EXHIBIT 99.2


                       FOURTH AMENDMENT TO
             SUBSIDIARY LOAN AND SECURITY AGREEMENTS


     This FOURTH AMENDMENT TO SUBSIDIARY LOAN AND SECURITY
AGREEMENTS (this "Amendment") is entered into as of the 31st 
day of July, 1997, by and among each of the Borrowers listed 
on the signature pages hereof (each, individually, a "Borrower" 
and, collectively, the "Borrowers") and TALLEY MANUFACTURING AND
TECHNOLOGY, INC., a Delaware corporation (the "Lender").


                       W I T N E S S E T H:


     WHEREAS, each of the Borrowers has heretofore entered into a
Subsidiary Loan and Security Agreement with the Lender dated
October 22, 1993, as amended (each, individually, a "Subsidiary
Loan Agreement" and, collectively, the "Subsidiary Loan
Agreements");

     WHEREAS, the Lender has assigned all of its rights under the
Subsidiary Loan Agreements and the other Loan Documents with all of
the Borrowers to the Agent for the benefit of the lenders (the
"Parent Lenders") under the Parent Loan Agreement pursuant to the
Collateral Assignment Agreement;

     WHEREAS, the Lender, the Agent and the Parent Lenders are
about to enter into a Ninth Amendment to Loan and Security
Agreement with respect to the Parent Loan Agreement (the "Parent
Amendment") to make certain changes thereto;

     WHEREAS, the Lender and the Borrowers wish to enter into this
Amendment to make certain changes to the Subsidiary Loan Agreements
consistent with those to be made to the Parent Loan Agreement
pursuant to the Parent Amendment and the execution and delivery of
this Amendment is a condition precedent to the effectiveness of the
Parent Amendment; and

     WHEREAS, the consent of Agent is required for the execution,
delivery and performance of this Amendment with respect to the
Subsidiary Loan Agreements with all of the Borrowers.

     NOW, THEREFORE, in consideration of the premises and intending
to be legally bound hereby, the parties hereto hereby agree as
follows:

     1.   Definitions.  Capitalized terms used herein and not
defined herein shall have the respective meanings given to such
terms in the Subsidiary Loan Agreements.






<PAGE>

     2.   Amendments to Change Borrowing Base Reporting.

          2.1. The first sentence of Section 2.4 of each Subsidiary
Loan Agreement is hereby amended in its entirety to read as
follows:

     On the fifth Business Day following the end of each month,
     unless sooner requested by Lender, Borrower shall provide
     Lender with a preliminary Borrowing Base Certificate, and on
     the fifteenth day following the end of each month, Borrower
     shall provide Lender with the final version of such Borrowing
     Base Certificate, each substantially in the form attached
     hereto as Exhibit A-1 for such month; provided, however, that
     if, at any time, under Section 2.4(a) of the Parent Loan
     Agreement, the Lender is required to provide Borrowing Base
     Certificates to the Agent on a weekly basis, then, on the
     second Business Day following the end of each week, the
     Borrower shall provide Lender with a Borrowing Base
     Certificate substantially in the form attached hereto as
     Exhibit A-2 for such week.

          2.2. The list of Exhibits in each Subsidiary Loan
Agreement is hereby amended by deleting the words "EXHIBIT A     
Form of Borrowing Base Certificate" and substituting the
following words therefor:

     EXHIBIT A-1    Form of Monthly Borrowing Base Certificate

     EXHIBIT A-2    Form of Weekly Borrowing Base Certificate

          2.3. Each Subsidiary Loan Agreement is hereby amended by
deleting EXHIBIT A thereto.

          2.4. Exhibits A-1 and A-2 to each Subsidiary Loan
Agreement shall be in the forms thereof attached hereto as Exhibits
A-1 and A-2.

     3.   Amendment to Section 4.1.  The first sentence of Section
4.1 of each Subsidiary Loan Agreement is hereby amended by deleting
the words "one-half percent (.50%) per annum above" from the fourth
line thereof and substituting the words "equal to" therefor.

     4.   Amendment to Cash Dominion Procedures.  

          4.1. The following definition shall be added to Section
1.1 of each Subsidiary Loan Agreement, in appropriate alphabetical
order:

          "Blockage Notices" shall have the meaning ascribed to
     such term in Section 13.1 hereof.

                               
                               
                               
                               
                               
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          4.2. Section 13 of each Subsidiary Loan Agreement shall
be amended and restated in its entirety to read as follows:

     "13. Payments; Collection.

          13.1. Unless otherwise agreed in writing from time to
     time hereafter, all payments which Borrower is required to
     make to Lender under this Agreement or under any of the other
     Loan Documents may, at the option of the Lender, be made by
     appropriate debits to the Loan Account.  Lender may in its
     sole discretion elect to bill Borrower for such amounts in
     which case the amount shall be immediately due and payable
     with interest thereon as provided herein.  At any time after
     either (a) an Event of Default has occurred or (b) Lender
     reasonably believes or suspects that Borrower or its
     Affiliates have committed fraud or made a statement,
     representation or warranty which shall have been materially
     false or misleading when made, then Lender or its designee
     may, at any time, notify customers or Account Debtors that
     Receivables have been assigned to Lender or of its security
     interest therein, collect the same directly and charge all
     reasonable out-of-pocket collection costs and expenses to the
     Loan Account.  All proceeds of Collateral and all payments of
     money by any Person shall, at the direction of Lender, be
     deposited into a lockbox account, dominion account or such
     other "blocked account" as Lender may require pursuant to an
     arrangement with such bank as may be selected by Borrower and
     be acceptable to Agent (the "Collecting Bank").  The Borrower
     shall issue to the Collecting Banks irrevocable letters of
     instruction, in form and substance satisfactory to the Agent,
     directing the Collecting Banks, upon receipt of instructions
     ("Blockage Notices") to do so from the Agent, thenceforth to
     transfer all funds then and thereafter deposited in the
     Collecting Banks solely to the Agent, either to any account
     maintained by the Agent at the Collecting Bank or by wire
     transfer to appropriate account(s) of the Agent, and not to
     the Borrower or any Subsidiary.  All funds deposited in such
     "blocked account" shall immediately become Collateral and the
     Borrower shall use its best efforts to obtain the agreement by
     the Collecting Bank to waive any offset rights against the
     funds so deposited.  Agent assumes no responsibility for such
     "blocked account" arrangement, including without limitation,
     any claim of accord and satisfaction or release with respect
     to deposits accepted by the Collecting Bank thereunder. 
     Alternatively, upon the issuance of a Blockage Notice, Lender
     may establish depository accounts in the name of Lender at a
     bank or banks for the deposit of such funds and Borrower shall
     deposit all proceeds of Receivables, dividends and other sums 



                               
                               
                               
                               
                               
                               -3-
                               
<PAGE>                               

     paid to Borrower by the Subsidiaries or cause same to be
     deposited, in kind, in such depository accounts of Lender in
     lieu of depositing same to the blocked accounts.  Except as
     otherwise contemplated in Section 13.2 hereof, Lender will
     credit all such payments to the Loan Account, conditional upon
     final collection; credit will be given for cleared funds
     received prior to 1:00 p.m. New York City time, by Lender at
     its account at the First National Bank of Chicago (or such
     other account of Lender as it shall designate in writing to
     Borrower), two (2) Business Days after such receipt thereof
     and until receipt by Lender at such address, no credit will be
     given.  In all cases, the Loan Account will be credited only
     with the net amounts actually received by Lender.  Should any
     check or item of payment not be honored for payment, then,
     Borrower shall be deemed not to have made such payment, and
     interest shall be recalculated accordingly.

          Borrower agrees to pay to Lender any and all out-of-pocket 
     fees, costs and expenses which Lender incurs in connection with 
     opening and maintaining any "blocked account" and depositing for 
     collection by Lender any check or item of payment received and/or 
     delivered to Collecting Bank or Lender on account of the Obligations 
     and Borrower further agrees to reimburse Lender for any claims asserted 
     by the Collecting Banks in connection with Borrower's "blocked account" 
     and any amounts paid to any Collecting Banks arising out of Lender's
     indemnification of such Collecting Banks against damages incurred by 
     the Collecting Bank in the operation of such Borrower's 
     "blocked account".  Borrower further agrees that Lender shall have the
     right, in its sole discretion, to require Borrower to establish lock box 
     accounts in addition to, or in lieu of, Borrower's "blocked account", 
     which lock box accounts will be subject to an agreement (consistent with
     the provisions of this Agreement) acceptable to Lender, Borrower and the 
     Collecting Banks."

          13.2.  Notwithstanding the provisions of Section 13.1
     hereof, so long as (a) no Default, Event of Default or
     Subsidiary Event of Default (as such terms are defined in the
     Parent Loan Agreement) has occurred and (b) Excess
     Availability (as defined in the Parent Loan Agreement) is Ten
     Million Dollars ($10,000,000) or more, Borrower shall be
     permitted to receive directly from the Collecting Banks the
     funds deposited therein.  However, if at any time (x) any
     Default, Event of Default or Subsidiary Event of Default (as
     such terms are defined in the Parent Loan Agreement) shall
     occur, or (y) Excess Availability (as defined in the Parent
     Loan Agreement) shall be or become less than Ten Million
     Dollars ($10,000,000), such permission shall automatically 


                               
                               
                               
                               
                               
                               
                               
                               -4-
                               
<PAGE>                               

     cease and Agent may, and upon the request of the Required
     Lenders (as defined in the Parent Loan Agreement) shall, then
     and thereafter issue Blockage Notices to the Collecting Banks.

     5.   Amendments to Section 19 of Talley Defense Systems, Inc.
Subsidiary Loan Agreement.  

          5.1.  Amendment to Tangible Net Worth Covenant.  Section
19.1 of the Talley Defense Systems, Inc. Subsidiary Loan Agreement
shall be amended and restated in its entirety to read as follows:

     Borrower shall cause its Tangible Net Worth, as measured at
     the end of each calendar month, to equal or exceed the
     following amounts during the term of this Agreement:

                    Period                            Amount
                    ------                            ------
     April 1, 1997 through June 30, 1997            $10,000,000
     July 1, 1997 through September 30, 1997        $10,000,000
     October 1, 1997 through December 31, 1997      $10,000,000
     January 1, 1998 through March 31, 1998         $11,000,000
     April 1, 1998 through June 30, 1998            $11,000,000
     July 1, 1998 through September 30, 1998        $11,000,000
     October 1, 1998 through December 31, 1998      $11,000,000
     Every Month Thereafter                         $11,000,000
                                                    plus an
                                                    increase of
                                                    $500,000 each
                                                    January 1,
                                                    commencing 
                                                    January 1,
                                                    1999

          5.2. Amendment to Cumulative Free Cash Flow Covenant. 
Section 19.2 of the Talley Defense Systems, Inc. Subsidiary Loan
Agreement shall be amended by (i) deleting the columns titled
"Calendar Quarter Ending" and "Amount" and replacing them in their
entirety with the following:
          
          Calendar Quarter Ending                     Amount
          -----------------------                     ------
     June 30, 1997                                  $1,000,000
     September 30, 1997                             $1,000,000
     December 31, 1997                              $1,000,000
     March 31, 1998                                 $1,250,000
     June 30, 1998                                  $1,250,000
     September 30, 1998                             $1,250,000
     December 31, 1998                              $1,250,000
     Each Calendar Quarter Thereafter               $1,250,000 plus an
                                                    increase of $250,000
                                                    each January 1,
                                                    commencing  January
                                                    1, 1999



                               -5-

<PAGE>

and (ii) adding the following at the end of Section 19.2 "provided,
however, that Borrower's Free Cash Flow as of the end of any such
quarter shall be computed without including in the computation of
the sum of Capital Expenditures those Capital Expenditures made by
the Borrower or its Affiliates in connection with the participation
by the Borrower or its Affiliates in the Aegis Technologies, L.L.C.
joint venture regarding the joint development of certain airbag technology."

     6.   Amendments to Section 19 of Universal Propulsion Company,
Inc. Subsidiary Loan Agreement.  

          6.1.  Amendment to Tangible Net Worth Covenant.  Section 19.1 
of the Universal Propulsion Company, Inc. Subsidiary Loan Agreement shall 
be amended and restated in its entirety to read as follows:

     Borrower shall cause its Tangible Net Worth, as measured at
     the end of each calendar month, to equal or exceed the
     following amounts during the term of this Agreement:

                     Period                         Amount
                     ------                         ------
     April 1, 1997 through June 30, 1997          $13,000,000
     July 1, 1997 through September 30, 1997      $13,000,000
     October 1, 1997 through December 31, 1997    $13,000,000
     January 1, 1998 through March 31, 1998       $13,500,000
     April 1, 1998 through June 30, 1998          $13,500,000
     July 1, 1998 through September 30, 1998      $13,500,000
     October 1, 1998 through December 31, 1998    $13,500,000
     Every Month Thereafter                       $13,500,000
                                                  plus an
                                                  increase of
                                                  $500,000 each
                                                  January 1,
                                                  commencing 
                                                  January 1, 1999

          6.2. Amendment to Cumulative Free Cash Flow Covenant. 
Section 19.2 of the Universal Propulsion Company, Inc. Subsidiary
Loan Agreement shall be amended by deleting the columns titled
"Calendar Quarter Ending" and "Amount" and replacing them in their
entirety with the following:

          Calendar Quarter Ending                    Amount
          -----------------------                    ------
     June 30, 1997                                ($1,300,000)
     September 30, 1997                           ($2,500,000)
     December 31, 1997                            ($4,500,000)
     March 31, 1998                               ($4,250,000)
     June 30, 1998                                ($4,000,000)
     September 30, 1998                           ($3,750,000)
     December 31, 1998                            ($3,500,000)
     Each Calendar Quarter Thereafter             ($3,500,000) plus an
                                                  increase of $250,000
                                                  each January 1,
                                                  commencing January
                                                  1, 1999

                               -6-
<PAGE>

     7.   Amendments to Section 19 of Electrodynamics, Inc.
Subsidiary Loan Agreement.  

          7.1.  Amendment to Tangible Net Worth Covenant.  Section
19.1 of the Electrodynamics, Inc. Subsidiary Loan Agreement shall
be amended and restated in its entirety to read as follows:

     Borrower shall cause its Tangible Net Worth, as measured at
     the end of each calendar month, to equal or exceed the
     following amounts during the term of this Agreement:

                     Period                         Amount
                     ------                         ------
     April 1, 1997 through June 30, 1997          $9,000,000
     July 1, 1997 through September 30, 1997      $9,000,000
     October 1, 1997 through December 31, 1997    $9,000,000
     January 1, 1998 through March 31, 1998       $10,000,000
     April 1, 1998 through June 30, 1998          $10,000,000
     July 1, 1998 through September 30, 1998      $10,000,000
     October 1, 1998 through December 31, 1998    $10,000,000
     Every Month Thereafter                       $10,000,000 plus an
                                                  increase of
                                                  $1,000,000
                                                  each January 1,
                                                  commencing 
                                                  January 1, 1999

          7.2. Amendment to Cumulative Free Cash Flow Covenant. 
Section 19.2 of the Electrodynamics, Inc. Subsidiary Loan Agreement
shall be amended by deleting the columns titled "Calendar Quarter
Ending" and "Amount" and replacing them in their entirety with the
following:

          Calendar Quarter Ending                    Amount
          -----------------------                    ------
     June 30, 1997                                 $2,000,000
     September 30, 1997                            $2,250,000
     December 31, 1997                             $2,500,000
     March 31, 1998                                $2,500,000
     June 30, 1998                                 $2,750,000
     September 30, 1998                            $2,750,000
     December 31, 1998                             $2,750,000
     Each Calendar Quarter Thereafter              $2,750,000 plus an
                                                   increase of $250,000
                                                   each January 1,
                                                   commencing January
                                                   1, 1999

     8.   Amendments to Section 19 of Rowe Industries, Inc.
Subsidiary Loan Agreement.  

          8.1.  Amendment to Tangible Net Worth Covenant.  Section
19.1 of the Rowe Industries, Inc. Subsidiary Loan Agreement shall
be amended and restated in its entirety to read as follows:


                               -7-

<PAGE>

     Borrower shall cause its Tangible Net Worth, as measured at
     the end of each calendar month, to equal or exceed the
     following amounts during the term of this Agreement:

                     Period                          Amount
                     ------                          ------
     April 1, 1997 through June 30, 1997            $100,000
     July 1, 1997 through September 30, 1997        $100,000
     October 1, 1997 through December 31, 1997      $100,000
     January 1, 1998 through March 31, 1998         $250,000
     April 1, 1998 through June 30, 1998            $250,000
     July 1, 1998 through September 30, 1998        $250,000
     October 1, 1998 through December 31, 1998      $250,000
     Every Month Thereafter                         $250,000 plus
                                                    an increase of
                                                    $100,000 each
                                                    January 1,
                                                    commencing 
                                                    January 1,
                                                    1999

          8.2. Amendment to Cumulative Free Cash Flow Covenant. 
Section 19.2 of the Rowe Industries, Inc. Subsidiary Loan Agreement
shall be amended by deleting the columns titled "Calendar Quarter
Ending" and "Amount" and replacing them in their entirety with the
following:

          Calendar Quarter Ending                    Amount
          -----------------------                    ------
     June 30, 1997                                  $100,000
     September 30, 1997                             $100,000
     December 31, 1997                              $100,000
     March 31, 1998                                 $125,000
     June 30, 1998                                  $125,000
     September 30, 1998                             $125,000
     December 31, 1998                              $125,000
     Each Calendar Quarter Thereafter               $125,000 plus an
                                                    increase of $25,000
                                                    each January 1,
                                                    commencing January
                                                    1, 1999

     9.   Amendments to Section 19 of John J. McMullen Associates,
Inc. Subsidiary Loan Agreement.  

          9.1.  Amendment to Tangible Net Worth Covenant.  Section
19.1 of the John J. McMullen Associates, Inc. Subsidiary Loan
Agreement shall be amended and restated in its entirety to read as
follows:







                               -8-

<PAGE>

     Borrower shall cause its Tangible Net Worth, as measured at
     the end of each calendar month, to equal or exceed the
     following amounts during the term of this Agreement:

                     Period                          Amount
                     ------                          ------
     April 1, 1997 through June 30, 1997           $7,000,000
     July 1, 1997 through September 30, 1997       $7,000,000
     October 1, 1997 through December 31, 1997     $7,000,000
     January 1, 1998 through March 31, 1998        $7,250,000
     April 1, 1998 through June 30, 1998           $7,250,000
     July 1, 1998 through September 30, 1998       $7,250,000
     October 1, 1998 through December 31, 1998     $7,250,000
     Every Month Thereafter                        $7,250,000
                                                   plus an increase 
                                                   of $250,000 each
                                                   January 1, commencing 
                                                   January 1, 1999

          9.2.  Amendment to Cumulative Free Cash Flow Covenant. 
Section 19.2 of the John J. McMullen Associates, Inc. Subsidiary
Loan Agreement shall be amended by deleting the columns titled
"Calendar Quarter Ending" and "Amount" and replacing them in their
entirety with the following:

          Calendar Quarter Ending                    Amount
          -----------------------                    ------
     June 30, 1997                                 $4,000,000
     September 30, 1997                            $4,000,000
     December 31, 1997                             $4,000,000
     March 31, 1998                                $5,000,000
     June 30, 1998                                 $5,000,000
     September 30, 1998                            $5,000,000
     December 31, 1998                             $5,000,000
     Each Calendar Quarter Thereafter              $5,000,000 plus an
                                                   increase of $250,000
                                                   each January 1, commencing 
                                                   January 1, 1999

     10.  Amendments to Section 19 of Talley Metals Technology,
Inc. Subsidiary Loan Agreement.

          10.1.  Amendment to Tangible Net Worth Covenant.  Section
19.1 of the Talley Metals Technology, Inc. Subsidiary Loan Agreement 
shall be amended and restated in its entirety to read as follows:

     Borrower shall cause its Tangible Net Worth, as measured at
     the end of each calendar month, to equal or exceed the
     following amounts during the term of this Agreement:

                     Period                          Amount
                     ------                          ------
     April 1, 1997 through June 30, 1997           $21,500,000
     July 1, 1997 through September 30, 1997       $21,500,000
     October 1, 1997 through December 31, 1997     $21,500,000
     January 1, 1998 through March 31, 1998        $22,000,000

                               -9-
<PAGE>
     
     
                     Period                          Amount
                     ------                          ------
     April 1, 1998 through June 30, 1998           $22,000,000
     July 1, 1998 through September 30, 1998       $22,000,000
     October 1, 1998 through December 31, 1998     $22,000,000
     Every Month Thereafter                        $22,000,000
                                                   plus an increase of
                                                   $250,000 each January 1,
                                                   commencing January 1, 1999

          10.2.  Amendment to Cumulative Free Cash Flow Covenant. 
Section 19.2 of the Talley Metals Technology, Inc. Subsidiary Loan
Agreement shall be amended by deleting the columns titled "Calendar
Quarter Ending" and "Amount" and replacing them in their entirety
with the following:

          Calendar Quarter Ending                    Amount
          -----------------------                    ------
     June 30, 1997                                 $2,500,000
     September 30, 1997                            $3,500,000
     December 31, 1997                             $5,000,000
     March 31, 1998                                $5,000,000
     June 30, 1998                                 $6,000,000
     September 30, 1998                            $6,000,000
     December 31, 1998                             $6,000,000
     Each Calendar Quarter Thereafter              $6,000,000 plus an
                                                   increase of $250,000
                                                   each January 1,
                                                   commencing January 1, 1999

     11.  Amendments to Section 19 of Amcan Specialty Steels, Inc.
Subsidiary Loan Agreement.

          11.1.  Amendment to Tangible Net Worth Covenant.  Section
19.1 of the Amcan Specialty Steels, Inc. Subsidiary Loan Agreement
shall be amended and restated in its entirety to read as follows:

     Borrower shall cause its Tangible Net Worth, as measured at
     the end of each calendar month, to equal or exceed the
     following amounts during the term of this Agreement:

                     Period                          Amount
                     ------                          ------
     April 1, 1997 through June 30, 1997           $4,500,000
     July 1, 1997 through September 30, 1997       $4,500,000
     October 1, 1997 through December 31, 1997     $4,500,000
     January 1, 1998 through March 31, 1998        $4,750,000
     April 1, 1998 through June 30, 1998           $4,750,000
     July 1, 1998 through September 30, 1998       $4,750,000
     October 1, 1998 through December 31, 1998     $4,750,000
     Every Month Thereafter                        $4,750,000
                                                   plus an increase of
                                                   $250,000 each January 1,
                                                   commencing January 1, 1999

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<PAGE>

          11.2.  Amendment to Cumulative Free Cash Flow Covenant. 
Section 19.2 of the Amcan Specialty Steels, Inc. Subsidiary Loan
Agreement shall be amended by deleting the columns titled "Calendar
Quarter Ending" and "Amount" and replacing them in their entirety
with the following:

          Calendar Quarter Ending                    Amount
          -----------------------                    ------
     June 30, 1997                                  $500,000
     September 30, 1997                             $525,000
     December 31, 1997                              $550,000
     March 31, 1998                                 $550,000
     June 30, 1998                                  $600,000
     September 30, 1998                             $625,000
     December 31, 1998                              $650,000
     Each Calendar Quarter Thereafter               $650,000 plus an
                                                    increase of $100,000
                                                    each January 1,
                                                    commencing January
                                                    1, 1999

     12.  Amendments to Section 19 of Porcelain Products Co.
Subsidiary Loan Agreement.

          12.1.  Amendment to Tangible Net Worth Covenant.  Section
19.1 of the Porcelain Products Co. Subsidiary Loan Agreement shall
be amended and restated in its entirety to read as follows:

     Borrower shall cause its Tangible Net Worth, as measured at
     the end of each calendar month, to equal or exceed the
     following amounts during the term of this Agreement:

                     Period                          Amount
                     ------                          ------
     April 1, 1997 through June 30, 1997           $6,500,000
     July 1, 1997 through September 30, 1997       $6,500,000
     October 1, 1997 through December 31, 1997     $6,500,000
     January 1, 1998 through March 31, 1998        $7,000,000
     April 1, 1998 through June 30, 1998           $7,000,000
     July 1, 1998 through September 30, 1998       $7,000,000
     October 1, 1998 through December 31, 1998     $7,000,000
     Every Month Thereafter                        $7,000,000
                                                   plus an
                                                   increase of
                                                   $250,000 each
                                                   January 1,
                                                   commencing 
                                                   January 1,
                                                   1999

         12.2.  Amendment to Cumulative Free Cash Flow Covenant. 
Section 19.2 of the Porcelain Products Co. Subsidiary Loan
Agreement shall be amended by deleting the columns titled "Calendar
Quarter Ending" and "Amount" and replacing them in their entirety
with the following:

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<PAGE>

          Calendar Quarter Ending                    Amount
          -----------------------                    ------
     June 30, 1997                                 $2,000,000
     September 30, 1997                            $3,000,000
     December 31, 1997                             $3,000,000
     March 31, 1998                                $3,250,000
     June 30, 1998                                 $3,250,000
     September 30, 1998                            $3,250,000
     December 31, 1998                             $3,250,000
     Each Calendar Quarter Thereafter              $3,250,000 plus an
                                                   increase of $150,000
                                                   each January 1,
                                                   commencing January
                                                   1, 1999

     13.  Amendments to Section 19 of Dimetrics, Inc. Subsidiary
Loan Agreement.

          13.1.  Amendment to Tangible Net Worth Covenant.  Section
19.1 of the Dimetrics, Inc. Subsidiary Loan Agreement shall be
amended and restated in its entirety to read as follows:

     Borrower shall cause its Tangible Net Worth, as measured at
     the end of each calendar month, to equal or exceed the
     following amounts during the term of this Agreement:

                     Period                          Amount
                     ------                          ------
     April 1, 1997 through June 30, 1997           $3,500,000
     July 1, 1997 through September 30, 1997       $3,500,000
     October 1, 1997 through December 31, 1997     $3,500,000
     January 1, 1998 through March 31, 1998        $4,000,000
     April 1, 1998 through June 30, 1998           $4,000,000
     July 1, 1998 through September 30, 1998       $4,000,000
     October 1, 1998 through December 31, 1998     $4,000,000
     Every Month Thereafter                        $4,000,000
                                                   plus an
                                                   increase of
                                                   $100,000 each
                                                   January 1,
                                                   commencing 
                                                   January 1, 1999

          13.2.  Amendment to Cumulative Free Cash Flow Covenant. 
Section 19.2 of the Dimetrics, Inc. Subsidiary Loan Agreement shall
be amended by deleting the columns titled "Calendar Quarter Ending"
and "Amount" and replacing them in their entirety with the
following:

          Calendar Quarter Ending                     Amount
          -----------------------                     ------
     June 30, 1997                                 ($1,750,000)
     September 30, 1997                            ($1,500,000)
     December 31, 1997                             ($1,250,000)
     March 31, 1998                                ($1,500,000)

                               -12-

<PAGE>

         Calendar Quarter Ending                      Amount
         -----------------------                      ------
     June 30, 1998                                 ($1,250,000)
     September 30, 1998                            ($1,000,000)
     December 31, 1998                             ($750,000)
     Each Calendar Quarter Thereafter              ($750,000) plus an
                                                   increase of $100,000
                                                   each January 1,
                                                   commencing January 1, 1999

     14.  Amendments to Section 19 of Waterbury Companies, Inc.
Subsidiary Loan Agreement.

          14.1.  Amendment to Tangible Net Worth Covenant.  Section
19.1 of the Waterbury Companies, Inc. Subsidiary Loan Agreement
shall be amended and restated in its entirety to read as follows:

     Borrower shall cause its Tangible Net Worth, as measured at
     the end of each calendar month, to equal or exceed the
     following amounts during the term of this Agreement:

                     Period                          Amount
                     ------                          ------
     April 1, 1997 through June 30, 1997           $13,500,000
     July 1, 1997 through September 30, 1997       $13,500,000
     October 1, 1997 through December 31, 1997     $13,500,000
     January 1, 1998 through March 31, 1998        $14,000,000
     April 1, 1998 through June 30, 1998           $14,000,000
     July 1, 1998 through September 30, 1998       $14,000,000
     October 1, 1998 through December 31, 1998     $14,000,000
     Every Month Thereafter                        $14,000,000
                                                   plus an
                                                   increase of
                                                   $500,000 each
                                                   January 1,
                                                   commencing 
                                                   January 1, 1999

          14.2.  Amendment to Cumulative Free Cash Flow Covenant. 
Section 19.2 of the Waterbury Companies, Inc. Subsidiary Loan
Agreement shall be amended by deleting the columns titled "Calendar
Quarter Ending" and "Amount" and replacing them in their entirety
with the following:

          Calendar Quarter Ending                    Amount
          -----------------------                    ------
     June 30, 1997                                 $1,500,000
     September 30, 1997                            $2,500,000
     December 31, 1997                             $2,750,000
     March 31, 1998                                $2,800,000
     June 30, 1998                                 $2,850,000
     September 30, 1998                            $2,900,000
     December 31, 1998                             $2,950,000
     Each Calendar Quarter Thereafter              $2,950,000 plus an
                                                   increase of $50,000
                                                   each January 1,
                                                   commencing January 1, 1999
                               -13-
<PAGE>

     15.  Conditions to Effectiveness.  Except for Section 3 of
this Amendment which shall be effective as of July 1, 1997, and
Sections 5 through 14, inclusive, which shall each be effective as
of April 1, 1997, this Amendment shall be effective as of the date
first above written, provided, however, that any and all Sections
of this Amendment shall only be effective upon satisfaction of the
following conditions precedent:

          15.1.  Execution of this Amendment.  The Agent shall have
received this Amendment executed by a duly authorized officer of
Lender and each Borrower.

          15.2.  Consent of Agent.  TBCC, as Agent, shall have
consented to the execution, delivery and performance of this
Amendment by executing the Consent set forth below.

          15.3.  Amendments to Parent Loan Documents.  The Lender
shall have executed the Parent Amendment and the Lender and each
Borrower shall have executed and/or delivered such other documents
and instruments in connection therewith as the Parent Lenders and
the Agent shall require as a condition precedent to the
effectiveness thereof, each in form and substance satisfactory to
the Agent, and such Parent Amendment shall have become effective.

          15.4.  Corporate Proceedings.  The Agent shall have
received a copy of the resolutions (in form and substance
reasonably satisfactory to Agent) of the Board of Directors of each
Borrower authorizing the execution, delivery and performance of
this Amendment and the other Loan Documents contemplated hereby,
all certified by the Secretary or an Assistant Secretary of each
Borrower on the date hereof.  Such certificate shall state that the
resolutions set forth therein have not been amended, modified,
revoked or rescinded as of the date of such certificate.

          15.5.  No Defaults.  No Default or Event of Default shall
have occurred and be existing either before or immediately after
giving effect to this Amendment.

          15.6.  Representations and Warranties True.  The
representations and warranties contained herein, in the Subsidiary
Loan Agreements and in all other Loan Documents (other than
representations and warranties that expressly speak only as of a
specified different date) shall be true and correct both as of the
date hereof and immediately after giving effect to this Amendment.

          15.7.  Certificate of Officers.  The Agent shall have
received a certificate, in form and substance satisfactory to the
Agent, dated the date of the effectiveness of this Amendment and
signed by the President, a Vice President or the Secretary, and the
Treasurer or Controller, of each Borrower certifying that the
conditions set forth in this Section 15 have been fulfilled and as
to such other matters as the Agent shall reasonably require.




                               -14-

<PAGE>

          15.8.  Other Conditions.  The Agent shall have received
such other agreements, opinions, certificates, representations,
instruments and other documents as it may reasonably require, all
in form and substance satisfactory to the Agent.

     16.  Representations and Warranties.  Each Borrower hereby
represents and warrants to the Lender and the Agent that (i) the
execution, delivery and performance of this Amendment and the other
documents and instruments to be executed and delivered in
connection herewith by such Borrower and the Affiliates are within
their respective corporate powers and have been duly authorized by
all necessary corporate action, (ii) no consent, approval,
authorization of, or declaration or filing with, any governmental
or public authority, and no consent of any other Person, is
required in connection with the execution, delivery and performance
of this Amendment and the other documents and instruments to be
executed and delivered in connection herewith by such Borrower and
the Affiliates, except for those already duly obtained, (iii) this
Amendment and the other documents and instruments to be executed
and delivered in connection herewith by such Borrower and the
Affiliates have been duly executed by such Borrower and Affiliates
and constitute the legal, valid and binding obligation of such
Borrower and Affiliates, enforceable against them in accordance
with their terms, (iv) the execution, delivery and performance by
such Borrower and the Affiliates of this Amendment and the other
documents and instruments to be executed and delivered in
connection herewith by such Borrower and Affiliates do not and will
not conflict with, or constitute a violation or breach of, or
constitute a default under, or result in the creation or imposition
of any Lien upon the property of such Borrower or any of the
Affiliates by reason of the terms of (a) any contract, mortgage,
Lien, lease, agreement, indenture, or instrument to which such
Borrower or such Subsidiary is a party or which is binding upon it,
(b) any requirement of law applicable to such Borrower or such
Subsidiary, or (c) the Certificate or Articles of Incorporation or
By-Laws of such Borrower or such Subsidiary, (v) no event has
occurred and is continuing which constitutes a Default or an Event
of Default, and (vi) no change or development or event involving a
prospective change, which in any such case has had or could
reasonably be expected to have a material adverse effect on the
ability of such Borrower to perform its obligations under the Loan
Documents or on the business, operations, assets, conditions
(financial or otherwise) or prospects of the Borrowers on a
consolidated basis has occurred and is continuing.

     17.  Reference to and Effect on Loan Documents.

          17.1.   On and after the date hereof, each reference in
the Subsidiary Loan Agreements to "this Agreement", "hereunder",
"hereof", "herein" or words of like import, and each reference in
the other Loan Documents to a Subsidiary Loan Agreement, shall mean
and be a reference to such Subsidiary Loan Agreement as amended
hereby.



                               -15-
                               
<PAGE>                               

          17.2.   Except as specifically amended above, all of the
terms of the Subsidiary Loan Agreements shall remain unchanged and
in full force and effect.

          17.3.   The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any Default or Event of
Default, nor as a waiver any right, power or remedy of any Lender
or the Agent under any Subsidiary Loan Agreement or any of the
other Loan Documents, nor constitute a waiver of any provision of
any Subsidiary Loan Agreement or any of the other Loan Documents.

     18.  Execution in Counterparts.  This Amendment may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and
delivered (including delivery by telecopier) shall be deemed to be
an original and all of which taken together shall constitute one
and the same instrument.

     19.  Governing Law.  This Amendment shall be governed by, and
shall be construed and enforced in accordance with, the laws of the
State of New York.

     20.  Headings.  Section headings in this Amendment are
included herein for convenience of reference only and shall not
constitute a part of this Amendment or be given any substantive
effect.

























                               
                               
                               
                               
                               
                               -16-
                               
<PAGE>                               

          IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered by their proper and duly
authorized officers as of the date set forth above.

                         BORROWERS:

                         AMCAN SPECIALTY STEELS, INC.; DIMETRICS,
                         INC.; ELECTRODYNAMICS, INC.; JOHN J.
                         MCMULLEN ASSOCIATES, INC.; PORCELAIN
                         PRODUCTS CO.; ROWE INDUSTRIES, INC.;
                         TALLEY AUTOMOTIVE PRODUCTS, INC.; TALLEY
                         DEFENSE SYSTEMS, INC.; TALLEY
                         INTERNATIONAL INVESTMENT CORPORATION;
                         TALLEY METALS TECHNOLOGY, INC.; UNIVERSAL
                         PROPULSION COMPANY; WATERBURY COMPANIES,
                         INC.; WDC, INC.


                         By:/s/   Mark S. Dickerson
                            --------------------------
                            Name:  Mark S. Dickerson
                            Title: Secretary



                         LENDER:

                         TALLEY MANUFACTURING AND TECHNOLOGY, INC.


                         By:/s/   Daniel R. Mullen
                            --------------------------
                            Name:  Daniel R. Mullen
                            Title: Treasurer






















                               -17-       
                               
<PAGE>

                         CONSENT OF AGENT


          The undersigned, as Agent, hereby consents to the
execution, delivery and performance of the foregoing Fourth
Amendment to Subsidiary Loan and Security Agreements with respect
to the Subsidiary Loan Agreements.


Dated:  As of July 31, 1997


                  TRANSAMERICA BUSINESS CREDIT CORPORATION, as Agent


                  By:/s/   Michael Burns
                     ---------------------
                     Name:  Michael Burns
                     Title: Vice President