Exhibit 10.1
EXECUTION COPY
AMENDMENT NO. 2 TO THE
CREDIT AGREEMENT
Dated as of September 20, 2006
          AMENDMENT NO. 2 TO THE CREDIT AGREEMENT among The Lubrizol Corporation
(the “Borrower”), the banks, financial institutions and other institutional
lenders parties to the Credit Agreement referred to below (collectively, the
“Lenders”) and Citicorp North America, Inc., as agent (the “Agent”) for the
Lenders.
          PRELIMINARY STATEMENTS:
          (1) The Borrower, the Lenders and the Agent have entered into a Credit
Agreement dated as of August 24, 2004, as amended and restated as of March 29,
2005, and as further amended as of August 23, 2005 (such Credit Agreement, as so
amended and restated and amended, the “Credit Agreement”). Capitalized terms not
otherwise defined in this Amendment have the same meanings as specified in the
Credit Agreement.
          (2) The Borrowers and the Lenders have agreed to further amend the
Credit Agreement as hereinafter set forth.
          SECTION 1. Amendments to the Credit Agreement. The Credit Agreement
is, effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 2, hereby amended as follows:
          (a) The definition of “Applicable Facility Fee Rate” in Section 1.01
is amended by deleting the table therein and substituting therefor the following
table:

          Public Debt Rating   Applicable S&P/Moody’s   Facility Fee Rate
Level 1
       
BBB+ or Baa1 or above
    0.080 %
Level 2
       
BBB or Baa2
    0.100 %
Level 3
       
BBB- or Baa3
    0.125 %
Level 4
       
BB+ or Ba1
    0.175 %
Level 5
       
Lower than Level 4
    0.250 %

          (b) The definition of “Applicable Margin” in Section 1.01 is replaced
in its entirety with the following:

 

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“Applicable Margin” means (a) with respect to Base Rate Advances under the
Revolving Credit Facility, 0.00%, and (b) with respect to Eurodollar Rate
Advances under the Revolving Credit Facility as of any date, a percentage per
annum determined by reference to the Public Debt Rating in effect on such date
as set forth below:

          Public Debt Rating   Applicable Margin for S&P/Moody’s   Eurodollar
Rate Advances
Level 1
       
BBB+ or Baa1 or above
    0.270 %
Level 2
       
BBB or Baa2
    0.350 %
Level 3
       
BBB- or Baa3
    0.400 %
Level 4
       
BB+ or Ba1
    0.600 %
Level 5
       
Lower than Level 4
    0.650 %

          (c) The definition of “Applicable Utilization Fee” in Section 1.01 is
amended by deleting the table therein and substituting therefor the following
table:

          Public Debt Rating   Applicable S&P/Moody’s   Utilization Fee
Level 1
       
BBB+ or Baa1 or above
    0.100 %
Level 2
       
BBB or Baa2
    0.100 %
Level 3
       
BBB- or Baa3
    0.100 %
Level 4
       
BB+ or Ba1
    0.100 %
Level 5
       
Lower than Level 4
    0.100 %

          (d) The definition of “Loan Documents” in Section 1.01 is replaced in
its entirety with the following:
“Loan Documents” means this Agreement, the Notes and the other L/C Related
Documents.

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          (e) The definition of “Loan Parties” in Section 1.01 is replaced in
its entirety with the following:
“Loan Parties” means the Company and each other Borrower.
          (f) The definition of “Public Debt Rating” in Section 1.01 is amended
by deleting subsection (e) thereof and substituting therefor the following
subsection (e):
          (e) if the ratings established by S&P and Moody’s shall fall within
different levels, the Applicable Margin, the Applicable Facility Fee Rate and
the Applicable Utilization Fee shall be based upon the higher rating, unless the
lower of such ratings is more than one level below the higher of such ratings,
in which case the Applicable Margin, the Applicable Facility Fee Rate and the
Applicable Utilization Fee shall be based upon the level that is one level above
the lower of such ratings.
          (g) The definition of “Termination Date” in Section 1.01 is amended by
deleting the date “August 24, 2009” and substituting therefor the date
“September 20, 2011”.
          (h) Section 4.01(e) is amended by (i) deleting all references to the
date “December 31, 2003” and substituting therefor the date “December 31, 2005”,
and (ii) deleting all references to the date “March 31, 2004” and substituting
therefor the date “June 30, 2006”.
          (i) Section 4.01 is amended by deleting subsection (f) thereof and
substituting therefor the following subsection (f):
          (f) [Reserved.]
          (j) Section 5.01 is amended by deleting subsection (i) thereof and
substituting therefor the following subsection (i):
          (i) [Reserved.]
          (k) Section 5.02(b) is amended by (i) adding the word “and” at the end
of clause (i), (ii) deleting clauses (ii), (iii) and (iv) thereof, and
substituting therefor the following clause (ii):
(ii) a directly or indirectly wholly owned Subsidiary of the Company (or any
Subsidiary of such Subsidiary) may (x) merge with or into or consolidate with or
into any other wholly owned Subsidiary of the Company (or any Subsidiary of such
Subsidiary), or (y) may merge with the Company, provided that the Company shall
be the surviving corporation.
and (iii) by deleting the phrase “clauses (i), (ii) and (iii)” in the last
proviso, and substituting therefor the phrase “clauses (i) and (ii)(x)”.
          (l) Section 5.02(c) is amended by deleting clause (iii) thereof and
substituting therefor the following clause (iii):

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(iii) sales, leases, transfers and other dispositions of assets (other than
Foreign Assets) by any Subsidiary of the Company to the Company or any of its
Subsidiaries,
          (m) Section 5.02 is amended by deleting subsection (d) thereof and
substituting therefor the following subsection (d):
          (d) [Reserved.]
          (n) Section 6.01 is amended by (i) deleting the word “; or” from the
end of subsection (h) thereof, and (ii) deleting subsection (i) thereof in its
entirety.
          (o) Section 8.03 is amended by adding at the end thereof the
following:
In the event that CNAI or any of its Affiliates shall be or become an indenture
trustee under the Trust Indenture Act of 1939 (as amended, the “Trust Indenture
Act”) in respect of any securities issued or guaranteed by the Company, the
parties hereto acknowledge and agree that any payment or property received in
satisfaction of or in respect of any obligation of the Company hereunder or
under any other Loan Document by or on behalf of CNAI in its capacity as the
Agent for the benefit of any Lender under this Agreement or any Note (other than
CNAI or an Affiliate of CNAI) and which is applied in accordance with this
Agreement shall be deemed to be exempt from the requirements of Section 311 of
the Trust Indenture Act pursuant to Section 311(b)(3) of the Trust Indenture
Act.
          (p) Section 9.01(g) is amended by deleting subsection (g) thereof and
substituting therefor the following subsection (g):
          (g) [Reserved],
          (q) Section 9.05 is amended by deleting the phrase “Upon (i) the
occurrence and during the continuance of any Event of Default and”, and
substituting therefor the following phrase:
Upon either (a) the occurrence and during the continuance of any Event of
Default under Section 6.01(a) or 6.01(e) or (b) (i) the occurrence and during
the continuance of any other Event of Default and
          (r) Schedule I thereto is replaced in its entirety by Schedule I to
this Amendment.
          SECTION 2. Conditions of Effectiveness. This Amendment shall become
effective as of the date first above written when, and only when the Agent shall
have received payment of the fees set out in that certain Fee Letter dated
September 20, 2006 between the Borrower and the Agent, and shall have received
counterparts of this Amendment executed by the Company and all of the Lenders
or, as to any of the Lenders, advice satisfactory to the Agent that such Lender
has executed this Amendment and shall have additionally received all of the
following documents, each such document (unless otherwise specified) dated the
date of receipt

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thereof by the Agent (unless otherwise specified) and in sufficient copies for
each Lender, in form and substance satisfactory to the Agent (unless otherwise
specified) and in sufficient copies for each Lender:
          (a) Certified copies of the resolutions of the Board of Directors of
the Company approving this Amendment and the matters contemplated hereby and
thereby and of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Amendment and the matters
contemplated hereby.
          (b) A certificate of the Secretary or an Assistant Secretary of the
Company certifying the names and true signatures of the officers of the Company
authorized to sign this Amendment and the other documents to be delivered
hereunder.
          (c) A favorable opinion of the Vice President and General Counsel of
the Company, with respect to this Amendment and the Credit Agreement as amended
hereby, in substantially the form of Exhibit A to this Amendment.
          (d) A favorable opinion of Shearman & Sterling LLP, counsel for the
Agent, in form and substance satisfactory to the Agent.
          (e) A certificate signed by a duly authorized officer of the Company
stating that (and the Company hereby represents and warrants that):
     (i) The representations and warranties contained in Section 4 of this
Amendment and in Section 4.01 of the Credit Agreement, as amended hereby, are
correct on and as of the date of such certificate as though made on and as of
such date; and
     (ii) No event has occurred and is continuing that constitutes a Default.
          This Amendment is subject to the provisions of Section 9.01 of the
Credit Agreement.
          SECTION 3. Termination of Subsidiary Guaranty and Release of the
Subsidiary Guarantors. The Subsidiary Guaranty is hereby terminated and of no
further force and effect. Each of the Subsidiary Guarantors is hereby released
and forever discharged from any and all liabilities or obligations of any kind
whatsoever relating to or arising out of or in connection with the Subsidiary
Guaranty.
          SECTION 4. Representations and Warranties of the Company. The Company
represents and warrants as follows:
          (a) The execution, delivery and performance by the Company of this
Amendment and each of the Loan Documents to which it is a party, as amended
hereby, and the consummation of the transactions contemplated hereby, are within
the Company’s corporate or other powers, have been duly authorized by all
necessary corporate or other action, and do not contravene (i) the Company’s
charter or code of regulations or comparable organizational documents or
(ii) any applicable law or any contractual restriction in any material contract
or, to

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the knowledge of the chief financial officer of the Company, any other contract
the breach of which would limit the ability of the Company to perform its
obligations under this Amendment or any other Loan Document, binding on or
affecting the Company.
          (b) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other third
party is required for the due execution, delivery and performance by the Company
of this Amendment or any other Loan Document, as amended hereby, to which it is
a party and to be delivered by it or for the consummation of the transactions
contemplated hereby, other than authorizations, approvals, actions, notices or
filings (i) that have been duly obtained, taken, given or made and are in full
force and effect or (ii) as to which the failure to obtain, take, give or make
would not reasonably be likely to result in a Material Adverse Effect.
          (c) This Amendment has been duly executed and delivered by the
Company. This Amendment and each of the other Loan Documents, as amended hereby,
are the legal, valid and binding obligations of the Company enforceable against
it in accordance with their respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors’
rights and by equitable principles (regardless of whether enforcement is sought
in equity or law).
          (d) There is no pending or, to the Company’s knowledge, threatened
action, suit, investigation, litigation or proceeding, including, without
limitation, any Environmental Action, affecting the Company or any of its
Subsidiaries before any court, governmental agency or arbitrator that (i) would
be reasonably likely to have a Material Adverse Effect (other than the Disclosed
Litigation), or (ii) purports to affect the legality, validity or enforceability
of this Amendment, as amended hereby, or the consummation of the transactions
contemplated hereby.
          SECTION 5. Reference to and Effect on the Credit Agreement and the
Notes. (a) On and after the effectiveness of this Amendment, each reference in
the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like
import referring to the Credit Agreement, and each reference in the Notes and
the other Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or
words of like import referring to the Credit Agreement, shall mean and be a
reference to the Credit Agreement, as amended by this Amendment.
          (a) The Credit Agreement, the Notes and each other Loan Document, as
specifically amended by this Amendment, are and shall continue to be in full
force and effect and are hereby in all respects ratified and confirmed.
          (b) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Lender or the Agent under the Credit Agreement, nor,
except as expressly provided herein, constitute a waiver of any provision of the
Credit Agreement.
          SECTION 6. Costs and Expenses. The Company agrees to pay on demand all
costs and expenses of the Agent in connection with the preparation, execution,
delivery and administration, modification and amendment of this Amendment and
the other instruments and

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documents to be delivered hereunder (including, without limitation, the
reasonable fees and expenses of counsel for the Agent) in accordance with the
terms of Section 9.04 of the Credit Agreement or as otherwise agreed by the
Agent and the Company.
          SECTION 7. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Amendment by
telecopier shall be effective as delivery of a manually executed counterpart of
this Amendment.
          SECTION 8. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.

            THE LUBRIZOL CORPORATION
      By:   /s/ Charles P. Cooley         Title:   Senior Vice President and
Chief Financial Officer                By:   /s/ Joanne Wanstreet         Title:
Vice President                CITICORP NORTH AMERICA, INC., as Agent and as
Lender
      By:    /s/ Anish M. Shah       Title: Vice President  

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            [Lender]
as Lender        By:           Title:   

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