FLEET

12 NOVEMBER, 1997

MS. SUSAN SUNDELL
SENIOR VICE PRESIDENT
STOCKER & YALE, INC.
32 HAMPSHIRE ROAD
SALEM, NH 03079

DEAR MS. SUNDELL:

Reference is made to the CREDIT AGREEMENT dated as of March 6, 1995 (as
amended, the "Agreement") between Stocker & Yale, Inc., a Massachusetts
corporation (the "Company"), and Fleet National Bank, successor by 
merger to Fleet National Bank of Massachusetts, formerly known as Shawmut
Bank, N.A. (the "Bank").  All capitalized terms used and not defined
herein shall have the meanings ascribed to such terms in the Agreement.

Section 1.  Waiver - The Bank confirms waiver of the Event of Default that
has resulted from non-compliance with Subsections 6.01(m) and 6.01(n) of the
Agreement.  This waiver is effective as of September 30, 1997; provided
however, that such waiver is effective only for the period ended September
30, 1997.

Section 2. Amendment of Subsection 6.01 (p) of the Agreement - Subsection
6.01 (p) of the Agreement is hereby amended to read as follows:

     (p)  The Company and its Subsidiaries will not make Consolidated Capital
          Expenditures aggregating in excess of $500,000 during any fiscal
          year; provided, however, that Consolidated Capital Expenditures
          may not aggregate in excess of $1,500,000 for the fiscal year
          ended December 31, 1997.

Section 3. Payment for Waiver and Amendment - The Company agrees to pay to
the Bank a fee of $5,000 plus expenses; including but not limited to 
reasonable attorney's fees, for this Waiver and Amendment.

Except as amended by this Waiver and Amendment, all other provisions, terms
and conditions of the Agreement shall continue to be effective.  This 
Waiver and Amendment shall not be deemed a waiver of any defaults that 
exist under the Agreement other than those described in Section 1 hereof.

Very truly yours,

FLEET NATIONAL BANK

By:  /s/ H. Ellery Perkinson
     -----------------------
Its:     Assistant Vice President

Agreed:

STOCKER & YALE, INC.

By:  /s/ Susan A. H. Sundell
     -----------------------
Its:  Senior Vice President-Finance, Treasurer