deduct and withhold from the consideration otherwise payable to a holder of shares of Nalco Common Stock pursuant to the Merger such amounts as Ecolab, the Surviving Corporation or the Exchange Agent is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or foreign Tax Law. To the extent that amounts are so

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deducted or withheld and paid over to the applicable Governmental Authority or Taxing Authority, such deducted or withheld amounts will be treated for all purposes of this Agreement as having been paid to the holder of shares of Nalco Common Stock in respect of which such deduction and withholding was made.

         Section 3.4    Further Assurances.     After the Effective Time, the directors and officers of the Surviving Corporation will be authorized to execute and deliver, in the name and on behalf of Nalco, any deeds, bills of sale, assignments or assurances and to take and do, in the name and on behalf of Nalco, any other actions and things to vest, perfect or confirm of record or otherwise in the Surviving Corporation any and all right, title and interest in, to and under any of the rights, properties or assets acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NALCO

        Except as otherwise disclosed or identified in the Nalco SEC Documents filed and publicly available on the internet website of the Securities and Exchange Commission (the " SEC ") at least two Business Days prior to the date of this Agreement (excluding any risk factor disclosure and disclosure of risks included in any "forward-looking statements" disclaimer or other statements included in such Nalco SEC Documents that are predictive or forward-looking in nature) or in the letter (the " Nalco Disclosure Letter ") delivered to Ecolab by Nalco prior to the execution of this Agreement (it being understood that any information contained therein will qualify and apply to the representations and warranties in this Article IV to which the information is specifically stated as referring to and will qualify and apply to other representations and warranties in this Article IV to the extent, and only to the extent, that it is reasonably apparent from the face of such disclosure that such disclosure also qualifies or is applicable to such other sections), Nalco represents and warrants to Ecolab and Merger Sub as follows:

         Section 4.1    Organization.     Nalco is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware. Nalco has all requisite corporate power and authority to own, lease and operate its properties and assets and to carry on its business as now being conducted, except where failure to have such power or authority, individually or on the aggregate, has not had and would not reasonably be expected to have a Nalco Material Adverse Effect. Nalco has delivered to Ecolab correct and complete copies of its Constituent Documents, as amended and in effect on the date of this Agreement.

         Section 4.2    Subsidiaries .    

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        Section 4.3     Capitalization .    

         Section 4.4    Authorization; Board Approval; Voting Requirements .    

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         Section 4.5    Takeover Statute; No Restrictions on the Merger .    

         Section 4.6    Consents and Approvals; No Violations .    

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        Section 4.7     SEC Reports; Nalco Financial Statements .    

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         Section 4.8    Absence of Undisclosed Liabilities.     Nalco and the Nalco Subsidiaries do not have any liabilities or obligations, whether or not accrued, known or unknown, contingent or otherwise and whether or not required to be disclosed or reflected on or reserved against in the consolidated balance sheet of Nalco and the Nalco Subsidiaries, except for liabilities or obligations that, individually or in the aggregate, have not had or would not reasonably be expected to have a Nalco Material Adverse Effect.

         Section 4.9    Form S-4; Joint Proxy Statement/Prospectus.     None of the information supplied or to be supplied by Nalco or any Nalco Subsidiary for inclusion or incorporation by reference in (a) the registration statement on Form S-4 (the " Form S-4 ") to be filed by Ecolab with the SEC in connection with the Ecolab Share Issuance will, at the time the Form S-4 is filed with the SEC or at any time it is supplemented or amended or at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading or (b) the Joint Proxy Statement/Prospectus will not, on the date mailed to the stockholders of Nalco and Ecolab and at the time of the Nalco Stockholders Meeting and the time of the Ecolab Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.

         Section 4.10    Absence of Certain Changes.     Since January 1, 2011, Nalco and the Nalco Subsidiaries have conducted their respective businesses in all material respects in the ordinary course of business and in a manner consistent with past practice. Since January 1, 2011, there have not been any Changes that, individually or in the aggregate, have had or would reasonably be expected to have a Nalco Material Adverse Effect.

         Section 4.11    Litigation.     There is no Proceeding (whether at Law or in equity) pending, affecting or, to the knowledge of Nalco, threatened against Nalco or any Nalco Subsidiary or any of their respective directors, officers, properties or assets that, individually or in the aggregate, has had or would reasonably be expected to have a Nalco Material Adverse Effect. There is no Order outstanding against or, to the knowledge of Nalco, investigation by any Governmental Authority involving Nalco or any Nalco Subsidiary or any of their respective properties or assets that, individually or in the aggregate, has had or would reasonable be expected to have a Nalco Material Adverse Effect.

         Section 4.12    Compliance with Laws .    

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         Section 4.13    Taxes .    

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         Section 4.14    Real Property.     

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         Section 4.15    Employee Benefit Plans and Related Matters; ERISA.     

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         Section 4.16    Employees; Labor Matters.     

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         Section 4.17    Intellectual Property.     

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         Section 4.18    Contracts.     

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         Section 4.19    Environmental Laws and Regulations.     Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Nalco Material Adverse Effect:

         Section 4.20    Insurance Coverage.     Nalco and the Nalco Subsidiaries maintain policies of insurance in such amounts and against such risks as Nalco believes to be customary in the industry in which Nalco and the Nalco Subsidiaries operate. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Nalco Material Adverse Effect, all such insurance policies are in full force and neither Nalco nor any of the Nalco Subsidiaries is in breach or default under any such policy.

         Section 4.21    Foreign Corrupt Practices and International Trade Sanctions.     

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         Section 4.22    Opinion of Financial Advisor.     Nalco has received the written opinion of Goldman, Sachs & Co. (the " Nalco Financial Advisor "), dated as of July 19, 2011 that, as of such date and subject to the limitations and assumptions set forth therein, the Stock Consideration and the Cash Consideration to be paid to the holders of Nalco Common Stock, taken in the aggregate, pursuant to this Agreement is fair, from a financial point of view, to such holders.

         Section 4.23    Brokers.     No Person other than the Nalco Financial Advisor is entitled to any brokerage, financial advisory, finder's or similar fee or commission payable by any Party in connection with the transactions contemplated by this Agreement based upon Contracts made by or on behalf of Nalco or any Nalco Subsidiary. Nalco has delivered to Ecolab a correct and complete copy of each Contract between Nalco or any Nalco Subsidiary and the Nalco Financial Advisor relating to the Merger and the other transactions contemplated by this Agreement.

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         Section 4.24    Ownership of Ecolab Common Stock.     Neither Nalco nor any Nalco Subsidiary owns any shares of Ecolab Common Stock.

         Section 4.25    No Other Representations or Warranties.     Except for the representations and warranties contained in this Article IV , Ecolab acknowledges that none of Nalco, the Nalco Subsidiaries or any other Person on behalf of Nalco makes any other express or implied representation or warranty in connection with the transactions contemplated by this Agreement.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ECOLAB AND MERGER SUB

        Except as otherwise disclosed or identified in the Ecolab SEC Documents filed and publicly available on the internet website of the SEC at least two Business Days prior to the date of this Agreement (excluding any risk factor disclosure and disclosure of risks included in any "forward-looking statements" disclaimer or other statements included in such Ecolab SEC Documents that are predictive or forward-looking in nature) or in the letter (the " Ecolab Disclosure Letter ") delivered to Nalco by Ecolab prior to the execution of this Agreement (it being understood that any information contained therein will qualify and apply to the representations and warranties in this Article V to which the information is specifically stated as referring to and will qualify and apply to other representations and warranties in this Article V to the extent, and only to the extent, that it is reasonably apparent from the face of such disclosure that such disclosure also qualifies or is applicable to such other sections), Ecolab and Merger Sub jointly and severally represent and warrant to Nalco as follows:

         Section 5.1    Organization.     Ecolab is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware. Ecolab has all requisite corporate power and authority to own, lease and operate its properties and assets and to carry on its business as now being conducted, except where failure to have such power or authority, individually or on the aggregate, has not had and would not reasonably be expected to have an Ecolab Material Adverse Effect. Ecolab has delivered to Nalco correct and complete copies of its Constituent Documents, as amended and in effect on the date of this Agreement.

         Section 5.2    Subsidiaries.     

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         Section 5.3    Capitalization.     

         Section 5.4    Authorization; Board Approval; Voting Requirements.     

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         Section 5.5    Consents and Approvals; No Violations.     

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         Section 5.6    SEC Reports; Ecolab Financial Statements.     

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         Section 5.7    Absence of Undisclosed Liabilities.     Ecolab and the Ecolab Subsidiaries do not have any liabilities or obligations, whether or not accrued, known or unknown, contingent or otherwise and whether or not required to be disclosed or reflected on or reserved against in the consolidated balance sheet of Ecolab and the Ecolab Subsidiaries, except for liabilities or obligations that, individually or in the aggregate, have not had or would not reasonably be expected to have an Ecolab Material Adverse Effect.

         Section 5.8    Form S-4; Joint Proxy Statement/Prospectus.     None of the information supplied or to be supplied by Ecolab or any Ecolab Subsidiary for inclusion or incorporation by reference in (a) the Form S-4 to be filed by Ecolab with the SEC in connection with the Ecolab Share Issuance will, at the time the Form S-4 is filed with the SEC or at any time it is supplemented or amended or at the time it becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading or (b) the Joint Proxy Statement/Prospectus will not, on the date mailed to the stockholders of Nalco and Ecolab and at the time of the Nalco Stockholders Meeting and the time of the Ecolab Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.

         Section 5.9    Absence of Certain Changes.     Since January 1, 2011, Ecolab and the Ecolab Subsidiaries have conducted their respective businesses in all material respects in the ordinary course of business and in a manner consistent with past practice. Since January 1, 2011, there have not been any Changes that, individually or in the aggregate, have had or would reasonably be expected to have an Ecolab Material Adverse Effect.

         Section 5.10    Litigation.     There is no Proceeding (whether at Law or in equity) pending, affecting or, to the knowledge of Ecolab, threatened against Ecolab or any Ecolab Subsidiary or any of their respective directors, officers, properties or assets that, individually or in the aggregate, has had or would reasonably be expected to have an Ecolab Material Adverse Effect. There is no Order outstanding against or, to the knowledge of Ecolab, investigation by any Governmental Authority involving Ecolab or any Ecolab Subsidiary or any of their respective properties or assets that, individually or in the aggregate, has had or would reasonable be expected to have an Ecolab Material Adverse Effect.

         Section 5.11    Compliance with Laws.     

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         Section 5.12    Taxes.     

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         Section 5.13    Real Property.     

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         Section 5.14    Employee Benefit Plans and Related Matters; ERISA.     

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         Section 5.15    Employees; Labor Matters.     

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         Section 5.16    Intellectual Property.     

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         Section 5.17    Contracts.     

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         Section 5.18    Environmental Laws and Regulations.     Except as has not had and would not reasonably be expected to have, individually or in the aggregate, an Ecolab Material Adverse Effect:

         Section 5.19    Insurance Coverage.     Ecolab and the Ecolab Subsidiaries maintain policies of insurance in such amounts and against such risks as Ecolab believes to be customary in the industry in which Ecolab and the Ecolab Subsidiaries operate. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, an Ecolab Material Adverse Effect, all such insurance policies are in full force and neither Ecolab nor any of the Ecolab Subsidiaries is in breach or default under any such policy.

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         Section 5.20    Foreign Corrupt Practices and International Trade Sanctions.     

         Section 5.21    Financing.     Ecolab and Merger Sub will have available at the Closing sufficient funds to make the deposit into the Exchange Fund required pursuant to Section 3.1(b) .

         Section 5.22    Opinion of Financial Advisor.     Ecolab has received the written opinion of Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Ecolab Financial Advisor") dated as of July 19, 2011 to the effect that, as of the date of such opinion and subject to the qualifications and limitations set forth therein, the Merger Consideration is fair, from a financial point of view, to Ecolab.

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         Section 5.23    Brokers.     No Person other than the Ecolab Financial Advisor is entitled to any brokerage, financial advisory, finder's or similar fee or commission payable by any Party in connection with the transactions contemplated by this Agreement based upon Contracts made by or on behalf of Ecolab or any Ecolab Subsidiary. Ecolab has delivered to Nalco a correct and complete copy of each Contract between Ecolab or any Ecolab Subsidiary and the Ecolab Financial Advisor relating to the Merger and the other transactions contemplated by this Agreement.

         Section 5.24    Ownership of Nalco Common Stock.     None of Ecolab, Merger Sub or any Ecolab Subsidiary owns any shares of Nalco Common Stock.

         Section 5.25    No Restrictions on the Merger.     Assuming the accuracy of the representation in Section 4.24 , Ecolab has taken or caused to be taken all necessary action in order to make this Agreement and the transactions contemplated by this Agreement comply with, and this Agreement and the transactions contemplated by this Agreement do comply with, the requirements in the Constituent Documents of Ecolab and the Ecolab Subsidiaries concerning "business combination," "fair price," "voting requirement" or other related provisions.

         Section 5.26    No Other Representations or Warranties.     Except for the representations and warranties contained in this Article V , Nalco acknowledges that none of Ecolab, the Ecolab Subsidiaries or any other Person on behalf of Ecolab makes any other express or implied representation or warranty in connection with the transactions contemplated by this Agreement.

ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS

         Section 6.1    Covenants of Nalco.     From the date of this Agreement until the Effective Time, unless Ecolab otherwise consents in writing (which will not be unreasonably withheld or delayed) or except as set forth in Section 6.1 of the Nalco Disclosure Letter or as otherwise expressly provided for in this Agreement, Nalco will, and will cause each of the Nalco Subsidiaries to, conduct its business in a commercially reasonable manner consistent with industry and past practices, and will use its reasonable best efforts to preserve intact its business organization and goodwill and relationships with all Governmental Authorities, customers, suppliers, business associates, strategic and joint venture partners and others having business dealings with it, to keep available the services of its current officers and key employees and to maintain its current rights and franchises, in each case, consistent with industry and past practices. In addition to and without limiting the generality of the foregoing, except as expressly set forth in Section 6.1 of the Nalco Disclosure Letter or as otherwise expressly provided for in this Agreement or as required by applicable Law, from the date of this Agreement until the Effective Time, without the prior written consent of Ecolab (which will not be unreasonably withheld or delayed), Nalco will not, and will not permit any Nalco Subsidiary to:

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         Section 6.2    Covenants of Ecolab.     From the date of this Agreement until the Effective Time, unless Nalco otherwise consents in writing (which will not be unreasonably withheld or delayed) or except as set forth in Section 6.2 of the Ecolab Disclosure Letter or as otherwise expressly provided for in this Agreement, Ecolab will, and will cause each of the Ecolab Subsidiaries to, conduct its business in a commercially reasonable manner consistent with industry and past practices, and will use its reasonable best efforts to preserve intact its business organization and goodwill and relationships with all Governmental Authorities, customers, suppliers, business associates, strategic and joint venture partners and others having business dealings with it, to keep available the services of its current officers and key employees and to maintain its current rights and franchises, in each case, consistent with industry and past practices. In addition to and without limiting the generality of the foregoing, except as expressly set forth in Section 6.2 of the Ecolab Disclosure Letter or as otherwise expressly provided for in this Agreement or as required by applicable Law, from the date of this Agreement until the Effective Time, without the prior written consent of Nalco (which will not be unreasonably withheld or delayed), Ecolab will not, and will not permit any Ecolab Subsidiary to:

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ARTICLE VII
ADDITIONAL AGREEMENTS

         Section 7.1    Preparation and Mailing of Joint Proxy Statement/Prospectus.     

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         Section 7.2    Stockholders Meetings; Recommendations.     

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         Section 7.3    Access to Information; Confidentiality .    

         Section 7.4    Consents and Approvals .    

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         Section 7.5    No Solicitation by Nalco .    

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         Section 7.6    No Solicitation by Ecolab .    

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         Section 7.7    Employee Matters.     

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         Section 7.8    Fees and Expenses.     Subject to Section 9.3 , whether or not the Merger is consummated, all Expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement will be paid by the Party incurring such Expenses.

         Section 7.9    Directors' and Officers' Indemnification and Insurance .    

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         Section 7.10    Public Announcements.     Ecolab and Nalco will develop a joint communications plan and, unless a Party has received an Ecolab Acquisition Proposal or a Nalco Acquisition Proposal, each Party will (a) ensure that all press releases and other public statements or communications with respect to the transactions contemplated by this Agreement are consistent with such joint communications plan and (b) unless otherwise required by applicable Law or by obligations pursuant to the rules of the NYSE or any other applicable securities exchange, consult with each other before issuing any press release or, to the extent practicable, otherwise making any public statement or communication with respect to this Agreement or the transactions contemplated by this Agreement. In addition to the foregoing, except to the extent disclosed in or consistent with the Joint Proxy Statement/Prospectus in accordance with the provisions of Section 7.1 , neither Ecolab nor Nalco will issue any press release or otherwise make any public statement or disclosure concerning the other Party or the other Party's business, financial condition or results of operations without the consent of the other Party, which consent will not be unreasonably withheld or delayed.

         Section 7.11    Notice of Certain Events.     Each of Ecolab and Nalco will promptly notify the other after receiving or becoming aware of (a) any notice or other communication from any Person alleging that the consent of that Person is or may be required in connection with the transactions contemplated by this Agreement, (b) the occurrence, or non-occurrence, of any event which would be reasonably likely to cause any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect, (c) any Proceeding commenced or, to its knowledge, threatened against, relating to or otherwise involving Ecolab or any of the Ecolab Subsidiaries or Nalco or any of the Nalco Subsidiaries, as the case may be, that relates to the consummation of the transactions contemplated by this Agreement and (d) any failure of Ecolab or Nalco, as the case may be, to comply with or satisfy in all material respects any covenant, condition or agreement to be complied with or satisfied by it under this Agreement; provided that (i) the delivery of any notice pursuant to this Section 7.11 will not limit or otherwise affect the remedies available hereunder to the Party receiving such notice and (ii) the failure of a Party to disclose or notify the other Party of the occurrence, or non-occurrence, of an event described in clause (b) of this Section 7.11 will not constitute a breach or noncompliance of a covenant of such Party for purposes of determining the satisfaction of the conditions set forth in Section 8.2(b) or Section 8.3(b) .

         Section 7.12    Listing of Shares of Ecolab Common Stock.     Ecolab will use its reasonable best efforts to cause the shares of Ecolab Common Stock to be issued in the Merger to be approved for listing on the NYSE, subject to official notice of issuance, prior to the Closing Date.

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         Section 7.13    Section 16 of the Exchange Act.     Prior to the Effective Time, each of Ecolab and Nalco will take all such steps as may be required to cause any dispositions of Nalco equity securities (including derivative securities with respect to Nalco Common Stock) or acquisitions of Ecolab equity securities (including derivative securities with respect to Ecolab Common Stock) resulting from the transactions contemplated by this Agreement by each individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act to be exempt under Rule 16b-3 promulgated under the Exchange Act.

         Section 7.14    State Takeover Laws.     If any "fair price," "business combination" or "control share acquisition" statute or other similar statute or regulation is or becomes applicable to the transactions contemplated by this Agreement, Nalco and its Board of Directors will use their reasonable best efforts to grant such approvals and take such actions as are necessary so that the transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated by this Agreement and will otherwise act to minimize the effects of any such statute or regulation on the transactions contemplated by this Agreement.

         Section 7.15    Stockholder Litigation.     Nalco will promptly advise Ecolab orally and in writing of any Proceeding brought by any stockholder of Nalco against Nalco or its directors or officers relating to this Agreement or the transactions contemplated by this Agreement and will keep Ecolab fully informed regarding any such litigation. Nalco will give Ecolab the opportunity to participate in, subject to a customary joint defense agreement, but not control the defense of any such litigation, will give due consideration to Ecolab's advice with respect to such litigation and will not settle any such litigation without the prior written consent of Ecolab, such consent not to be unreasonably withheld or delayed. Ecolab will promptly advise Nalco orally and in writing of any Proceeding brought by any stockholder of Ecolab against Ecolab or its directors or officers relating to this Agreement or the transactions contemplated by this Agreement and will keep Ecolab fully informed regarding any such litigation. Ecolab will give Nalco the opportunity to participate in, subject to a customary joint defense agreement, but not control the defense of any such litigation, will give due consideration to Nalco's advice with respect to such litigation and will not settle any such litigation without the prior written consent of Nalco if such settlement would reasonably be expected to prevent or materially impair or materially delay the consummation of the Merger.

         Section 7.16    Control of Operations.     Without limiting any Party's rights or obligations under this Agreement, the Parties understand and agree that (a) nothing contained in this Agreement will give either Party, directly or indirectly, the right to control, direct or influence the other Party's operations prior to the Effective Time, (b) prior to the Effective Time, each Party will exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations.

         Section 7.17    Certain Transfer Taxes.     Any liability arising out of any real estate transfer Tax with respect to interests in real property owned directly or indirectly by Nalco or any the Nalco Subsidiaries immediately prior to the Merger, if applicable and due with respect to the Merger, will be borne by the Surviving Corporation and expressly will not be a liability of stockholders of Ecolab or Nalco.

         Section 7.18    Reorganization Treatment.     The Parties intend that the Merger qualify as a "reorganization" within the meaning of Section 368(a) of the Code, and each will not, and will not permit any of their respective Subsidiaries to, take any action, or fail to take any action, that would reasonably be expected to jeopardize the qualification of the Merger as a "reorganization" within the meaning of Section 368(a) of the Code. Provided that the opinion conditions contained in Section 8.2(d) and Section 8.3(c) have been satisfied, Ecolab will file the opinions described in Section 8.2(d) and Section 8.3(c) with the SEC by a post-effective amendment to the Form S-4 promptly following the Closing.

         Section 7.19    Tax Representation Letters.     Ecolab will use its reasonable best efforts to deliver to Baker & McKenzie LLP, counsel to Ecolab (" Ecolab's Counsel "), and Cravath, Swaine & Moore LLP,

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counsel to Nalco (" Nalco's Counsel "), a tax representation letter dated as of the Closing Date (and, if requested, dated as of the date the Form S-4 will have been declared effective by the SEC) and signed by an officer of Ecolab and Merger Sub, containing representations of Ecolab and Merger Sub, and Nalco will use its reasonable best efforts to deliver to Ecolab's Counsel and Nalco's Counsel a tax representation letter dated as of the Closing Date (and, if requested, dated as of the date the Form S-4 will have been declared effective by the SEC) and signed by an officer of Nalco, containing representations of Nalco, in each case as reasonably necessary or appropriate to enable Ecolab's Counsel to render the opinion described in Section 8.2(d) and Nalco's Counsel to render the opinion described in Section 8.3(c) .

         Section 7.20    Dividends.     From the date of this Agreement until the Effective Time, Ecolab and Nalco will reasonably coordinate with each other regarding the declaration and payment of dividends with respect to the shares of Ecolab Common Stock and Nalco Common Stock and the record dates and payment dates relating thereto such that (a) no holder of Ecolab Common Stock or Nalco Common Stock will receive two dividends, or fail to receive one dividend, for any single calendar quarter with respect to its shares of Ecolab Common Stock or Nalco Common Stock, including Ecolab Common Stock issued in connection with the Merger, and (b) the quarterly payments of dividends to the holders of Ecolab Common Stock will be made substantially in accordance with Ecolab's historical quarterly dividend payment schedule.

ARTICLE VIII
CONDITIONS PRECEDENT

         Section 8.1    Conditions to Each Party's Obligation to Effect the Merger.     The respective obligations of each Party to effect the Merger are subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions:

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         Section 8.2    Conditions to Obligations of Ecolab and Merger Sub.     The obligations of Ecolab and Merger Sub to effect the Merger are subject to the satisfaction, or waiver by Ecolab, on or prior to the Closing Date of the following additional conditions:

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         Section 8.3    Conditions to Obligations of Nalco.     The obligations of Nalco to effect the Merger are subject to the satisfaction of, or waiver by Nalco, on or prior to the Closing Date of the following additional conditions:

         Section 8.4    Frustration of Closing Conditions.     Neither Nalco nor Ecolab may rely, either as a basis for not consummating the Merger or terminating this Agreement and abandoning the Merger, on the failure of any condition set forth in this Article VIII to be satisfied if such failure was caused by such Party's intentional breach of any material provision of this Agreement or failure to use reasonable best efforts to consummate the Merger and the other transactions contemplated by this Agreement, as required by and subject to Section 7.4 .

ARTICLE IX
TERMINATION AND AMENDMENT

         Section 9.1    Termination.     This Agreement may be terminated and the transactions contemplated by this Agreement may be abandoned at any time prior to the Effective Time, whether before or after receipt of the Nalco Stockholder Approval or the Ecolab Stockholder Approval:

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         Section 9.2    Effect of Termination.     In the event of any termination of this Agreement as provided in Section 9.1 , the obligations of the Parties under this Agreement will terminate and there will be no liability on the part of any Party with respect thereto, except for the confidentiality provisions of Section 7.3 and the provisions of this Section 9.2 , Section 9.3 (which, subject to the proviso of this sentence, will constitute the sole and exclusive remedy of the Party receiving payment thereunder) and Article X , each of which will remain in full force and effect; provided that no Party will be relieved or released from any liability or damages arising from an intentional breach of any provision of this Agreement or fraud, and the aggrieved Party will be entitled to all rights and remedies available at law or in equity, including (a) in the case of a breach by Ecolab or Merger Sub, liability to Nalco for damages, determined taking into account all relevant factors, including, without duplication, the loss of the benefit of the Merger to Ecolab and the lost stockholder premium and any benefit to Ecolab or its stockholders arising from such breach, and (b) in the case of a breach by Nalco, liability to Ecolab for damages determined taking into account all relevant factors, including the loss of the benefit of the Merger to Ecolab and any benefit to Nalco or its stockholders arising from such breach. The foregoing sentence is not intended to create any right of the stockholders of Nalco or Ecolab to bring any action against the other Party pursuant to this Agreement. The Parties acknowledge and agree that the payment of the Nalco Termination Fee or the Ecolab Termination Fee, as applicable, pursuant to Section 9.3 will not preclude such non-breaching Party in the case of an intentional breach of this Agreement or fraud by such breaching Party from seeking additional damages from such breaching Party on account of such intentional breach or fraud.

         Section 9.3    Termination Fee and Expense Reimbursement .    

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ARTICLE X
GENERAL PROVISIONS

         Section 10.1    Non-Survival of Representations, Warranties and Agreements.     None of the representations, warranties, covenants and agreements in this Agreement or in any instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such representations, warranties, covenants and agreements, will survive the Effective Time, except for those covenants and agreements contained in this Agreement and such other instruments (including Section 7.9 ) that by their terms apply or are to be performed in whole or in part after the Effective Time and this Article X .

         Section 10.2    Notices.     All notices and other communications in connection with this Agreement will be in writing and will be deemed duly given (a) on the date of delivery if delivered personally or by facsimile, upon confirmation of receipt, (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service or (c) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices in connection with this Agreement will be delivered as set forth below or pursuant to such other instructions as may be designated in writing by the Party to receive such notice:

    If to Ecolab or Merger Sub, to:

 
 
Ecolab Inc.
370 Wabasha Street North
Saint Paul, Minnesota 55102
    Facsimile:   (651) 293-2471
    Attention:   James J. Seifert
Vice President, General Counsel and Secretary

 
 
with a copy (which will not constitute notice) to:

 
 
Baker & McKenzie LLP
130 East Randolph Drive
Chicago, Illinois 60601
    Facsimile:   (312) 861-2899
    Attention:   Dieter A. Schmitz
Craig A. Roeder

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If to Nalco, to:

 
 
Nalco Holding Company
1601 West Diehl Road
Naperville, Illinois 60563-1198
    Facsimile:   (630) 305-2840
    Attention:   Office of General Counsel

 
 
with a copy (which will not constitute notice) to:

 
 
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
    Facsimile:   (212) 474-3700
    Attention:   Scott A. Barshay
George F. Schoen

         Section 10.3    Counterparts; Effectiveness.     This Agreement may be executed in two or more counterparts, each of which will be deemed to be an original but all of which will constitute one and the same instrument. This Agreement will become effective when each Party has received counterparts signed and delivered (by facsimile or otherwise) by the other Parties.

         Section 10.4    Entire Agreement; Third Party Beneficiaries.     This Agreement (including the Exhibits, Schedules and the Parties' disclosure letters) and the Confidentiality Agreement constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, between the Parties with respect to their subject matter. This Agreement will be binding upon and inure solely to the benefit of each Party, and nothing in this Agreement, express or implied, is intended to or will confer upon any Person not a party to this Agreement any rights, benefits or remedies of any nature whatsoever, other than (a)  Section 7.9 , which is intended to be for the benefit of the Indemnified Persons and their heirs and assigns covered thereby and may be enforced by such Indemnified Persons and their heirs and assigns and (b)  Article II , which is intended to be for the benefit of holders of shares of Nalco Common Stock, Nalco Stock Options and Nalco Stock-Based Awards with respect to the right of such holders to receive, as applicable, the Merger Consideration, Converted Stock Options or Converted Stock-Based Awards.

         Section 10.5    Severability.     If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement will nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any Party. Notwithstanding the foregoing, upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties will negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated by this Agreement are consummated as originally contemplated to the greatest extent possible.

         Section 10.6    Assignment.     Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by any of the Parties, in whole or in part (whether by operation of Law or otherwise), without the prior written consent of the other Parties, and any attempt to make any such assignment without such consent will be null and void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and assigns.

         Section 10.7    Amendment.     This Agreement may be amended by the Parties, by action taken or authorized by their respective Boards of Directors, at any time before or after approval of the matters

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presented in connection with the Merger by the stockholders of Nalco or the stockholders of Ecolab, but after such approval, no amendment will be made which by Law or in accordance with the rules of the NYSE requires further approval by such stockholders without such further approval. Notwithstanding the preceding sentence, no amendment will be made to this Agreement after the Effective Time. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties.

         Section 10.8    Extension; Waiver.     At any time prior to the Effective Time, the Parties, by action taken or authorized by their respective Boards of Directors, may to the extent legally permitted (a) extend the time for the performance of any of the obligations or other acts of the other Parties, (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement and (c) waive compliance with any of the agreements or conditions contained in this Agreement. No extension or waiver will be made which by Law or in accordance with the rules of the NYSE requires further approval by the stockholders of Nalco or the stockholders of Ecolab without such further approval. Any agreement on the part of a Party to any such extension or waiver will be valid only if set forth in a written instrument signed on behalf of such Party. The failure of any Party to assert any of its rights under this Agreement or otherwise will not constitute a waiver of those rights.

         Section 10.9    Governing Law and Venue: Waiver of Jury Trial .    

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         Section 10.10    Enforcement.     The Parties acknowledge and agree that irreparable damage would occur in the event that any provision of this Agreement was not performed in accordance with its specific terms or was otherwise breached, and that monetary damages, even if available, would not be an adequate remedy therefor. Except as provided in Section 9.2 , it is accordingly agreed that the Parties will be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the performance of the terms and provisions hereof in any court referred to in Section 10.9 , without proof of actual damages (and each Party hereby waives any requirement for the securing or posting of any bond in connection with such remedy), this being in addition to any other remedy to which they are entitled at Law or in equity. The Parties further agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to Law or inequitable for any reason, nor to assert that a remedy of monetary damages would provide an adequate remedy for such breach.

[ Signature page follows .]

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        IN WITNESS WHEREOF, Ecolab Inc., Sustainability Partners Corporation and Nalco Holding Company have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first above written.

    ECOLAB INC.

 
 
By:
 
/s/ DOUGLAS M. BAKER, JR.

 
 
Name:
 
Douglas M. Baker, Jr.

 
 
Title:
 
Chairman of the Board, President and Chief Executive Officer


 

 

SUSTAINABILITY PARTNERS CORPORATION

 
 
By:
 
/s/ DOUGLAS M. BAKER, JR.

 
 
Name:
 
Douglas M. Baker, Jr.

 
 
Title:
 
Chairman of the Board, President and Chief Executive Officer


 

 

NALCO HOLDING COMPANY

 
 
By:
 
/s/ J. ERIK FYRWALD

 
 
Name:
 
J. Erik Fyrwald

 
 
Title:
 
Chairman, President and Chief Executive Officer

[Signature Page to Merger Agreement]



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Exhibit 99.1

         GRAPHIC

      News Release

           Ecolab Inc.
          370 Wabasha Street North
          St. Paul, Minnesota 55102


FOR IMMEDIATE RELEASE

Michael J. Monahan (651) 293-2809


ECOLAB AND NALCO TO MERGE

         Ecolab to pay approximately $5.4 billion, valuing Nalco stock at $38.80 per share

Merger Highlights :

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        ST. PAUL, Minn., July 20, 2011: Ecolab Inc. and Nalco Holding Company announced the board of directors of both companies have unanimously approved a definitive agreement under which Nalco will merge with a subsidiary of Ecolab in a transaction valued at approximately $8 billion, including assumed Nalco net debt.

        Based in Naperville, Illinois, with operations in more than 150 countries, Nalco is the world's leading water treatment and process improvement company, offering water management sustainability services focused on industrial, energy and institutional market segments. Nalco delivers significant environmental, social and economic performance benefits to customers through value-added services in water treatment and management, pollution reduction programs, energy conservation, and oil and gas extraction efficiency and sustainability offerings. Nalco sales were $4 billion in 2010.

        Under the terms of the transaction, Nalco shareholders will have the option to receive either 0.7005 shares of Ecolab common stock or $38.80 per Nalco share in cash, without interest, subject to proration such that the overall consideration paid to Nalco shareholders will be approximately 70% in Ecolab shares and 30% in cash. The stock component of the consideration will represent a tax-free exchange. In aggregate, Ecolab will issue approximately 68.9 million shares of Ecolab stock and pay approximately $1.6 billion in cash to Nalco shareholders. This represents a fully-diluted offer value for Nalco's equity of $5.4 billion and, inclusive of $2.7 billion in Nalco net debt, a total transaction value of $8.1 billion.

        The transaction is expected to close in the fourth quarter, subject to customary closing conditions, regulatory clearance, as well as approval of both Ecolab and Nalco shareholders.

        Ecolab also announced that it expects adjusted earnings per share for the quarter ended June 30, 2011 to be $0.64, at the top end of its forecasted range for the quarter. In addition, Ecolab has raised its full year 2011 adjusted earnings per share forecast, before consideration of the transaction, to $2.52 to $2.56 from $2.49 to $2.53. As previously announced, Ecolab expects to report second quarter 2011 results on July 27, 2011.

        Douglas M. Baker, Jr., Ecolab's Chairman, President and Chief Executive Officer commented on the announcement, saying, "This merger is a strong and vital step in broadening our business platform and enhancing our global growth opportunities. The key to Ecolab's long record of consistent and above-average growth has been our ability to continually expand the markets we serve, meet the needs of the customers within these markets, and execute. Through our participation in the water sector and our strategic planning work, we identified water management as a key future growth segment for us given its growth characteristics and importance to our customers. Nalco is the global leader with deep expertise in programs and services to enhance water process efficiency, extend asset life, and improve their customers' end products. Nalco's water and oil and gas services end markets in particular represent excellent long term growth potential as the world deals with the quality, cost and availability of those key natural resources. Further, its geographic exposure to high-growth emerging markets offers terrific future potential for the combined companies."

        Erik Fyrwald, Nalco's Chairman, President and Chief Executive Officer said, "This is a compelling strategic transaction that delivers an immediate premium to our shareholders and the opportunity to participate in the significant upside potential of the combined organization. We have long admired Ecolab, and we share similar cultures and business models. We look forward to working together to realize the benefits for all of our stakeholders, including our shareholders, customers and employees."

        Baker also said, "This merger is driven by the outstanding top-line opportunities that we believe our combined companies can more effectively achieve as one. We believe we can help accelerate Nalco's investments in its product innovation and sales and service force, enhancing the range of effective and efficient solutions for both of our customers and bolstering growth prospects for both our firms. We expect that together we will have stronger, more consistent long-term growth opportunities,

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and together we will have the people, business and financial resources to capture that growth. We are excited by the potential our combined operations offer and the improved solutions we will bring to our customers, as well as additional opportunities for both companies' associates, and we presently expect 2012 adjusted earnings per share for the combined companies to be approximately $3 per share.

        Baker concluded by saying, "Through this combination, we will continue to invest in and expand our products and services to our existing customers while adding new opportunities for better customer service. We look forward to completing the transaction and joining our two great companies together in developing new and improved solutions for critical customer needs, and in turn deliver even better shareholder returns."

Strategic Highlights:

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        Bank of America Merrill Lynch acted as exclusive financial advisor to Ecolab in connection with the transaction and Baker & McKenzie acted as legal counsel.

About Ecolab

        With sales of $6 billion and more than 26,000 associates, Ecolab Inc. (NYSE: ECL) is the global leader in cleaning, sanitizing, food safety and infection prevention products and services. Ecolab delivers comprehensive programs and services to foodservice, food and beverage processing, healthcare, and hospitality markets in more than 160 countries. More news and information is available at www.ecolab.com.

About Nalco

        Nalco (NYSE: NLC) is the world's largest sustainability services company focused on industrial water, energy and air applications, delivering significant environmental, social and economic performance benefits to their customers. Nalco helps customers reduce energy, water and other natural resource consumption, enhance air quality, minimize environmental releases and improve productivity and end products while boosting the bottom line. Its comprehensive solutions contribute to the sustainable development of customer operations. More than 12,000 Nalco employees operate in 150 countries supported by a comprehensive network of manufacturing facilities, sales offices and research centers to serve a broad range of end markets. In 2010, Nalco achieved sales of $4 billion. For more information visit www.nalco.com .

        Ecolab will host a live webcast to review this announcement and updated earnings guidance today at 9:00 a.m. Eastern Time. To participate in the call via telephone, dial 1-888-787-0203 from the U.S./Canada, using the password: Conference call. The webcast, along with related presentation slides, will be available to the public on Ecolab's website at www.ecolab.com/investor . A replay of the webcast and related materials will be available at that site.

        Listening to the webcast requires Internet access, the Windows Media Player or other compatible streaming media player.

Cautionary Statements Regarding Forward-Looking Information

        This news release contains certain statements relating to future events and our intentions, beliefs, expectations and predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "we believe," "we expect," "estimate," "project," "may," "will," "intend," "plan," "believe," "target," "forecast" (including the negative or variations thereof) or similar terminology used in connection with any discussion of future plans, actions or events generally identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding benefits of the merger, integration plans and expected synergies, the expected timing of completion of the merger, and anticipated future financial and operating performance and results, including estimates for growth. These statements are based on the current expectations of management of Ecolab and Nalco, as applicable. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this communication. These risks and uncertainties include (i) the risk that the stockholders of Nalco may not adopt the merger agreement, (ii) the risk that the stockholders of

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Ecolab may not approve the issuance of Ecolab common stock to Nalco stockholders in the merger, (iii) the risk that the companies may be unable to obtain regulatory approvals required for the merger, or that required regulatory approvals may delay the merger or result in the imposition of conditions that could have a material adverse effect on the combined company or cause the companies to abandon the merger, (iv) the risk that the conditions to the closing of the merger may not be satisfied, (v) the risk that a material adverse change, event or occurrence may affect Ecolab or Nalco prior to the closing of the merger and may delay the merger or cause the companies to abandon the merger, (vi) the risk that an unsolicited offer by another company to acquire shares or assets of Ecolab or Nalco could interfere with or prevent the merger, (vii) problems that may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected, (viii) the possibility that the merger may involve unexpected costs, unexpected liabilities or unexpected delays, (ix) the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies currently expect, (x) the risk that the businesses of the companies may suffer as a result of uncertainty surrounding the merger and (xi) the risk that disruptions from the transaction will harm relationships with customers, employees and suppliers.

        Other unknown or unpredictable factors could also have material adverse effects on future results, performance or achievements of Ecolab, Nalco and the combined company. For a further discussion of these and other risks and uncertainties applicable to the respective businesses of Ecolab and Nalco, see the Annual Reports on Form 10-K of Ecolab and Nalco for the fiscal year ended December 31, 2010 and the companies' other public filings with the SEC. These risks, as well as other risks associated with the merger, will be more fully discussed in the joint proxy statement/prospectus that will be included in the Registration Statement on Form S-4 that Ecolab will file with the SEC in connection with the merger. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this communication may not occur. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this communication. Neither Ecolab nor Nalco undertakes, and each of them expressly disclaims, any duty to update any forward-looking statement whether as a result of new information, future events or changes in their respective expectations, except as required by law.

Additional Information and Where to Find it

        Ecolab will file with the Securities and Exchange Commission (the "SEC") a registration statement on Form S-4 that will include a joint proxy statement of Ecolab and Nalco that will also constitute a prospectus of Ecolab relating to the proposed transaction. WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION about Ecolab, Nalco and the proposed merger. Investors and security holders will be able to obtain these materials (when they are available) and other documents filed with the SEC free of charge at the SEC's website, www.sec.gov . In addition, copies of the registration statement and joint proxy statement/prospectus (when they become available) may be obtained free of charge by accessing Ecolab's website at www.ecolab.com by clicking on the "Investor" link and then clicking on the "SEC Filings" link or by writing Ecolab at 370 Wabasha Street North, Saint Paul, Minnesota, 55102, Attention: Secretary or by accessing Nalco's website at www.nalco.com by clicking on the "Investors" link and then clicking on the "SEC Filings" link or by writing Nalco at 1601 West Diehl Road, Naperville, Illinois 60563, Attention: Secretary and security holders may also read and copy any reports, statements and other information filed by Ecolab or Nalco with the SEC, at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC's website for further information on its public reference room.

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Participants in the Merger Solicitation

        Ecolab, Nalco and certain of their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Ecolab's directors and executive officers is available in its proxy statement filed with the SEC by Ecolab on March 18, 2011 in connection with its 2011 annual meeting of shareholders, and information regarding Nalco's directors and executive officers is available in its proxy statement filed with the SEC by Nalco on March 14, 2011 in connection with its 2011 annual meeting of shareholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the registration statement and joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

Non-Solicitation

        This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Non-GAAP Financial Information

        This news release includes financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S. (GAAP), including adjusted diluted earnings per share. We provide this measure as additional information regarding our operating results. We use this non-GAAP measure internally to evaluate our performance and in making financial and operational decisions, including with respect to incentive compensation. We believe that our presentation of this measure provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparison of results.

        We include in special gains and charges items that are unusual in nature, significant in amount and important to an understanding of underlying business performance. In order to better allow investors to compare underlying business performance period-to-period, we provide adjusted diluted earnings per share, which excludes special gains and charges and discrete tax items.

        The non-GAAP financial measures are not in accordance with, or an alternative to, GAAP, and may be different from non-GAAP measures used by other companies. Investors should not rely on any single financial measure when evaluating our business. We recommend that investors view these measures in conjunction with the applicable GAAP measures.

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FOR IMMEDIATE RELEASE Michael J. Monahan (651) 293-2809
ECOLAB AND NALCO TO MERGE