WAIVER AND AMENDMENT NO. 4
to the
CREDIT AGREEMENT
This WAIVER and AMENDMENT NO. 4 dated as of August 13, 1996 (this "Waiver
and Amendment") 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.
In consideration of the mutual covenants contained herein, and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:
Section 1. Waiver. The Bank confirms waiver of the Event of Default that has
resulted from non-compliance with Subsection 6.01(m) of the Agreement. This
waiver is effective as of June 30, 1996; provided, however, that such waiver is
effective only for the period ending June 30, 1996.
Section 2. Amendment of Section 1.01 of Agreement. The definition of "DSCR
Measurement Period" is hereby amended to read as follows:
"DSCR Measurement Period" - (i) The three-fiscal-quarter period
ending September 30, 1996, (ii) the fiscal year ending December 31,
1996 and (iii) thereafter, at the end of each fiscal quarter
commencing with the fiscal quarter ending March 31, 1997, the most
recent four-fiscal-quarter period.
Section 3. Amendment of Subsection 6.01(k) of the Agreement. Subsection
6.01(k) of the Agreement is hereby amended to read as follows:
(k) the Company will maintain minimum Consolidated Capital Base
as follows:
Quarter Ending Amount
-------------- ------
March 31, 1996 $9,625,000
June 30, 1996 9,668,000
September 30, 1996 9,500,000
December 31, 1996 9,783,000
Section 4. Amendment of Subsection 6.01(m) of the Agreement. Subsection
6.01(m) of the Agreement is hereby amended to read as follows:
(m) The Company will have a maximum net loss (calculated in the
manner of Consolidated Net Income) from operations for each period
commencing July 1, 1996 and ending on the dates shown below as follows:
Period Ending Maximum Net Loss
------------- ----------------
September 30, 1996 $400,000
December 31, 1996 500,000
Section 5. Amendment of Subsection 6.01(n) of the Agreement. Subsection
6.01(n) of the Agreement is hereby amended to read as follows:
(n) The Company will maintain (i) for the DSCR Measurement
Period ending September 30, 1996 a Consolidated Debt Service Coverage
Ratio of not less than 0.70 to 1.0, (ii) for the DSCR Measurement
Period ending December 31, 1996 a Consolidated Debt Service Coverage
Ratio of not less than 0.75 to 1.0 and (iii) for each DSCR Measurement
Period thereafter a Consolidated Debt Service Coverage Ratio of not less
than 1.2 to 1.0.
Section 6. 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
attorneys' fees, for this Waiver and Amendment No. 4 to the Credit Agreement.
Section 7. Representations and Warranties. The Company represents and
warrants to the Bank as of the effective date of this Waiver and Amendment that
(a) other than the Event of Default described in Section 1 hereof, no Default or
event of Default has occurred and is continuing or results from the execution
and delivery of this Waiver and Amendment, (b) each of the representations and
warranties of the Company in the Agreement shall be true and correct on the
effective date of this Waiver and Amendment, (c) the liens granted pursuant to
the Security Agreement are valid and (d) this Waiver and Amendment is a legal,
valid and binding agreement of the Company enforceable against the Company in
accordance with its terms.
Section 8. Other Provisions Still Effective; No Waiver. 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 may exist under the Agreement other than
those described in Section 1 hereof.
Section 9. Counterparts. This Waiver and Amendment may be executed in
counterparts each of which shall constitute an original but all of which, when
taken together, shall constitute but one instrument.
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Section 10. Effective Date. This Waiver and Amendment shall become
effective, when signed by all the parties hereto, on the date first above
written.
IN WITNESS WHEROF, the parties hereto have caused this Waiver
and Amendment to be duly executed by their respective authorized officers, and
the Company has caused its seal to be hereunto affixed and attested by its duly
authorized officer, all as of the day and year first above written.
[SEAL] STOCKER & YALE INC.
By /s/ Susan Sundell
---------------------------------
ATTEST Its Senior Vice President and Treasurer
By /s/ James Buckman
-------------------------
Its President FLEET NATIONAL BANK
By /s/ Richard F. Sullivan
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Its Vice President
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