AMENDMENT AGREEMENT NO. 6 TO SECOND AMENDED
                          AND RESTATED CREDIT AGREEMENT


         This AMENDMENT AGREEMENT NO. 6 (this "Amendment"),  dated as of October
20, 1998, by and among SIGNAL  TECHNOLOGY  CORPORATION,  a Delaware  corporation
("STC"),   SIGNAL  TECHNOLOGY  SALES  CORP.,  a  United  States  Virgin  Islands
corporation  ("Sales" and, together with STC, the "Companies"),  and BankBoston,
N.A., a national banking  association  formerly known as The First National Bank
of Boston (the "Bank"),  amends the Second Amended and Restated Credit Agreement
dated as of September 30, 1993, as amended (as the same may be further  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 is
willing to so amend the Credit Agreement;

         NOW, THEREFORE, the parties hereto hereby agree as follows:

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

                  1.1      Amendments to Certain Definitions.

                  (a) The  following  new  defined  term is hereby  inserted  in
Section 1 of the  Credit  Agreement,  immediately  preceding  the  defined  term
"Agreement":

                  "Accounts Receivable. All of the Companies' accounts, accounts
         receivable, notes, bills, drafts, acceptances,  instruments, documents,
         chattel  paper and all other  debts,  obligations  and  liabilities  in
         whatever form owing to any Company from any Person for goods sold by it
         or for services


<PAGE>


                                       -2-


         rendered  by it, or  however  otherwise  established  or  created,  all
         guarantees and security therefor,  all right, title and interest of any
         Company in the goods or  services  which gave rise  thereto,  including
         rights to  reclamation  and  stoppage  in transit  and all rights of an
         unpaid seller of goods or services; whether any of the foregoing be now
         existing or hereafter arising, now or hereafter received by or owing or
         belonging to any Company.

                  (b) The  following  new  defined  term is hereby  inserted  in
Section 1 of the  Credit  Agreement,  immediately  following  the  defined  term
"Benecia":

                  "Borrowing  Base.  An amount equal to 80% of the unpaid amount
         of all Eligible Accounts of the Companies."

                  (c) The  following  new  defined  term is hereby  inserted  in
Section 1 of the  Credit  Agreement,  immediately  following  the  defined  term
"Borrowing Base":

                  "Borrowing  Base  Report.   A  report  signed  by  either  the
         President or Chief Financial  Officer of STC in substantially  the form
         of Exhibit E hereto."

                  (d) The  following  new  defined  term is hereby  inserted  in
Section 1 of the  Credit  Agreement,  immediately  following  the  defined  term
"Consolidated Tangible Net Worth":

                  "Contra  Customer.  Any customer or other Person with whom STC
         or Sales has a contract or agreement of any kind  (including an account
         payable) and in respect of whom there is an Account Receivable included
         in Eligible Accounts."

                  (e) The  following  new  defined  term is hereby  inserted  in
Section 1 of the  Credit  Agreement,  immediately  following  the  defined  term
"Effective Date":

                  "Eligible Accounts. An Account Receivable which:

                           (a) is not  unpaid  more than 90 days  after  invoice
date;


<PAGE>


                                       -3-


                           (b) arose in the  ordinary  course of  business  as a
result of services  which have been performed for the account debtor or the sale
of goods which have been shipped to the account debtor;

                           (c) is the legal, valid and binding obligation of the
account  debtor  thereunder,  is  assignable,  is owned  free  and  clear of all
encumbrances  (except in favor of the Bank) and is not evidenced by a promissory
note or other instrument;

                           (d)  has  not  been  reduced  and is not  subject  to
reduction,  as against STC or Sales, their respective agents or the Bank, by any
offset, counterclaim,  adjustment, credit, allowance or other defense, and as to
which there is no (and no basis for any) return, rejection, loss or damage of or
to the goods giving rise thereto, or any request for credit or adjustments;

                           (e) is not difficult to collect or uncollectible  for
any reason, including, without limitation, return, rejection, repossession, loss
of or damage to the  merchandise  giving rise thereto,  a  merchandise  or other
dispute,  any bankruptcy,  insolvency,  adverse credit rating or other financial
difficulty of the account debtor,  or any impediment to the assertion of a claim
or  commencement  of an  action  against  the  account  debtor  (including  as a
consequence  of a failure of STC or Sales to be  qualified  or  licensed  in any
jurisdiction  where  such  qualification  or  licensing  is  required),  all  as
reasonably determined by the Bank in its sole discretion;

                           (f) is not owing from any affiliate of STC or Sales;

                           (g) is owing  from an account  debtor  located in the
United States;

                           (h) is owing from an  account  debtor at least 70% of
whose accounts payable owing to STC or Sales are Eligible Accounts;

                           (i) if  owing  from  any  Contra  Customer,  will  be
eligible  only to the extent it exceeds  the amount of STC's or Sales'  accounts
payable to such Contra Customer; and


<PAGE>


                                       -4-


                           (j)  has  not  been  designated  by the  Bank  in its
reasonable judgment by notice to STC as unacceptable for any reason."

                  (f) The  following  new  defined  term is hereby  inserted  in
Section 1 of the  Credit  Agreement,  immediately  following  the  defined  term
"Environmental Laws":

                  "Equipment. All machinery,  equipment and fixtures, furniture,
         furnishings,  trade fixtures, specialty tools and parts, motor vehicles
         and materials handling equipment of any of the Companies, together with
         such Company's interest in, and right to, any and all manuals, computer
         programs, data bases and other materials relating to the use, operation
         or  structure  of  any  of  the  foregoing;   and  all  other  property
         constituting  "equipment"  as  such  term  is  defined  in the  Uniform
         Commercial Code."

                  (g) The  following  new  defined  term is hereby  inserted  in
Section 1 of the  Credit  Agreement,  immediately  following  the  defined  term
"Interest Period":

                  "Inventory. All goods, merchandise and other personal property
         (including  warehouse  receipts and other negotiable and non-negotiable
         documents of title  covering any such  property) of the Companies  that
         are held for sale, lease or other  disposition,  or are to be furnished
         under contracts of service, or for display or demonstration,  or leased
         or consigned, or that are raw materials, piece goods,  work-in-process,
         finished goods or supplies or other materials used or consumed or to be
         used or consumed in such Company's  business,  whether in transit or in
         the possession of such Company or another, including without limitation
         all goods covered by purchase  orders and contracts  with suppliers and
         all  goods  billed  and held by  suppliers  and  goods  located  on the
         premises of any carriers,  forwarding agents,  truckers,  warehousemen,
         vendors, selling agents or other third parties; all proprietary rights,
         patents, plans, drawings,  diagrams,  schematics,  assembly and display
         materials  relating  to any of the  foregoing;  and all other  property
         constituting  "inventory"  as  such  term  is  defined  in the  Uniform
         Commercial Code.


<PAGE>


                                       -5-


                  (h) The definition of the term "Secured Obligations" is hereby
amended to read as follows:

                  "Secured Obligations. The Obligations."

                  (i) The  following  new  defined  term is hereby  inserted  in
Section 1 of the  Credit  Agreement,  immediately  following  the  defined  term
"Secured Obligations":

                  "Security  Agreement.  The  Security  Agreement,  dated  as of
         October 20, 1998 by and among the Companies and the Bank."

                  1.2  Amendment  of  Section  2.1.  Section  2.1 of the  Credit
Agreement is hereby amended to read in its entirety as follows:

                  "ss.  2.1  Commitment  to  Lend.  Subject  to  the  terms  and
         conditions  hereinafter  set  forth,  the  Bank  agrees  to lend to the
         Companies,  on a joint and several basis,  during the period commencing
         on the Effective date and ending on the Revolving Credit Maturity Date,
         upon notice by the  Companies  pursuant to ss. 2.4 from time to time an
         amount (a  "Revolving  Credit  Loan",  or if more than one,  "Revolving
         Credit Loans") equal to the aggregate principal amount of the Revolving
         Credit Loan  requested by the  Companies  in such  notice,  for working
         capital and general  corporate  purposes as  permitted  pursuant to the
         provisions of this  Agreement,  provided that in no event shall the sum
         of (a) the  aggregate  outstanding  principal  balance of all Revolving
         Credit Loans (after giving effect to all amounts  requested),  plus (b)
         the aggregate  Maximum Drawing Amount of Letters of Credit  outstanding
         (collectively the "Total Credit Extended"),  exceed at any one time the
         lesser  of (i) the  Revolving  Credit  Commitment  Amount  and (ii) the
         Borrowing Base."

                  1.3  Amendment  of  Section  2.6.  Section  2.6 of the  Credit
Agreement is hereby amended by deleting the second  sentence of said Section 2.6
and replacing said second sentence of Section 2.6 with the following:

                  "If at any time,  for any reason,  the Total  Credit  Extended
         exceeds the lesser of (i) the Borrowing Base


<PAGE>


                                       -6-

         and (ii) the Revolving  Credit  Commitment  Amount,  then the Companies
         jointly and severally shall  immediately pay cash in the amount of such
         excess to the Bank for  application  first to pay down the principal of
         Revolving  Credit  Loans  and  then  to be  held  by the  Bank  as cash
         collateral for the Obligations."

                  1.4 Amendment of Section 2.8.  Sections  2.8(a) and (b) of the
Credit Agreement are hereby amended to read in their entirety as follows:

                  "(a)  Except as provided  in ss. 5.1  hereof,  each  Revolving
         Credit  Loan that is a Base Rate Loan shall bear  interest  at the rate
         per annum equal to the Base Rate plus 0.50% per annum.

                  (b) Except as  provided  in ss.  5.1  hereof,  each  Revolving
         Credit Loan that is a 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 with respect  thereto at the rate per annum
         equal to the Eurodollar  Rate  determined for such Interest Period plus
         2.25% per annum."

                  1.5  Amendment  of  Section  3.3.  Section  3.3 of the  Credit
Agreement is hereby amended to read in its entirety as follows:

                  "ss. 3.3  Interest on Real Estate Term Loans.

                           (a) Unless and until  converted  to a different  Type
         pursuant  to ss.  3.4,  the Real  Estate  Term Loans shall be Base Rate
         Loans.

                           (b) Except as provided in ss. 5.1 hereof, any portion
         of the Real  Estate  Term  Loans  that is a Base Rate Loan  shall  bear
         interest at the Base Rate plus 0.50% per annum.

                           (c) Except as provided in ss. 5.1 hereof, any portion
         of the Real Estate Term Loans that is a Eurodollar Rate Loan shall bear
         interest  for each  Term  Loan  Interest  Period at the rate of two and
         one-quarter  percent  (2.25%)  per  annum  above  the  Eurodollar  Rate
         determined for each such Term Loan Interest Period.


<PAGE>


                                       -7-


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

         1.6  Amendment of Section 4.1.  Section 4.1 of the Credit  Agreement is
hereby  amended by deleting the first sentence of said Section 4.1 and replacing
said first sentence of Section 4.1 with the following:

         "Subject to the terms and  conditions  set forth in this Agreement upon
     written request from STC, as provided  below,  the Bank may, at its option,
     and without any  obligation or commitment to do so, at any time  thereafter
     but prior to the  Revolving  Credit  Maturity  Date issue letters of credit
     ("Letters  of Credit") in such form as STC and the Bank may agree,  for the
     account of any of the Companies,  provided,  however, that the Total Credit
     Extended  shall not at any time exceed the lesser of (i) the Borrowing Base
     and (ii) the Revolving Credit  Commitment  Amount,  and provided,  further,
     that the Maximum Drawing Amount of all Letters of Credit  outstanding shall
     not at any time exceed Three Million Dollars ($3,000,000) ."

         1.7  Amendment of Section 6.1.  Section 6.1 of the Credit  Agreement is
hereby amended by deleting the term "one-eighth of one percent (1/8%) per annum"
in the first line of  subparagraph  (b) of said Section 6.1. and  inserting  the
phrase "three-eighths of one percent (3/8%) per annum" immediately following the
term "(b)" in the first line of subparagraph (b) of said Section 6.1.

         1.8 Amendment of Section 7. Section 7 of the Credit Agreement is hereby
amended to read in its entirety as follows:

         "ss.  7.  SECURITY.   (a)  The  Companies   confirm  that  the  Secured
Obligations  are  entitled  to the  benefits  of and shall be secured by a first
priority  perfected security interest (subject only to such prior liens as shall
be acceptable to the Bank) on all of the real estate of the Companies covered by
the Mortgages and by a first priority  perfected  security  interest (subject to
such prior liens as shall be acceptable to the Bank) on all of


<PAGE>


                                       -8-


the Accounts Receivable, Inventory and Equipment of the Companies.

                  (b) The Attornment Agreements, the Mortgages from time to time
delivered,  the Security  Agreement and any other instruments and documents from
time to time delivered  pursuant hereto or thereto,  or in furtherance hereof or
thereof,  in each case  secured or  providing  credit  support  for the  Secured
Obligations and in each case as amended, modified,  supplemented or restated and
in  effect  from  time to time,  are  collectively  referred  to  herein  as the
"Security Documents"."

         1.9 Amendment of Section 11.4.  Section 11.4 of the Credit Agreement is
hereby  amended by deleting  subparagraph  (g) of said Section 4.1 and replacing
said subparagraph (g) of Section 4.1 with the following:

                  "(g) as soon as  available,  but in any  event  within 15 days
         after the end of each month,  a Borrowing  Base Report,  together  with
         such other information  regarding  Accounts  Receivable as the Bank may
         require; and

                  (h)  with   reasonable   promptness   such   other   financial
         information  as the Bank may  reasonably  request and the disclosure of
         which is not prohibited by law."

         1.10 Amendment of Section 12.4. Section 12.4 of the Credit Agreement is
hereby amended to read in its entirety as follows:

                  "ss.  12.4.  Distributions.   Make  any  Distributions  except
         Distributions by any direct or indirect Subsidiary of STC to STC or any
         other direct or indirect Subsidiary of STC."

         1.11 Amendment of Section 12.7. Section 12.7 of the Credit Agreement is
hereby amended to read in its entirety as follows:

                  "ss. 12.7 Net Worth. Permit at any time Consolidated  Tangible
         Net Worth to be less than the  amount  equal to the sum of  $23,000,000
         plus, on a cumulative  basis,  50% of positive  Consolidated Net Income
         for each fiscal quarter ending after September 30, 1998."


<PAGE>


                                       -9-


         1.12  Amendment  of Section 15.  Section 15 of the Credit  Agreement is
hereby amended by (a) deleting the word "or" at the end of  subparagraph  (i) of
said Section 15 and (b) inserting the following language  immediately  following
subparagraph (j) of said Section 15:

                  "(k) if either of the  individuals  serving as Chief Executive
         Officer and Chief Financial  Officer of STC on September 30, 1998 shall
         cease  for any  reason  (including,  without  limitation,  resignation,
         removal or death) to be executive  officers of STC at any point in time
         while any amounts with regard to Loans are outstanding."

         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
and  continued  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 Sections 8.1 and 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.

         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,


<PAGE>


                                      -10-


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;

         (b) a legal opinion  letter from the  Companies'  outside  counsel with
respect to the organization, continued existence, good standing, corporate power
and  corporate  authorization  of STC  and as to the  due  execution,  delivery,
legality,  validity, binding effect and enforceability of this Amendment and the
Credit Agreement as amended hereby;

         (c) payment of an amendment fee of $30,000;

         (d) the duly authorized and executed Security Agreement; and

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

         4.  Filing of Form  10-Q.  Not later  than by  October  31,  1998,  the
Companies shall file STC's  Quarterly  Report pursuant to Section 13 or 15(d) of
the Securities  Exchange Act of 1934, as amended,  for the period ended June 30,
1998 on Form l0-Q.  Failure of the Companies to comply with this Section 4 shall
constitute an Event of Default.

         5. Waiver of Noncompliance  with Covenants.  The Bank hereby waives the
Companies'  noncompliance  with  Sections  11.4(a),  12.7 and 12.8 of the Credit
Agreement (as in effect  immediately  prior to giving effect to this  Amendment)
for the period ended June 30, 1998.

         6. 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


<PAGE>


                                      -11-


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 Sullivan & Worcester
LLP.

         7. 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.


<PAGE>


                                      -12-


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



                                               SIGNAL TECHNOLOGY CORPORATION

                                               By: /s/ Robert Nelsen
                                                  ------------------------------
                                                  Name:   Robert Nelsen
                                                  Title:  V.P. Finance



                                               SIGNAL TECHNOLOGY SALES CORP.

                                               By: /s/ George Lombard
                                                  ------------------------------
                                                  Name:   George Lombard
                                                  Title:  Chairman, President
                                                          & CEO



                                               BANKBOSTON, N.A.

                                               By: /s/ Christopher S. Allen
                                                  ------------------------------
                                                  Name:
                                                  Title:  Director


<PAGE>


                                                                       EXHIBIT E


                          SIGNAL TECHNOLOGY CORPORATION

                              BORROWING BASE REPORT

         Period Covered: _________________________________


I.  Accounts Receivable

    1.  Balance from prior period                                   ____________

    2.  New sales                                                   ____________

    3.  Collections                                                 ____________

    4.  Ineligible:                                                 ____________

        (a) more than 90 days                ____________

        (b) Contra Customers and
            other ineligibles                ____________


                                     Total Ineligible               ____________

    5.  Eligible Accounts
        (1 + 2 - 3 - 4)                                             ____________

    6.  Borrowing Base Value
        (80% of 5)                                                  ____________

II. Availability

    1.  Borrowing Base value of Accounts                            ____________

    2.  Revolving Credit Loans Outstanding                          ____________

    3.  Maximum Drawing Amount of
        Letters of Credit                                           ____________

    4.  Total Outstandings (2 + 3)                                  ____________

    5.  Availability (lesser of 1 or
        $15 million, minus 4)                                       ____________


                                                   SIGNAL TECHNOLOGY CORPORATION

<PAGE>


                                       -2-


Date: ________________________                   By: ___________________________
                                                     Title: