<PAGE>   1




                                                                     Exhibit 4.2

                                 FLEET BANK - NH
                  THIRD AMENDMENT TO COMMERCIAL LOAN AGREEMENT
                               AND LOAN DOCUMENTS


     THIS THIRD AMENDMENT (the "Amendment") made as of the 27th day of February,
1997, is by and among FLEET BANK - NH, a bank organized under the laws of the
State of New Hampshire with an address of Mail Stop NHNA E02A, 1155 Elm Street,
Manchester, New Hampshire 03101 (the "Bank"), and WPI GROUP, INC., WPI
ELECTRONICS, INC., WPI MAGNETEC, INC., WPI MICRO PALM, INC., WPI POWER SYSTEMS,
INC., WPI TERMIFLEX, INC., WPI MICRO PROCESSOR SYSTEMS, INC., and WPI
DECISIONKEY, INC., WPI UK HOLDING, INC., WPI UK HOLDING II, INC. and WPI OYSTER
TERMINALS, INC., each a New Hampshire corporation, WPI GROUP (U.K.), an
unlimited company organized under the laws of England and Wales, and WPI OYSTER
TERMINALS LIMITED, a corporation organized under the laws of England and Wales,
all such entities having executive offices at 1155 Elm Street Manchester, New
Hampshire 03101 (all of such entities are hereinafter referred to individually
and collectively as the "Borrower").

                                R E C I T A L S:
                                ----------------

     WHEREAS, pursuant to a Commercial Loan Agreement dated October 24, 1995, as
amended by First Amendment to Commercial Loan Agreement and Loan Documents dated
March 20, 1996, and Second Amendment to Commercial Loan Agreement and Loan
Documents dated July 12, 1996 (as amended, the "Loan Agreement") and certain
Loan Documents as defined therein, the Bank has extended to WPI Group, Inc., WPI
Electronics, Inc., WPI Magnetec, Inc., WPI Micro Palm, Inc., WPI Power Systems,
Inc., WPI Termiflex, Inc. WPI Micro Processor Systems, INC., and WPI
DecisionKey, Inc., a revolving line of credit loan in the principal amount of up
to Thirty Million Dollars ($30,000,000.00) (the "Revolving Line of Credit
Loan");

     WHEREAS, the Bank and the Borrower have agreed that each of WPI UK Holding,
Inc., WPI UK Holding II, Inc., WPI Oyster Terminals, Inc., WPI Group (U.K.) and
WPI Oyster Terminals Limited shall join the Loan Amendment and Loan Documents as
borrowers thereunder;

     WHEREAS, the Borrower has requested, and the Bank has agreed, to eliminate
the required reductions as of December 1, 1996 and June 30, 1997 of the maximum
principal amount available to the Borrower under the Revolving Line of Credit
Loan and to extend the Revolving Line of Credit Initial Review Date to March 31,
1999; and

     WHEREAS, to effect the foregoing the Bank and the Borrower are entering
into this Amendment. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Loan Agreement.

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants, agreements and promises contained herein, the parties hereby agree as
follows:


     1. ADDITION OF WPI UK HOLDING, INC., WPI UK HOLDING II, INC. WPI OYSTER
TERMINALS, INC., WPI OYSTER TERMINALS LIMITED AND WPI GROUP (UK) AS BORROWER.
Borrower and Bank agree that, effective as of the date hereof, each of the Loan

<PAGE>   2

Agreement and the Loan Documents shall be and hereby is amended to join and
include each of WPI UK Holding, Inc., WPI UK Holding II, Inc., WPI Oyster
Terminal, Inc., WPI Oyster Terminals Limited, jointly and severally, as a
borrower thereunder, such that each reference to "Borrower" in the Loan
Agreement and in each of the Loan Documents shall hereafter mean and include
each of WPI Group, Inc., WPI Electronics, Inc., WPI Magnetec, Inc., WPI Micro
Palm, Inc., WPI Power Systems, Inc., WPI Termiflex, Inc., WPI Micro Processor
Systems, Inc., WPI DecisionKey, Inc., WPI UK Holding, Inc., WPI UK Holding II,
Inc., WPI Oyster Terminals, Inc., WPI Oyster Terminals Limited, and WPI Group
(U.K.), jointly and severally. Borrower agrees to take all such further actions
and to excuse all such further documents and instruments as are necessary,
proper, or required to effect the provisions of this Section I.

     2. Amendment of Loan Agreement.
        ---------------------------
  
     (a) Section I. A. of the Loan Agreement shall be and hereby is amended by
deleting the same and inserting in place thereof the following:

     "A. MAXIMUM AVAILABLE AMOUNT. THE AGGREGATE MAXIMUM PRINCIPAL AMOUNT
     AVAILABLE TO THE BORROWER UNDER THE REVOLVING LINE OF CREDIT LOAN SHALL BE
     UP TO THIRTY MILLION DOLLARS ($30,000,000.00).

     (b) Section I.C. of the Loan Agreement shall be and hereby is amended by
changing the Revolving Line of Credit Initial Review Date referenced thereunder
from March 31, 1998 to March 31, 1999.

     3. SUBSTITUTION AND REPLACEMENT OF REVOLVING LINE OF CREDIT PROMISSORY
NOTE. To reflect the amendments hereby, the Bank and the Borrower agree that the
Revolving Line of Credit Promissory Note in the principal amount of Thirty
Million Dollars ($30,000,000.00) dated July 12, 1996 of WPI Group, Inc., WPI
Electronics, Inc., WPI Magnetec, Inc., WPI Micro Palm Inc., WPI Power Systems,
Inc., WPI Termiflex, Inc., WPI Micro Processor Systems, Inc., and WPI
DecisionKey, Inc., payable to the order of the Bank shall be substituted and
replaced in full by the Revolving Line of Credit Promissory Note in the
principal amount of Thirty Million Dollars ($30,000,000.00) of Borrower payable
to the order of the Bank attached hereto as Exhibit A (the "Replacement RLOC
Note"), which Replacement RLOC Note shall be executed contemporaneously with the
execution of this Amendment, such that the indebtedness of WPI Group, Inc., WPI
Electronics, Inc., WPI Magnetec, Inc., WPI Micro Palm, Inc., WPI Power Systems,
Inc., WPI Termiflex, Inc., WPI Micro Processor Systems, Inc., and WPI
DecisionKey, Inc., currently due and owing to the Bank under the Revolving Line
of Credit Loan shall hereafter be evidenced by the Replacement RLOC Note.

     4. AMENDMENT OF OTHER LOAN DOCUMENTS. Each of the other Loan Documents,
whether or not specifically referenced herein or hereby, shall be and hereby is
amended to reflect the terms and conditions of this Amendment and to include
within the scope of such Loan Documents and the description of loans and notes
therein, the Revolving Line of Credit Loan as increased, amended and modified
hereby.
<PAGE>   3

     5. REPRESENTATIONS AND WARRANTIES. Each Borrower individually hereby makes,
confirms, reasserts, and restates all of the representations and warranties of
the Borrower under the Loan Agreement and each of the Loan Documents, all as of
the date hereof.

     6. AFFIRMATIVE COVENANTS. Each Borrower individually hereby makes,
confirms, reasserts, and restates all of the Affirmative Covenants of the
Borrower as set forth in the Loan Agreement and each of the Loan Documents, as
amended hereby, all as of the date hereof.

     7. NEGATIVE COVENANTS. Each Borrower individually hereby makes confirms,
reasserts, and restates all of the Negative Covenants of the Borrower as set
forth in the Loan Agreement and each of the Loan Documents, all as of the date
hereof.

     8. NO OTHER MODIFICATIONS. Except as specifically modified or amended
herein or hereby, all of the terms and conditions of each of the Revolving Line
of Credit Loan, the Loan Agreement and the Loan Documents, remain otherwise
unchanged, and in full force and effect, all of which are hereby confirmed and
ratified by the parties hereto.

     9. BANK FEE. For and in consideration of the Bank entering into this
Amendment and increasing the maximum principal amount available to the Borrower
under the Revolving Line of Credit Loan, the Borrower shall pay the Bank a fee
in the amount of Twenty-five Thousand Dollars ($25,000.00); provided, however,
that such fee shall only be due and payable in the event that the Parent issues
additional capital stock within the twelve (12) month period from the date
hereof, and the proceeds of such issuance are used, in whole or in part, to pay
down the outstanding principal amount under the Revolving Line of Credit Loan by
an amount in excess of $1,000,000.00.

     10. COSTS AND EXPENSES OF BANK. The Borrower agrees to reimburse the Bank
for all reasonable costs, expenses, and fees, including attorneys' fees,
associated with the documentation of this Amendment. Borrower consents to Bank
charging Borrower's Revolving Line of Credit Loan account for all such costs,
expenses and fees.









     IN WITNESS WHEREOF, the parties have executed and delivered this Amendment
all as of the date first set forth above.


WITNESSES                                   FLEET BANK - NH

<PAGE>   4

/s/Paula Belanger                           By:/s/Mark L. Young
-----------------------------                  ----------------
                                               Mark L. Young, Senior Vice 
                                               President

WITNESSES:                                  BORROWER:

                                            WPI GROUP, INC.


/s/ Michael Tule ( to all)                  By:/s/ Michael Foster
-----------------------------                  ------------------
                                               Michael Foster, Chairman


                                            WPI POWER SYSTEMS, INC.


                                            By:/s/ Michael Foster
-----------------------------                  ------------------
                                               Michael Foster, Chairman


                                            WPI MAGNETEC, INC.


                                            By:/s/ Michael Foster
-----------------------------                  ------------------
                                               Michael Foster, Chairman




                                            WPI ELECTRONICS, INC.


                                            By:/s/ Michael Foster
-----------------------------                  ------------------
                                               Michael Foster, Chairman


                                            WPI TERMIFLEX, INC.


                                            By:/s/ Michael Foster
-----------------------------                  ------------------
                                               Michael Foster, Chairman

<PAGE>   5

                                            WPI MICRO PALM, INC.


                                            By:/s/ Michael Foster
-----------------------------                  ------------------
                                               Michael Foster, Chairman


                                            WPI MICRO PROCESSOR SYSTEMS, INC.


                                            By:/s/ Michael Foster
-----------------------------                  ------------------
                                               Michael Foster, Chairman


                                            WPI DECISIONKEY, INC


                                            By:/s/ Michael Foster
-----------------------------                  ------------------    
                                               Michael Foster, Chairman WPI


<PAGE>   6

                                            GROUP (U.K.)


                                            By:/s/ Michael Foster
-----------------------------                  ------------------    
                                               Michael Foster, Chairman


                                            WPI OYSTER TERMINALS LIMITED


                                            By:/s/ Michael Foster
-----------------------------                  ------------------    
                                               Michael Foster, Chairman


                                            WPI UK HOLDING, INC.


                                            By:/s/ Michael Foster
-----------------------------                  ------------------    
                                               Michael Foster, Chairman


                                            WPI UK HOLDING II, INC.


                                            By:/s/ Michael Foster
-----------------------------                  ------------------    
                                               Michael Foster, Chairman


                                            WPI OYSTER TERMINALS, INC.


                                            By:/s/ Michael Foster
-----------------------------                  ------------------    
                                               Michael Foster, Chairman


<PAGE>   7



                                    EXHIBIT A


                    REVOLVING LINE OF CREDIT PROMISSORY NOTE
                    ----------------------------------------


$30,000,000.00 U.S.               Manchester, NH               February 27, 1997

     FOR VALUE RECEIVED, the undersigned, WPI GROUP, INC., WPI ELECTRONICS,
INC., WPI MAGNETEC, INC., WPI MICRO PALM, INC., WPI POWER SYSTEMS, INC., WPI
TERMIFLEX, INC., MICRO PROCESSOR SYSTEMS, INC., and WPI DECISIONKEY, INC., WPI
UK HOLDING, INC., WPI UK HOLDING, INC., and WPI OYSTER TERMINALS, INC., each a
New Hampshire corporation, WPI GROUP (U.K.), an unlimited company organized
under the laws of England and Wales, and WPI OYSTER TERMINALS LIMITED, a
corporation organized under the laws of England and Wales, all such entities
having executive offices at 1155 Elm Street Manchester, New Hampshire 03101 (all
of such entitites are hereinafter referred to individually and collectively as
the "BORROWER"), hereby promise, jointly and severally, to pay to the order of
FLEET BANK - NH, a bank organized under the laws of the State of New Hampshire
with an address of Mail Stop NHNA E02A, 1155 Elm Street, Manchester, New
Hampshire 03101 (the "Bank"), at such address, or such other place or places as
the holder hereof may designate in writing from time to time hereafter, the
maximum principal sum of THIRTY MILLION DOLLARS ($30,000,000.00), or so much
thereof as may be advanced or readvanced by the Bank to the Borrower from time
to time hereafter (such amounts defined as the "Debit Balance" below), together
with interest as provided for hereinbelow, in lawful money of the United States
of America, all as provided hereinbelow.

     The Borrower's "Debit Balance" shall mean the debit balance in an account
on the books of the Bank, maintained in the form of a ledger card, computer
records or otherwise in accordance with the Bank's customary practice and
appropriate accounting procedures wherein there shall be recorded the principal
amount of all advances and readvances made by the Bank to the Borrower, all
principal payments made by the Borrower to the Bank hereunder, and all other
appropriate debits and credits to principal. The Bank shall render to the
Borrower a statement of account with respect thereto on a monthly basis. The
statement shall be considered correct and be considered accepted by the
Borrower, and shall conclusively bind the Borrower, unless Borrower notifies the
Bank to the contrary within thirty (30) days after the date of Borrower's
receipt of the statement.

     The Bank agrees to lend to the Borrower, and the Borrower may borrow, up to
the maximum principal sum provided for in this Note in accordance with and
subject to the terms, conditions, and limitations of this Note and the
Commercial Loan Agreement dated October 24, 1995, as amended by First Amendment
to Commercial Loan Agreement and Loan Documents dated March 20, 1996, and by
Second Amendment to Commercial Loan Agreement and Loan Documents dated July 12,
1996 and Third Amendment to Commercial Loan Agreement and Loan Documents of even
date herewith among the Bank and the Borrower, and as the same may be further
amended from time to time 

<PAGE>   8

hereafter (as amended, the "Loan Agreement"). The holder of this Note is
entitled to all of the benefits and rights, and is subject to all of the
obligations, of the Bank under the Loan Agreement. However, neither this
reference to the Loan Agreement nor any provision thereof shall impair the
absolute and unconditional obligation of the Borrower to pay the principal and
interest of this Note as herein provided. Capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the Loan Agreement.

     The Borrower agrees that the Bank may deliver all advances under this Note
by direct deposit to any demand account of the Borrower with the Bank or in such
other reasonable manner as may be designated in writing by the Bank to the
Borrower, and that all such advances shall represent binding obligations of the
Borrower.

     The Borrower acknowledges that this Note is to evidence the Borrower's
obligation to pay its Debit Balance, plus interest and any other applicable
charges as determined from time to time, and that it shall continue to do so
despite the occurrence of intervals when no Debit Balance exists because the
Borrower has paid the previously existing Debit Balance in full.

     Interest shall be calculated and charged daily, based on the actual days
elapsed over a three hundred sixty (360) day banking year, on the Debit Balance
outstanding from time to time at an annual variable rate equal to the Prime
Rate. The "Prime Rate" shall be the rate published by THE WALL STREET JOURNAL
from time to time under the category "Prime Rate: The Base Rate on Corporate
Loans posted by at least 75% of the Nation's 30 Largest Banks" (the lowest of
the rates so published if more than one rate is published under this category at
any given time) or such other comparable index rate selected by the Bank in its
sole discretion if THE WALL STREET JOURNAL ceases to publish such rate. The
BORROWER acknowledges that the Prime Rate is used for reference purposes only as
an index and is not necessarily the lowest interest rate charged by the BANK on
commercial loans. Each time the Prime Rate changes the interest rate hereunder
shall change contemporaneously with such change in the Prime Rate.
Notwithstanding the foregoing, the Borrower may elect from time to time a fixed
rate of interest equal to the Eurodollar Based Rate to apply to outstanding
principal hereunder, all in accordance with, and subject to the limitations of,
the provisions of the Loan Agreement.

     Outstanding principal hereunder shall be paid in accordance with the terms
and conditions of the Loan Agreement. Accrued interest only on the outstanding
Debit Balance hereunder shall be payable monthly in arrears commencing thirty
(30) days from the date hereof (or on any day within 30 days of the date hereof
agreed to by the Borrower and the Bank to provide for a convenient payment date)
and continuing on the same date of each month thereafter through and until the
Review Date as to which the Bank does not renew the Revolving Line of Credit
Loan, whereupon all outstanding principal and accrued and unpaid interest
hereunder shall be due and payable in full.

     The Borrower may prepay this Note in whole or in part at any time;
provided, however, that such prepayment shall be subject to the terms and
conditions of the Loan Agreement and the charges provided thereunder payable by
Borrower to Bank. In the event that any such prepayment shall be made by the
Borrower, the amount thereof shall be applied first to accrued interest and
thereafter to principal.
<PAGE>   9

     At the option of the Bank, this Note shall become immediately due and
payable in full, without further demand or notice, if any installment of
principal or interest is not paid when due hereunder or upon the occurrence of
any other Event of Default under the terms hereof, of the Loan Agreement, or of
any other Loan Document.

     The holder may impose upon the Borrower a delinquency charge of five
percent (5%) of the amount of the principal and/or interest not paid on or
before the tenth (10th) day after such installment is due. The entire principal
balance hereof, together with accrued interest, shall after maturity, whether by
demand, acceleration or otherwise, bear interest at the contract rate of this
Note plus an additional five percent (5%) per annum.

     The Borrower grants to Bank the right to set off and apply, upon an Event
of Default and without demand or notice of any nature, all, or any portion, of
deposits, credits and other property now or hereafter due from the holder to the
Borrower, against the indebtedness evidenced by this Note.

     The Borrower agrees to pay on demand all reasonable out-of-pocket costs of
collection hereof, including reasonable attorneys' fees, whether or not any
action is instituted by the holder in its discretion.

     No delay or omission on the part of the holder in exercising any right,
privilege or remedy shall impair such right, privilege or remedy or be construed
as a waiver thereof or of any other right, privilege or remedy. No waiver of any
right, privilege or remedy or any amendment to this Note shall be effective
unless made in writing and signed by the holder. Under no circumstances shall an
effective waiver of any right, privilege or remedy on any one occasion
constitute or be construed as a bar to the exercise of or a waiver of such
right, privilege or remedy on any future occasion.

     The acceptance by the holder hereof of any payment after any default
hereunder shall not operate to extend the time of payment of any amount then
remaining unpaid hereunder or constitute a waiver of any rights of the holder
hereof under this Note.

     All rights and remedies of the holder, whether granted herein or otherwise,
shall be cumulative and may be exercised singularly or concurrently.

     The Borrower hereby waives, to the fullest extent permitted by law,
presentment, notice, and protest. Borrower assents to any extension of the time
of payment or any other indulgence.

     This Note and the provisions, hereof shall be binding upon the Borrower and
the Borrower's successors and assigns and shall inure to the benefit of and
shall bind the holder, the holder's heirs, administrators, executors,
successors, legal representatives and assigns.

     The word "holder" as used herein shall mean the payee or endorsee of this
Note who is in possession of it, or the bearer, if this Note is at the time
payable to the bearer.
<PAGE>   10

     This Note may not be amended, changed or modified in any respect except by
a written document which has been executed by each party. This Note constitutes
a New Hampshire contract to be governed by the laws of such state and to be paid
and performed therein.

     This Note is executed and delivered in replacement of, but not in novation
or discharge of, the Revolving Line of Credit Promissory Note of WPI Group,
Inc., WPI Electronics, Inc., WPI Magnetec, Inc., WPI Micro Palm, Inc., WPI Power
Systems, Inc., WPI Termiflex, Inc., WPI Micro Processor Systems, Inc., and WPI
DecisionKey, Inc., payable to the order of the Bank in the principal amount of
Thirty Million Dollars ($30,000,000.00) dated July 12, 1996, as amended to date
(collectively, as amended, the "Old Note"). All references to the Old Note in
the Loan Agreement or any other Loan Document shall be deemed to refer to this
Note.


     Executed and delivered this 27th day of February, 1997.


WITNESSES:                                BORROWER:

                                          WPI GROUP, INC.


/s/ Michael Tule (to all)                 By:/s/ Michael Foster
-----------------------------                ------------------
                                             Michael Foster, Chairman



                                          WPI POWER SYSTEMS, INC.


                                          By:/s/ Michael Foster
-----------------------------                ------------------    
                                             Michael Foster, Chairman




                                          WPI MAGNETEC, INC.


                                          By:/s/ Michael Foster
-----------------------------                ------------------    
                                             Michael Foster, Chairman



<PAGE>   11



                                          WPI ELECTRONICS, INC.


                                          By:/s/ Michael Foster
-----------------------------                ------------------    
                                             Michael Foster, Chairman


                                          WPI TERMIFLEX, INC.


                                          By:/s/ Michael Foster
-----------------------------                ------------------    
                                             Michael Foster, Chairman



                                          WPI MICRO PALM, INC.


                                          By: /s/ Michael Foster
-----------------------------                ------------------    
                                             Michael Foster, Chairman



                                          WPI PROCESSOR SYSTEMS, INC.


                                          By:/s/ Michael Foster
-----------------------------                ------------------    
                                             Michael Foster, Chairman



                                          WPI DECISIONKEY, INC.


                                          By:/s/ Michael Foster
-----------------------------                ------------------    
                                             Michael Foster, Chairman


                                          WPI GROUP (U.K.)


                                          By:/s/ Michael Foster
-----------------------------                ------------------    
                                             Michael Foster, Chairman


<PAGE>   12


                                          WPI OYSTER TERMINALS LIMITED


                                          By:/s/ Michael Foster
-----------------------------                ------------------    
                                             Michael Foster, Chairman


                                          WPI UK HOLDING, INC.


                                          By: /s/ Michael Foster
-----------------------------                ------------------    
                                             Michael Foster, Chairman


                                          WPI UK HOLDING II, INC.


                                          By:/s/ Michael Foster
-----------------------------                ------------------    
                                             Michael Foster, Chairman


                                          WPI OYSTER TERMINALS, INC.


                                          By:/s/ Michael Foster
-----------------------------                ------------------    
                                             Michael Foster, Chairman