<PAGE>
                                                                    Exhibit 10.3
================================================================================
THIRD AMENDMENT TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
156575.1
================================================================================

                                                                    July 1, 1996
                                                  

     THIS THIRD AMENDMENT IS made to the Amended and Restated Loan and Security
Agreement (the "Loan Agreement"), which Amended and Restated Loan and Security
Agreement took effect on April 6, 1995 as an amendment and restatement of the
December 16, 1994 Loan and Security Agreement made between

           The First National Bank of Boston, a national banking association
     with offices at 100 Federal Street, Boston, Massachusetts, as agent for the
     ratable benefit of the "Lenders" being:

                The First National Bank of Boston;

                        and

                State Street Bank and Trust Company, a Massachusetts trust
           company with offices at 225 Franklin Street, Boston, Massachusetts
           02110;

                        and

                Citizens Bank of Massachusetts, a Massachusetts savings bank
           with offices at 55 Summer Street, Boston, Massachusetts 02110


           and

           ACT Manufacturing, Inc., a Massachusetts corporation with its
     principal executive offices at 108 Forest Avenue, Hudson, Massachusetts
     01749

in consideration of the mutual covenants contained herein and benefits to be
derived herefrom,

                                  WITNESSETH:


<PAGE>
 
     1..  AGREEMENT TO AMEND
          ------------------
 
     Provided each of those "Conditions to Amendment" set forth in Section 2,
below, is satisfied on or before ................., 1996, the Loan Agreement
shall be amended, as set forth below, such amendment to take effect as of
 .................... 1996.

     Section 1-1(b) of the Loan Agreement (Definition of "Loan Cap") is amended
        to read as follows:

     "Loan Cap": $28,000,000.00 Minus the then aggregate Stated Amount of all
        L/C's.

     Article 3 is amended by the amendment of the following definitions,
        included therein, to read as follows:

     "Commitment and Commitment Percentage": the following amounts and
        Percentages during the periods indicated:
<TABLE>
<CAPTION>
=======================================================================
REVOLVING CREDIT:
COMMITMENTS AND PERCENTAGE COMMITMENTS
=======================================================================
<S>                             <C>                   <C>
 
LENDER
-----------------------------------------------------------------------
                                DOLLAR COMMITMENT     COMMITMENT
                                TO                    PERCENTAGE OF
                                REVOLVING CREDIT      REVOLVING CREDIT
                                LOANS                 LOANS
                                ($ MILLIONS)/*/
=======================================================================
THE FIRST NATIONAL                    16.8                60 %
BANK OF BOSTON
-----------------------------------------------------------------------
CITIZENS                               5.6                 20
-----------------------------------------------------------------------
STATE STREET                           5.6                 20
-----------------------------------------------------------------------
TOTALS..............                 $28.0               100 %
=======================================================================
 
</TABLE>
     "Termination Date": February 28, 1998.



<PAGE>
 
     EXHIBIT 9-11 (Net Worth Requirement) of the Loan Agreement is amended
        to read as follows:

        1.   Net Worth:  The Borrower's Net Worth shall not be less than the
following on the date indicated:
<TABLE>
<CAPTION>
======================================================== 
Date                                   Minimum Net Worth
======================================================== 
<S>                                    <C>
December 31, 1994                         $ 6,000,000.00
======================================================== 
Immediately after IPO                      28,000,000.00
======================================================== 
September 30, 1995 to  May 31, 1996        31,414,000.00
======================================================== 
June 1, 1996 and thereafter                35,000,000.00
======================================================== 
 
</TABLE>

        2.   CONDITIONS TO EFFECTIVENESS OF AMENDMENT
             ----------------------------------------

        The within Amendment shall be effective if each of the following
conditions is satisfied on or before ........................, 1996 and on the
date on which such amendment is to take effect, no Suspension Event (as defined
in the Loan Agreement) is extant:

 
            (a)   Receipt by the Agent of a Certificate setting forth the text
of the resolutions adopted by the Directors of the Borrower authoritizing the
Borrower's execution of the within Amendment, and attesting to the authority of
the persons who executed the within Amendment on behalf of the Borrower.

            (b)   Receipt by the Agent of a Certificate, executed by the
Borrower's President and its Chief Financial Officer, respectively confirming
that no Suspension Event is then extant.

            (c)   Receipt by the Agent of an opinion of counsel to the Borrower
as to the due execution and effectiveness of the within Amendment (which opinion
is subject only to the same qualifications as had been included in the opinion
delivered by that counsel at the initial execution of the Loan Agreement).

        The Borrower hereby represents that, at the execution of the within
Agreement, no Suspension Event has occurred.


<PAGE>
 
        Except as amended hereby, or by the First or the Second Amendment to the
Loan Agreement, all terms and conditions of the Loan Agreement shall remain in
full force and effect.



                                ACT MANUFACTURING, INC.
                                              (The "Borrower")

                                By /s/ Douglass C. Greenlaw
                                  --------------------------------

                                Its Chief Financial Officer
                                   -------------------------------


THE FIRST NATIONAL BANK OF BOSTON
                    ("Agent")

By /s/ George Mandt
  --------------------------------

Its Vice President
   -------------------------------

                                 The "Lenders"

THE FIRST NATIONAL BANK OF BOSTON        STATE STREET BANK AND TRUST COMPANY


By  /s/ George Mandt                     By /s/ F. Andrew Beise
  --------------------------------         --------------------------------

Its Vice President                       Its Vice President
   -------------------------------          --------------------------------

CITIZENS BANK OF MASSACHUSETTS

By /s/ Kathryn Bacastow
  -------------------------------- 

Its Senior Vice President
   -------------------------------