THE LUBRIZOL
CORPORATION,
Wells Fargo Bank, National
Association,
FIRST SUPPLEMENTAL
INDENTURE
Dated as of January 27,
2009
to the Indenture dated as of
January 27, 2009
8.875% Senior Notes due
2019
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Page
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APPLICATION OF SUPPLEMENTAL INDENTURE
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Section 1.01. Application of First
Supplemental Indenture
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2
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Section 2.01. Certain Terms Defined in the
Indenture
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2
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Section 2.02. Definitions
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2
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FORM AND TERMS OF THE NOTES
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Section 3.01. Form and Dating
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5
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Section 3.02. Terms of the Notes
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5
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Section 3.03. Optional
Redemption
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8
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Section 3.04. Repurchase of Notes upon a
Change of Control
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9
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Section 4.01. Trust Indenture Act
Controls
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10
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Section 4.02. New York Law to
Govern
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10
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Section 4.03. Counterparts
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11
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Section 4.04. Severability
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Section 4.05. Ratification
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Section 4.06. Effectiveness
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Section 4.07. Trustee Makes No
Representation
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EXHIBIT A – Form of 8.875% Senior Note due
2019
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A-1
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i
FIRST SUPPLEMENTAL
INDENTURE
SUPPLEMENTAL
INDENTURE (this “ First Supplemental Indenture
”), dated as of January 27, 2009, between The Lubrizol
Corporation, an Ohio corporation (the “ Company
”), and Wells Fargo Bank, National Association, as Trustee
(the “ Trustee ”).
WHEREAS , the Company and the Trustee executed and delivered
an Indenture, dated as of January 27, 2009 (the “ Base
Indenture ,” and together with the First Supplemental
Indenture, the “ Indenture ”), to provide for
the issuance by the Company from time to time of Securities to be
issued in one or mores series as provided in the
Indenture;
WHEREAS , Section 901 of the Base Indenture provides,
among other things, that the Company and the Trustee may enter into
indentures supplemental to the Base Indenture, without the consent
of any Holders of Securities, to establish the form of any
Security, as permitted by Section 201 of the Base Indenture,
and to provide for the issuance of the Notes (as defined below), as
permitted by Section 301 of the Base Indenture, and to set
forth the terms thereof;
WHEREAS , the Company desires to execute this First
Supplemental Indenture pursuant to Section 201 of the Base
Indenture to establish the form, and pursuant to Section 301
of the Base Indenture to provide for the issuance, of a series of
its senior notes designated as its 8.875% Senior Notes due
February 1, 2019 (the “ Notes ”), in an
initial aggregate principal amount of $500,000,000. The Notes are a
series of securities as referred to in Section 301 of the Base
Indenture.
WHEREAS , the Company has delivered to the Trustee an
Opinion of Counsel and an Officers’ Certificate pursuant to
Sections 102 and 903 of the Base Indenture to the effect
that the execution and delivery of the First Supplemental Indenture
is authorized or permitted under the Base Indenture and that all
conditions precedent provided for in the Base Indenture to the
execution and delivery of this First Supplemental Indenture to be
complied with by the Company have been complied with;
WHEREAS , the Company has requested that the Trustee execute
and deliver this First Supplemental Indenture;
WHEREAS , all things necessary have been done by the Company
to make this First Supplemental Indenture, when executed and
delivered by the Company, a valid and legally binding instrument;
and
WHEREAS , all things necessary have been done by the Company
to make the Notes, when executed by the Company and authenticated
and delivered in accordance with the provisions of this Indenture,
the valid obligations of the Company;
1
In
consideration of the premises stated herein and the purchase of the
Notes by the Holders thereof, the Company and the Trustee mutually
covenant and agree for the equal and proportionate benefit of the
respective Holders from time to time of the Notes as
follows:
ARTICLE 1
APPLICATION OF SUPPLEMENTAL INDENTURE
Section 1.01.
Application of First Supplemental Indenture .
Notwithstanding any other provision of this First Supplemental
Indenture, all provisions of this First Supplemental Indenture are
expressly and solely for the benefit of the Holders of the Notes
and any such provisions shall not be deemed to apply to any other
securities issued under this Indenture and shall not be deemed to
amend, modify or supplement the Base Indenture for any purpose
other than with respect to the Notes. Unless otherwise expressly
specified, references in this Supplemental Indenture to specific
Article numbers or Section numbers refer to Articles and Sections
contained in this Supplemental Indenture as they amend or
supplement the Base Indenture, and not the Base Indenture or any
other document. All Initial Notes and Additional Notes, if any,
will be treated as a single class for all purposes of this
Indenture, including waivers, amendments, redemptions and offers to
purchase.
Section 2.01.
Certain Terms Defined in the Indenture . For purposes of
this First Supplemental Indenture, all capitalized terms used but
not defined herein shall have the meanings ascribed to such terms
in the Base Indenture, as amended hereby.
Section 2.02.
Definitions . For the benefit of the Holders of the Notes,
Section 1.1 of the Base Indenture shall be amended by adding
the following new definitions:
“
Additional Notes ” has the meaning specified in
Section 3.02(b) hereto.
“
Change of Control ” means the occurrence of any of the
following: (1) the consummation of any transaction (including,
without limitation, any merger or consolidation) the result of
which is that any “person” (as that term is used in
Section 13(d) of the Exchange Act) (other than the Company or
one of its Subsidiaries) becomes the beneficial owner (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of more than 50% of the Voting Stock of the Company or
other Voting Stock into which the Voting Stock of the Company is
reclassified, consolidated, exchanged or changed, measured by
voting power rather than number of shares; (2) the direct or
indirect sale, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of
the Company and the assets of its Subsidiaries, taken as a whole,
to one or more “persons” (as that term is used in
Section 13(d) of the Exchange Act) (other than to the Company
or one of its Subsidiaries); (3) the Company consolidates
with, or merges with or into, any “person” (as that
term is used in Section 13(d) of the Exchange Act), or any
such person consolidates with, or merges with or into, the Company,
in either case, pursuant to a transaction in which any of the
Company’s outstanding Voting Stock or the Voting Stock of
such
2
other person is
converted into or exchanged for cash, securities or other property,
other than pursuant to a transaction in which shares of the
Company’s Voting Stock outstanding immediately prior to the
transaction constitute, or are converted into or exchanged for, a
majority of the Voting Stock of the surviving person immediately
after giving effect to such transaction; (4) the adoption of a
plan relating to the Company’s liquidation or dissolution; or
(5) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing
Directors.
“
Change of Control Triggering Event ” means the
occurrence of both a Change of Control and a Rating
Event.
“
Comparable Treasury Issue ” means the United States
Treasury security or securities selected by a Quotation Agent as
having an actual or interpolated maturity comparable to the
remaining term of the Notes to be redeemed that would be utilized,
at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of a
comparable maturity to the remaining term of such Notes.
“
Comparable Treasury Price ” means, with respect to any
Redemption Date, (A) the arithmetic average of the Reference
Treasury Dealer Quotations for such Redemption Date, after
excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (B) if the Quotation Agent obtains fewer than
four such Reference Treasury Dealer Quotations, the arithmetic
average of all quotations for such Redemption Date.
“
Continuing Director ” means, as of any date of
determination, any member of the Company’s Board of Directors
who (1) was a member of such Board of Directors on the date
the Notes were issued, (2) was nominated for election to such
Board of Directors with the approval of a committee of the Board of
Directors consisting of a majority of independent Continuing
Directors or (3) was nominated for election, elected or
appointed to such Board of Directors with the approval of a
majority of the Continuing Directors who were members of such Board
of Directors at the time of such nomination, election or
appointment (either by a specific vote or by approval of the
Company’s proxy statement in which such member was named as a
nominee for election as a director, without objection to such
nomination).
“
Exchange Act ” means the Securities Exchange Act of
1934, as amended.
“
Global Note ” means, individually and collectively,
each of the Notes in the form of Global Securities issued to the
Depositary or its nominee, substantially in the form of
Exhibit A.
“
Initial Notes ” has the meaning specified in
Section 3.02(b) hereto.
“
Investment Grade Rating ” means a rating equal to or
higher than Baa3 (or the equivalent) by Moody’s and BBB- (or
the equivalent) by S&P, or, if applicable, the equivalent
investment grade credit rating from any Substitute Rating Agency
selected by the Company.
“
Moody’s ” means Moody’s Investors Service,
Inc. or any successor thereto.
“
Notes ” has the meaning specified in the recitals
hereto.
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“
Primary Treasury Dealer ” means a primary U.S.
Government securities dealer in The City of New York.
“
Principal Amount ” means the aggregate principal
amount of all Outstanding Initial Notes and Additional
Notes.
“
Quotation Agent ” means one of the Reference Treasury
Dealers appointed by the Company; provided, however , that
if such Reference Treasury Dealer ceases to be a Primary Treasury
Dealer, the Company shall substitute another Primary Treasury
Dealer.
“
Rating Agencies ” means (1) each of Moody’s
and S&P and (2) if any of Moody’s and S&P ceases
to rate the Notes or fails to make a rating of the Notes publicly
available for reasons outside of the control of the Company, a
Substitute Rating Agency in lieu thereof.
“
Rating Event ” means the rating on the Notes is
lowered independently by each of the Rating Agencies and the Notes
are rated below an Investment Grade Rating by each of the Rating
Agencies on any day during the period commencing 60 days prior
to the first public notice of the occurrence of a Change of Control
or the Company’s intention to effect a Change of Control and
ending 60 days following consummation of such Change of
Control (which period will be extended so long as the rating of the
Notes is under publicly announced consideration for a possible
downgrade by any of the Rating Agencies).
“
Redemption Date ” when used with respect to the Notes
to be redeemed, means the date fixed for such redemption pursuant
to the Indenture or this First Supplemental Indenture.
“
Reference Treasury Dealer ” means any of Citigroup
Global Markets Inc., Deutsche Bank Securities Inc. and J.P. Morgan
Securities Inc. or their respective affiliates, which are primary
U.S. Government securities dealers in The City of New York, and
their respective successors plus two other primary U.S. Government
securities dealers in The City of New York selected by the Company;
provided, however , that if any of the foregoing or their
affiliates shall cease to be a Primary Treasury Dealer, the Company
shall substitute therefor another Primary Treasury
Dealer.
“
Reference Treasury Dealer Quotations ” means, with
respect to each Reference Treasury Dealer and any Redemption Date,
the arithmetic average, as determined by the Quotation Agent, of
the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its Principal Amount)
quoted in writing to the Quotation Agent by such Reference Treasury
Dealer at 3:30 p.m. New York City time on the third Business
Day preceding such Redemption Date.
“
S&P ” means Standard & Poor’s Rating
Services, a division of The McGraw-Hill Companies, Inc., or any
successor thereto.
“
Substitute Rating Agency ” means a “nationally
recognized statistical rating organization” within the
meaning of Rule l5c3-l(c)(2)(vi)(F) under the Exchange Act selected
by the Company (as certified by a resolution of the Board of
Directors of the Company) and which
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is reasonably
acceptable to the Trustee as a replacement agency for Moody’s
or S&P, or both of them, as the case may be.
“
Treasury Rate ” means, with respect to any Redemption
Date, the rate per annum equal to the semiannual equivalent yield
to maturity or interpolated (on a day count basis) of the
Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its Principal Amount)
equal to the Comparable Treasury Price for such Redemption
Date.
“
Trustee ” has the meaning specified in the first
paragraph hereto.
“
Voting Stock ” means, with respect to any specified
“person” (as that term is used in Section 13(d) of
the Exchange Act) as of any date, the capital stock of such person
that is at the time entitled to vote generally in the election of
the Board of Directors of such person.
ARTICLE 3
FORM AND TERMS OF THE NOTES
Section 3.01.
Form and Dating . The Notes and the Trustee’s
certificate of authentication shall be substantially in the form of
Exhibit A attached hereto. The Notes shall be executed
on behalf of the Company by an Officer of the Company. The Notes
may have notations, legends or endorsements required by law, stock
exchange rules or usage. Each Note shall be dated the date of its
authentication. The Notes and any beneficial interest in the Notes
shall be in minimum denominations of $2,000 and integral multiples
of $1,000 in excess thereof.
The
terms and notations contained in the Notes shall constitute, and
are hereby expressly made, a part of the Indenture, and the Company
and the Trustee, by their execution and delivery of this First
Supplemental Indenture, expressly agree to such terms and
provisions and to be bound thereby.
(a)
Global Note . The Notes shall be issued initially in
permanent global form (the “ Global Note ”),
which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Depositary and registered in the name
of Cede & Co., the Depositary’s nominee, duly executed on
behalf of the Company by an Officer, authenticated by the
Trustee.
(b)
Book-Entry Provisions . This Section 3.01(b) shall
apply only to the Global Note deposited with or on behalf of the
Depositary.
The
Company shall execute and the Trustee shall, in accordance with
this Section 3.01(b), authenticate and deliver each Global
Note that shall be registered in the name of the Depositary or the
nominee of the Depositary and shall be delivered by the Trustee to
the Depositary or pursuant to the Depositary’s
instructions.
Section 3.02.
Terms of the Notes . The following terms relating to the
Notes are hereby established:
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(a)
Title . The Notes shall constitute a series of Securities
having the title “8.875% Senior Notes due
2019”.
(b)
Principal Amount . The aggregate principal amount of the
Notes that may be initially authenticated and delivered under the
Indenture (the “ Initial Notes ”) shall be
$500,000,000. The Company may from time to time, without the
consent of the Holders of Notes, issue additional Notes (in any
such case “ Additional Notes ”) having the same
ranking and the same interest rate, Maturity and other terms as the
Initial Notes. Any Additional Notes and the Initial Notes shall
constitute a single series under the Indenture and all references
to the Notes shall include the Initial Notes and any Additional
Notes unless the context otherwise requires.
(c)
Maturity Date . The entire Outstanding principal of the
Notes shall be payable on February 1, 2019.
(i) The rate at
which the Notes shall bear interest shall be 8.875% per annum,
subject to Section 3.02(d)(ii); the date from which interest
shall accrue on the Notes shall be January 27, 2009, or the
most recent Interest Payment Date to which interest has been paid
or provided for; the Interest Payment Dates for the Notes shall be
February 1 and August 1 of each year, beginning August 1,
2009; the interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date, will be paid, in immediately
available funds, to the Persons in whose names the Notes are
registered at the close of business on the Regular Record Date for
such interest, which shall be the January 15 or July 15,
as the case may be, immediately preceding such Interest Payment
Date.
(ii) The interest
rate payable on the Notes shall be subject to adjustments from time
to time if either Moody’s or S&P (or, in either case, any
Substitute Rating Agency thereof) downgrades (or subsequently
upgrades) the debt rating assigned to the Notes, in the manner
described below.
If
the rating of the Notes from Moody’s (or any Substitute
Rating Agency) is decreased to a rating set forth in the
immediately following table, the interest rate on the Notes shall
increase from the interest rate payable on the Notes on the date of
their initial issuance by the percentage set forth opposite that
rating:
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Moody’s
Rating*
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Percentage
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0.25
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%
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0.50
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%
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0.75
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%
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1.00
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%
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*
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Including the
equivalent ratings of any Substitute Rating Agency.
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If
the rating of the Notes from S&P (or any Substitute Rating
Agency) is decreased to a rating set forth in the immediately
following table, the interest rate on the Notes shall increase from
the interest rate payable on the Notes on the date of their initial
issuance by the percentage set forth opposite that
rating:
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S&P
Rating*
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Percentage
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0.25
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%
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0.50
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%
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0.75
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%
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1.00
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%
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*
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Including the
equivalent ratings of any Substitute Rating Agency.
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If
at any time the interest rate on the Notes has been adjusted upward
and either Moody’s or S&P (or, in either case, any
Substitute Rating Agency thereof), as the case may be, subsequently
increases its rating of the Notes to any of the threshold ratings
set forth above, the interest rate on the Notes shall be decreased
such that the interest rate for the Notes equals the interest rate
payable on the Notes on the date of their initial issuance plus the
percentages set forth opposite the applicable ratings from the
tables above in effect immediately following the increase. If
Moody’s (or any Substitute Rating Agency) subsequently
increases its rating of the Notes to Baa3 or higher (or an
equivalent rating of such Substitute Rating Agency), and S&P
(or any Substitute Rating Agency) increases its rating to BBB- or
higher (or an equivalent rating of such Substitute Rating Agency),
the interest rate on the Notes shall be decreased to the interest
rate payable on the Notes on the date of their initial issuance. In
addition, the interest rate on the Notes shall permanently cease to
be subject to any adjustment described above (notwithstanding any
subsequent decrease in the ratings by either or both Rating
Agencies) if the Notes become rated A3 and A- or higher by
Moody’s and S&P, respectively (or, in either case, the
equivalent ratings of any Substitute Rating Agency, or one of these
ratings if the Notes are only rated by one Rating
Agency).
Each
adjustment required by any decrease or increase in a rating set
forth above, whether occasioned by the action of Moody’s or
S&P (or, in either case, any Substitute Rating Agency thereof),
shall be made independent of any and all other adjustments. In no
event shall (1) the interest rate payable for the Notes be
reduced to below the interest rate payable on the Notes on the date
of their initial issuance or (2) the total increase in the
interest rate on the Notes exceed 2.00% above the interest rate
payable on the Notes on the date of their initial
issuance.
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