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November 19, 1993
The Lincoln Electric Company
22801 St. Clair Avenue
Cleveland, Ohio 44117
Attention: Chief Financial Officer
Ladies and Gentlemen:
Reference is made to that certain Note Agreement dated November 20, 1991 (as
amended from time to time, the "Note Agreement") between The Lincoln Electric
Company, an Ohio corporation (the "Company"), and The Prudential Insurance
Company of America ("Prudential"), pursuant to which the Company issued and
sold and Prudential purchased the Company's 8.73% senior note in the original
principal amount of $75,000,000, due November 26, 2003. Unless otherwise
defined herein, capitalized terms used herein shall have the meanings assigned
to such terms in the Note Agreement.
The Company has advised Prudential that it proposes to enter into an amendment,
dated as of the date hereof (the "Bank Amendment"), to that certain Credit
Agreement dated as of March 18, 1993 (the "Credit Agreement") among the
Company, the banks listed therein (the "Banks") and Society National Bank, as
agent (the "Agent"). In order to satisfy a condition to closing under the Bank
Amendment and the requirements of the Note Agreement, the Company desires to
modify the terms of the Note Agreement in accordance with this letter. A copy
of the Bank Amendment is attached hereto as EXHIBIT E.
Pursuant to the request of the Company and in accordance with the provisions of
paragraph 11C of the Note Agreement, Prudential and the Company hereby agree as
follows:
SECTION 1. AMENDMENT. From and after the date this letter becomes
effective in accordance with its terms, the Note Agreement is amended as
follows:
1.1 REFERENCES TO BANK AGREEMENT AND CREDIT AGREEMENT. Paragraph 10B of
the Note Agreement is amended to delete the defined term "Credit Agreement"
appearing therein and to add thereto the following definition in alphabetical
order:
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The Lincoln Electric Company
November 19, 1993
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"BANK AGREEMENT" and "CREDIT AGREEMENT" shall mean and refer to that
certain Credit Agreement dated as of March 18, 1993 among the Company, the
banks listed therein and Society National Bank, as agent, as modified by the
amendment thereto dated as of November 19, 1993, a copy of which is attached
hereto as EXHIBIT E."
1.2 NEW EXHIBIT E. The Note Agreement is hereby amended to attach
thereto as EXHIBIT E, the Bank Amendment attached hereto as EXHIBIT E.
SECTION 2. LIMITED WAIVER. Prudential hereby waives any Default or Event
of Default arising by reason of the "Restructuring" (as defined in the Bank
Amendment) under (i) Section 5.15(b) of the Credit Agreement with respect to
the Company, (ii) any of Sections 5.02, 5.03, 5.05, 5.14 and 5.15(c) of the
Credit Agreement solely with respect to a "Restructuring Subsidiary" (as
defined in the Bank Amendment) and (iii) any of clauses (vi), (vii), (viii),
(ix) and (x) of paragraph 7A of the Note Agreement solely with respect to a
Restructuring Subsidiary.
SECTION 3. EFFECT OF CHANGES TO CREDIT AGREEMENT. All references herein
to sections of the Credit Agreement and the Company's compliance with the terms
thereof as required hereunder shall be based upon the Credit Agreement as in
effect on March 18, 1993, as modified by the Bank Amendment, without giving
effect to any other amendment, waiver or other modification of the Credit
Agreement unless the Company shall have obtained the written consent of the
Required Holder(s) to any such amendment, waiver or modification. No
termination of the Credit Agreement in whole or in part shall affect the
continued applicability of the sections of the Credit Agreement referred to
herein.
SECTION 4. REPRESENTATION AND WARRANTY. The Company hereby represents
and warrants that this letter and the Substitute Note are legally valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally or general
principles of equity.
SECTION 5. CONDITIONS PRECEDENT. This letter shall become effective only
on the first date on which all of the following conditions precedent shall have
been satisfied:
(i) Prudential shall have received a duly executed counterpart of this
letter signed by the Company; and
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The Lincoln Electric Company
November 19, 1993
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(ii) Prudential shall have received a fully executed copy of the Bank
Amendment.
SECTION 6. GOVERNING LAW. This letter amendment shall be governed by the
internal laws and decisions of the State of Ohio.
SECTION 7. MISCELLANEOUS. Except as specifically set forth in this
letter, the Company's obligations under the Note Agreement are neither altered
nor amended, and all terms and conditions of the Note Agreement remain in full
force and effect. Upon the effectiveness of this letter, each reference to the
Note Agreement shall mean and be a reference to the Note Agreement as amended
by this letter. This letter may be executed in any number of counterparts and
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be deemed to be an original, but all of which taken
together shall constitute one and the same agreement.
Sincerely,
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ Leonard H. Lillard IV
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Vice President
Acknowledged and Agreed:
THE LINCOLN ELECTRIC COMPANY
By: /s/ Frederick W. Mackenbach
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Its: Frederick W. Mackenbach
--------------------------
President and Chief Operating Officer
By: /s/ Ellis F. Smolik
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Its: Ellis F. Smolik
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Senior Vice President - CFO.
Secretary - Tresurer