Xx. Xxxxxx X. Xxxxxx
Signal Technology Corporation
000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Re: Waiver of Financial Covenants for Signal Technology Corporation for
Fourth Quarter of Fiscal Year 2001
Dear Xx. Xxxxxx:
Reference is made to that certain Third Amended and Restated Credit
Agreement dated as of February 27, 2001, by and between Signal Technology
Corporation, as borrower (the "Borrower", "you" or "your"), and Fleet National
Bank, as lender (the "Lender"), as modified by that certain Agreement and
Waiver dated as of November 14, 2001, by and between the Borrower and the
Lender (as so modified, the "Credit Agreement"). Capitalized terms defined in
the Credit Agreement and not otherwise defined herein are used herein as
therein defined.
You have informed the Lender that the Borrower has not complied, for the
fiscal quarter ended December 31, 2001, with (i) the minimum ratio of Funded
Debt to EBITDA required pursuant to Section 6.1 of the Credit Agreement, (ii)
the minimum ratio of Operating Cash Flow to Total Debt Service required
pursuant to Section 6.2 of the Credit Agreement and (iii) the minimum EBITDA
required pursuant to subsection (a) of Section 6.3 of the Credit Agreement, and
you have requested that the Lender agree to waive these financial requirements
with respect to such fiscal year.
Provided no Default, other than the failure to comply with the
aforementioned financial requirements, shall have occurred and be continuing on
the date hereof, the Lender hereby waives such financial requirements for the
fiscal quarter ended December 31, 2001.
The Borrower hereby represents that no Default, other than failure to
comply with the financial requirements set forth above for the fiscal quarter
ended December 31, 2001, has occurred and is continuing on the date hereof and
ratifies and confirms the Credit Agreement, which shall continue in full force
and effect.
The foregoing waiver is limited as provided herein and does not extend to
any other provisions of the Credit Agreement not specified herein (including,
but not limited to, any other financial covenants or any financial covenants
covering fiscal quarters ending other than December 31, 2001) nor to any other
matter other than as described above. This letter agreement may be executed in
any number of counterparts with the same effect as if the signatures hereto and
thereto were upon the same instrument.
Please indicate your agreement with the foregoing by executing in the
space provided below.
FLEET NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
SIGNAL TECHNOLOGY CORPORATION
By: /s/ Xxxxxx X. Xxxxxx 3/20/02
-------------------------
Name: Xxxxxx X. Xxxxxx
Title: CFO
