EXHIBIT 10(r)
WAIVER OF BREACH OF COVENANT
This Waiver relates to a credit facility pursuant to a Credit Agreement
dated as of March 31, 1995 (as amended to date, the "Credit Agreement")
between Nuclear Metals, Inc., a Massachusetts corporation ("Nuclear Metals"),
Carolina Metals, Inc., a Delaware corporation ("Carolina Metals" and together
with Nuclear Metals, the "Borrowers"), and State Street Bank and Trust
Company, a Massachusetts company (the "Bank").
WHEREAS, lack of business at Carolina Metals's South Carolina facility
is expected to result in losses for the current fiscal year, and
WHEREAS, the Borrower's auditors have advised that, under the
circumstances, such losses should be recognized in the fiscal year ended
September 30, 1996 (the "Write-off"), and
WHEREAS, certain reserves in the approximate amount of $3.3 million have
been reclassified from long term reserves to inventory reserves (the
"Reclassification"), and
WHEREAS, the Write-off and the Reclassification will result in Borrowers
being out of compliance with the covenants in the Credit Agreement; and
WHEREAS, the Bank is willing to waive such noncompliance to the extent
that it is attributable to the Write-off and the Reclassification, and
WHEREAS, the Borrowers and the Bank intend to continue the relationship
existing under the Credit Agreement,
NOW, THEREFORE, the parties agree as follows:
1. The Bank hereby waives any failure to comply with covenants which
results from the Write-off and the Reclassification, as of September 30, 1996
and subsequently, and agrees, until the parties agree to new covenants as set
forth herein, compliance will be measured assuming that the Write-off and the
Reclassification had not occurred.
2. The Bank and the Borrowers will agree upon revised covenants
consistent with the Company's business plans and such that the Company's
anticipated performance will allow it to remain in compliance at such time as
Borrowers have prepared and delivered a business plan to the Bank and the
Bank has had the opportunity to review it.
3. Except as set forth herein, the Credit Agreement, as amended to
date, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have signed below:
NUCLEAR METALS, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------
CAROLINA METALS, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxx, XX
--------------------------
Xxxxxxx X. Xxxxx, XX
