362573

                  AMENDMENT AGREEMENT NO. 4 TO SECOND AMENDED
                         AND RESTATED CREDIT AGREEMENT

         This AMENDMENT  AGREEMENT NO. 4 (this  "Amendment"),  dated as of March
10, 1997, by and among SIGNAL  TECHNOLOGY  CORPORATION,  a Delaware  corporation
("STC"),  those  Subsidiaries of STC that are parties to  the  Credit  Agreement
referred to below (together with STC, the  "Companies"),  and The First National
Bank of Boston, a national banking  association (the "Bank"),  amends the Second
Amended and Restated  Credit  Agreement  dated as of September  30, 1993, as the
same may be amended,  modified,  or supplemented  from time to time (the "Credit
Agreement"), by and among the Companies and the Bank. Capitalized terms used but
not  defined  herein  shall  have the  meanings  set forth for such terms in the
Credit Agreement.

         WHEREAS,  the Companies  have  requested that the Bank agree to certain
amendments to the Credit Agreement; and

         WHEREAS,  subject  to the terms  and  provisions  hereof,  the Bank has
agreed to so amend the Credit Agreement;

         NOW THEREFORE, the parties hereto hereby agree as follows:

         ss. 1. Amendment to Credit  Agreement.  Subject to the  satisfaction of
the  conditions  precedent  set forth in ss. 3 hereof,  the Credit  Agreement is
hereby amended as follows:

         ss. 1.1. Amendments to  Certain Definitions. The definition of the term
"Revolving  Credit  Maturity  Date"  in ss. 1 of the Credit  Agreement is hereby
amended by  deleting  the date "June 30,  1997" and  replacing  it with the date
"June 30, 2000".

         ss. 1.2. Interest on Revolving Credit Loans. The text of Section 2.8 of
the Credit Agreement is hereby amended, effective as of March 10, 1997, for each
Base Rate Loan and  effective  as of the  first day of the  applicable  Interest
Period for each Eurodollar  Rate Loan with an Interest  Period  commencing on or
after March 10, 1997, to read as follows:

                  "(a) Except as provided in ss. 5.1 hereof, each Base Rate Loan
         shall bear interest at the rate per annum equal to the Base Rate.

                  (b) Except as provided in ss. 5.1 hereof, each Eurodollar Rate
         Loan shall bear  interest for the period  commencing  with the Drawdown
         Date  thereof  and  ending  on the  last  day of  the  Interest  Period
         applicable  thereto at the rate per annum equal to the Eurodollar  Rate
         determined for such Interest Period plus 1.75% per annum.

                  (c) The Companies hereby jointly and severally  promise to pay
         the interest on each Revolving  Credit Loan in arrears on each Interest
         Payment Date with respect  thereto and at the stated or any accelerated
         maturity of the Revolving Credit Loans."

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         ss. 1.3.  Repayment of Real Estate Term Loans.  The text of Section 3.3
of the Credit Agreement is hereby amended to read as follows:

                  "The Companies  jointly and  severally,  and  irrevocably  and
         unconditionally promise to repay to the Bank the Real Estate Term Loans
         in  quarterly  installments  due and  payable  on the first day of each
         January,  April,  July  and  October  of  each  year,  with  the  final
         installment due and payable in any event on June 30, 2000; each of such
         installments  shall be in the aggregate  amount of  $73,666.66,  except
         that the final  installment  shall  instead be in an  aggregate  amount
         equal to the unpaid balance of the Real Estate Term Loans."

         ss. 1.4. Interest on Real Estate Term Loans.  Section 3.4 of the Credit
Agreement is hereby  amended,  effective  as of March 10, 1997,  by deleting the
phrase "plus one percent  (1%)" from the first  sentence  thereof,  so that such
sentence ends with the words "Base Rate" followed by the period.

         ss. 1.5.  Mergers and  Acquisitions,  Etc.  Section  12.6 of the Credit
Agreement is hereby amended,  effective as of December 1, 1996, by deleting from
the final  sentence of Section  12.6 (as amended by  Amendment  Agreement  No. 3
dated as of March 29, 1996 (the "Third  Amendment") to the Credit Agreement) the
phrase "exceeding $2,000,000 in the aggregate, determined on a cumulative basis,
in any  fiscal  year"  and  inserting  in place of such  deleted  language,  and
immediately  prior to the period at the end of ss. 12.6,  the phrase  "exceeding
$2,400,000 with respect to any particular such transaction (or series of related
transactions)."

         ss. 1.6. Net Worth. The text of Section 12.7 of the Credit Agreement is
hereby amended to read as follows:

         "Permit at any time Consolidated Tangible Net Worth to be less than the
         amount equal to the sum of $30,000,000 plus, on a cumulative basis, 50%
         of  positive  Consolidated  Net Income for each fiscal year ended after
         December  31,  1996  (without  deduction  for any fiscal  year in which
         Consolidated Net Income is negative)."

         ss.  1.7.  Interest  Coverage.  The text of Section  12.8 of the Credit
Agreement is hereby amended to read as follows:

                  "Permit the ratio of (a) Consolidated  Net Earnings  Available
                  for Interest Charges for any period of four consecutive fiscal
                  quarters  (a  "Rolling  Period")  to  (b)  aggregate  Interest
                  Charges for such Rolling Period, to be less than (a) 3 to 1."

         ss. 2.  Representations and Warranties.  The Companies hereby represent
and warrant to the Bank as follows:

         (a)      Representations and Warranties in Credit Agreement.  Except as
                  specified in writing by the Companies to the Bank with respect
                  to the subject matter of this Amendment prior to the execution
                  and  delivery  hereof  by the  Bank  and  the  Companies,  the
                  representations  and warranties of the Companies  contained in
                  the Credit  Agreement  were true and  correct in all  material
                  respects when made

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                  and continue to be true and correct in all  material  respects
                  on the date  hereof,  except,  in each  case to the  extent of
                  changes resulting from transactions  contemplated or permitted
                  by  the  Loan  Documents  and  this  Amendment,   and  changes
                  occurring in the ordinary  course of business  which singly or
                  in the aggregate are not materially adverse, and to the extent
                  that such  representations  and warranties relate expressly to
                  an earlier date.

         (b)      Authority,  No Conflicts, Enforceability of Obligations,  Etc.
                  Each of the Companies hereby confirms that the representations
                  and  warranties of the Companies  contained in ss. 8.1 and ss.
                  8.3 of the Credit  Agreement are true and correct on and as of
                  the  date  hereof as if made on the date hereof, treating this
                  Amendment,  the Credit  Agreement as amended  hereby,  and the
                  other Loan Documents as amended  hereby,  as "Loan  Documents"
                  for  the   purposes   of  making  said   representations   and
                  warranties.

         ss. 3. Conditions to Effectiveness. The effectiveness of this Amendment
shall be  subject to the  delivery  to the Bank by (or on behalf of) each of the
Companies,  as the case may be,  contemporaneously with the execution hereof, of
the following, in form and substance satisfactory to the Bank:

         (a)      this  Amendment  signed by each of the Companies and the Bank;
                  and

         (b)      any other  confirmatory  or  corporate  authority  document or
                  instrument the Bank may reasonably request.

         ss.  4.  Miscellaneous   Provisions.   Except  as  otherwise  expressly
provided by this Amendment,  all of the terms,  conditions and provisions of the
Credit  Agreement  and the other Loan  Documents  shall remain in full force and
effect.  Each of the  Companies  confirms  and agrees that the joint and several
Obligations  of the Companies to the Bank, as amended and  supplemented  hereby,
are entitled to the benefits of the Loan  Documents.  The parties  hereto hereby
acknowledge  and agree  that all  references  to the  Credit  Agreement  and the
Obligations  thereunder  contained  in  any  of  the  Loan  Documents  shall  be
references to the Credit Agreement and the Obligations, as amended hereby and as
the same may be amended, modified,  supplemented, or restated from time to time.
This  Amendment  may be  executed  in any number of  counterparts,  but all such
counterparts  shall together  constitute but one instrument.  In making proof of
this Amendment it shall not be necessary to produce or account for more than one
counterpart  signed by each party hereto by and against which enforcement hereof
is sought.  The Companies hereby jointly and severally confirm their obligations
to pay promptly  upon request all  reasonable  out-of-pocket  costs and expenses
incurred or sustained by the Bank in connection with this  Amendment,  including
the reasonable fees and expenses of the Bank's Special Counsel.

         ss. 5. Governing Law.  This  Amendment shall be construed  according to
and governed by the internal laws of the Commonwealth of  Massachusetts  without
reference to principles of conflicts of law.

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        IN WITNESS WHEREOF,  the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized.

                             SIGNAL TECHNOLOGY CORPORATION,
                             and each of the other Companies that are parties to
                             the Credit Agreement

                             By: /s/ R. D. Kinsch
                                 ---------------------------------
                             Name:   R. D. Kinsch
                                   -------------------------------
                             Title:  Chief Financial Officer
                                   -------------------------------

                             THE FIRST NATIONAL BANK OF BOSTON

                             By:
                                 ---------------------------------
                             Name:
                                   -------------------------------
                             Title:
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