AMENDMENT NO. 4

                                       TO

                              AMENDED AND RESTATED
               REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT

                  THIS  AMENDMENT  NO. 4  ("Amendment")  is  entered  into as of
August 2, 1996,  by and among  BRIDGEPORT  MACHINES,  INC.  ("BMI"),  BRIDGEPORT
MACHINES LIMITED ("BML") and BRIDGEPORT  MACHINES GmbH ("BMG") (BMI, BML and BMG
each, a "Borrower" and jointly and  severally,  the  "Borrowers");  IBJ SCHRODER
BANK & TRUST COMPANY  ("IBJS"),  GENERAL ELECTRIC CAPITAL  CORPORATION  ("GECC")
(IBJS and GECC each, a "Lender" and jointly and severally,  the "Lenders");  and
IBJS, as agent for the Lenders (in such capacity, the "Agent").

                                   BACKGROUND

                  BMI,  BML,  Lenders  and Agent are  parties to an Amended  and
Restated  Revolving  Credit,  Term  Loan  and  Security  Agreement,  dated as of
December  23,  1994,  as amended by  Amendment  No. 1 to  Amended  and  Restated
Revolving Credit, Term Loan and Security Agreement,  dated as of March 31, 1995,
Consent and Amendment No. 2 to Amended and Restated Revolving Credit,  Term Loan
and Security Agreement dated as of May 31, 1995, an Amended and Restated Consent
and  Amendment  No. 2 to Amended and Restated  Revolving  Credit,  Term Loan and
Security  Agreement  dated as of June 28, 1995 and an Amendment No. 3 to Amended
and Restated  Revolving  Credit,  Term Loan and Security  Agreement  dated as of
November  30, 1995 (as same may be further  amended,  supplemented  or otherwise
modified  from time to time,  the "Loan  Agreement"),  pursuant to which Lenders
provide BMI and BML with certain financial accommodations.

                  BMI and BML have  requested that Lenders add BMG as a Borrower
and provide BMG with a Term Loan of Seven  Million  Three  Hundred  Seventy Five
Thousand  Deutschmarks  and  Lenders  are  willing  to do so on  the  terms  and
conditions hereafter set forth.

                  NOW,  THEREFORE,  in  consideration  of any loan or advance or
grant of credit  heretofore or hereafter made to or for the account of Borrowers
by  Lenders,  and for other good and  valuable  consideration,  the  receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

         1.  Definitions.  All  capitalized  terms not otherwise  defined herein
shall have the meanings given to them in the Loan Agreement.

         2.  Amendments  to  Loan  Agreement.  Subject  to  satisfaction  of the
conditions precedent set forth in Section 4 below:

             (a) The  following  definitions  are hereby added to Section 1.2 of
the Loan Agreement in appropriate alphabetical order:

         "BMG Term Loan"  shall mean the term loan made by Lenders to BMG on the
effective date of the Fourth Amendment in the original principal amount of Seven
Million Three Hundred Seventy Five Thousand Deutschmarks.

         "Borrowing  Agent"  shall have the meaning  given to it in Section 15.1
hereof.

         "Deutschmark" shall mean lawful money of the Republic of Germany.
<PAGE>
         "Deutschmark  Loans"  shall  mean  the BMG  Term  Loan  and  any  other
financial   accommodation  that  may  in  the  future  be  provided  to  BMG  in
Deutschmarks.

         "Fixed Rate" shall mean an interest rate per annum equal to 7.345%.

         "Fixed Rate Loan" shall mean any Loan that bears  interest at the Fixed
Rate.

         "Fourth  Amendment"  shall mean Amendment No. 4 to Amended and Restated
Revolving  Credit,  Term Loan and Security  Agreement dated as of August 2, 1996
among Borrowers, Lenders and Agent.

         "Fourth  Amendment  Effective  Date"  shall mean August 2, 1996 or such
other  date on which  the  conditions  set  forth  in  Section  4 of the  Fourth
Amendment shall have been satisfied in the reasonable opinion of the Lenders.

             (b) The following  definitions in Section 1.2 of the Loan Agreement
are hereby amended in their entirety to read as follows:

                  (i)  "Eurodollar  Revolving  Interest  Margin"  for  Revolving
             Advances  consisting of Sterling  Loans and Domestic Loans shall be
             two percent (2.00%).

                  (ii)  "Eurodollar  Term Loan Interest  Margin" for  Eurodollar
             Rate Domestic Term Loans and Eurodollar  Rate U.K. Term Loans shall
             be two and one quarter percent (2.25%).

                  (iii)  "Loans"  shall mean,  jointly and  severally,  Domestic
             Loans, Sterling Loans and the Deutschmark Loan.

                  (iv) "Term Loans" shall mean the BMI Term Loan, BML Term Loan,
             Additional  BMI Term  Loan,  Additional  BML Term Loan and BMG Term
             Loan.

             (c) The  definition  of "Dollar  Equivalent"  is hereby  amended by
adding "or Deutschmark" after "Sterling" wherever "Sterling" appears.

             (d) The  definition  "GAAP" is hereby  amended by deleting  "in the
United  States of  America"  and  inserting  "of the  country of domicile of the
applicable Borrower" in its place and stead.

             (e) The definition of "Guarantors" is hereby amended by adding "and
BMG" after "BML" on the second line thereof.

             (f) The  definition of "Interest  Rate" is hereby amended by adding
the  following at the end  thereof:  "and (f) the Fixed Rate with respect to the
BMG Loan."

             (g) The  definition of "Maximum  Loan Amount" is hereby  amended by
deleting  "Forty-Five Million Seven Hundred Thousand Dollars  ($45,700,000)" and
inserting  "Forty Nine Million Five Hundred  Eighty Three Thousand Three Hundred
Thirty Six Dollars ($49,583,336.00)" in its place and stead.

             (h) The  definition of "Sterling  Equivalent"  is hereby amended by
adding "or  Deutschmark  Amount" after "Dollar Amount" in the third line thereof
and by adding "or Deutschmark" after "U.S. Dollars" in the fifth line thereof.
<PAGE>
             (i) All references to "each Borrower", "any Borrower",  "Borrowers"
or  "Borrowers'"  in Sections  2.2(f),  4.2, 4.3, 4.4, 4.5, 4.6, 4.9 (second and
third sentence only),  4.11, 4.12, 4.15, 4.16, 4.17,  5.5(b) and 9.2 of the Loan
Agreement  and/or  in the  definitions  of  Collateral  are  hereby  amended  by
inserting  "(other  than  BMG)" or  "(other  than  BMG's)",  as the case may be,
immediately after such word(s).

             (j)  Section  2.1(c) the Loan  Agreement  is hereby  amended in its
entirety to provide as follows:

                  (c)  Conversions;  Several  Obligations.  In  determining  the
             amount of Advances  outstanding,  the amount of any Sterling  Loans
             and Deutschmark  Loans outstanding shall be converted to the Dollar
             Equivalent  of such  amount on the date of any such  determination.
             The Advances may be either Deutschmark Loans to BMG, Domestic Loans
             to BMI or Sterling  Loans or Loans in Dollars to BML.  Each Advance
             made by Agent  shall  be made and  maintained  at  Agent's  Lending
             Office for Sterling Loans,  Deutschmark Loans or Domestic Loans, as
             the case may be. No  Borrower  shall be liable for  Advances  to or
             other  Obligations of the other  Borrowers  except  pursuant to any
             Guaranty.

             (k)  Section  2.5(a) of the Loan  Agreement  is hereby  amended  by
deleting the last sentence  thereof and inserting the following in its place and
stead:

                  "The  Term  Loans  shall be due and  payable  as  provided  in
             Sections 2.13 through 2.15 hereof and in the Term Loan Notes.

             (l) A new Section  2.15 is hereby added to the Loan  Agreement  and
shall read as follows:

                  "2.15. BMG Term Loan.  Subject to the terms and conditions set
             forth in the  Fourth  Amendment,  each  Lender,  severally  and not
             jointly,  shall make  available such Lender's  Domestic  Commitment
             Percentage  of the BMG Term Loan to BMG. The BMG Term Loan shall be
             payable,  with respect to principal,  in equal consecutive  monthly
             installments  aggregating Deutschmarks equal to one-sixtieth of the
             original  amount of the BMG Term Loan per month,  commencing on the
             last day of the month immediately  following the month in which the
             Fourth  Amendment  Effective  Date  occurs,  except  that the final
             installment shall be in the amount of the balance thereof and shall
             be due on the expiration of the Term,  subject to acceleration upon
             the  occurrence  of a  Default  or  Event  of  Default  under  this
             Agreement or termination of this Agreement.

             (m)  Section  3.7 is hereby  amended  by adding  "or any Fixed Rate
Loan" immediately  following (i) "Agreement" on the second line of subclause (a)
and (ii) "Documents" on the third line of subclause (c).

             (n)  Section  3.10  is  hereby   amended  by  adding  "and/or  BMG"
immediately following "BML" in each place it appears in such Section.

             (o)  Section  4.1 of the Loan  Agreement  is hereby  amended in its
entirety to provide as follows:
<PAGE>
                  "4.1.  Security  Interest in the Collateral.  BMI and BML each
             hereby  acknowledge,  confirm  and agree that as  security  for the
             Obligations (including, without limitation, any Guaranty) Agent has
             and shall continue to have for the ratable benefit of the Lenders a
             continuing  security interest and fixed and floating charges in, on
             or to, all the Collateral heretofore granted,  whether now owned or
             existing or hereafter acquired or arising and wheresoever  located.
             Each Borrower,  to the extent applicable,  shall mark its books and
             records as may be necessary or appropriate to evidence, protect and
             perfect as may be necessary or appropriate to evidence, protect and
             perfect  Agent's  security  interest and shall cause its  financial
             statements to reflect such security interest.

             (p) The fourth  sentence of Section  4.13 of the Loan  Agreement is
hereby amended in its entirety to read as follows:

                  "The amount of any payment by Agent  under this  Section  4.13
             shall  be,  in  case  of  BMI or  BML,  charged  to the  applicable
             Borrower's  account  as  a  Revolving  Advance  and  added  to  the
             Obligations,  until  such  Borrower  shall  furnish  Agent  with an
             indemnity  therefor (or supply Agent with evidence  satisfactory to
             Agent that due  provision  for the payment  thereof has been made),
             Agent  may hold  without  interest  any  balance  standing  to such
             Borrower's  credit and Agent shall retain its security  interest in
             any and all  Collateral  held by Agent or, in the case of BMG, paid
             by BMG to Agent immediately upon demand therefor by Agent."

             (q) Section 6.6 of the Loan Agreement is hereby amended by deleting
"1.5" and inserting "1.25" in its place and stead.

             (r) A new Section 6.14 to the Loan Agreement is hereby added to the
Loan Agreement to provide as follows:

                  "6.14 BMG  Collateral.  In the event that two (2)  consecutive
             Borrowing  Base  Certificates   delivered  by  Borrowers  to  Agent
             pursuant to Section 9.2 hereof  indicate that the amount of Undrawn
             Availability   (for  the  purposes  hereof,   clause  (a)  of  such
             definition  shall be deemed to be only "the Formula Amount" without
             application  of  the  dollar  limitations  set  forth  in  Sections
             2.1(a)(iii) and (iv)) shall be less than  $5,000,000,  then BMI and
             BML shall cause BMG,  within  thirty (30) days  thereafter,  to (x)
             grant a lien and/or security interest in its Equipment to Agent for
             the ratable  benefit of Lenders  subject only to the statutory lien
             in favor of the  landlord of BMG's  premises  in Kempten,  Germany;
             provided,  however,  BMG agrees to use its best efforts to obtain a
             waiver and/or  subordination  of such landlord's  statutory lien on
             terms and conditions acceptable to Lenders, (y) execute and deliver
             any and all documents and  instruments  requested by Agent to cause
             such lien and/or  security  interest to be  properly  perfected  in
             accordance with the provisions of German law, all at the expense of
             Borrowers;  provided,  that  Borrowers  obligations  for any  legal
             expenses  incurred by Agent and/or Lenders in connection  therewith
             shall not exceed $35,000.

             (s)  Section  15.1 of the  Loan  Agreement  is  hereby  amended  by
inserting "(BMI in such capacity,  the "Borrowing Agent") immediately  following
"hereunder" on the sixth line thereof.
<PAGE>
             (t)  Section   16.1(b)  is  hereby  amended  by  adding  "and  BMG"
immediately following "BML" in each place that it appears.

             (u) The address for Seeley & Berglass in Section  16.6(c) is hereby
amended to read
as follows:

                   3695 Post Road
                   Southport, Connecticut 06490 

             (v) The notice  parties for BMI and the  telephone  and  telecopier
numbers for BMI are hereby amended to read as follows:

                   Attention: Walter Lazarcheck
                              Yvonne Megenis
                  Telephone:  (203) 337-8511
                  Telecopier: (203) 337-8339 

             (w) Notwithstanding  anything to the contrary contained in Sections
9.7, 9.8 or 9.9 of the Loan  Agreement,  all  financial  statements  provided to
Agent  pursuant  to such  sections  shall be prepared  in  accordance  with GAAP
applicable to BMI.

             (x)  Notwithstanding  anything to the contrary contained in Section
16.5 of the Loan  Agreement,  BMG shall be obligated to indemnify Agent and each
Lender only for liabilities,  obligations,  losses, damages, penalties, actions,
judgments,  suits, costs,  expenses and disbursements imposed on, incurred by or
asserted  against  Agent  or any  Lender  in  connection  with  any  litigation,
proceeding or  investigation  instituted or conducted by any Person with respect
to any  transaction  contemplated  by,  referred  to in, or  related  to,  BMG's
Obligations under the Agreement.

         3. Consents. Lenders hereby consent to the payment of a dividend by BML
to BMI during the period  commencing on the Fourth Amendment  Effective Date and
ending on the first  anniversary  date  thereof  in an  aggregate  amount not to
exceed  (pound)3,000,000  as long as (i) no notice of termination with regard to
this  Agreement  shall  be  outstanding,  (ii) no Event of  Default  shall  have
occurred and be continuing  and (iii) after giving effect to any such payment no
Event of Default shall exist. At the written direction of BMG, the Lenders shall
advance  the  proceeds  of the BMG Term  Loan  directly  to BML in the  Sterling
Equivalent of the BMG Term Loan.

         4. Conditions  Precedent.  This Amendment  shall become  effective upon
satisfaction of the following conditions precedent:

             (a) This  Amendment  shall have been  executed by the Lenders,  the
Borrowers,  and the Guarantor, in four counterparts,  with executed counterparts
delivered to each of the parties.

             (b)  Agent  shall  have   received  a  Guaranty  from  BMI  of  the
Obligations of BMG, which Guaranty will be in form and substance satisfactory to
Agent.

             (c) Agent shall have  received  opinions of counsel to BMI, BML and
BMG indicating  that the  transactions  contemplated by this Amendment have been
properly authorized, and that the documents executed and delivered in connection
therewith  are the legal,  valid,  and  binding  obligations  of the  respective
signatories.
<PAGE>
             (d) Agent  shall have  received an  amendment  fee of $18,750 to be
shared equally by the Lenders.

         5. Representations and Warranties.

             (a) Borrowers hereby represent and warrant as follows:

                  (i) This Amendment and the Loan Agreement,  as amended hereby,
             constitute  legal,  valid and binding  obligations of Borrowers and
             are  enforceable   against   Borrowers  in  accordance  with  their
             respective terms.

                  (ii) On the Fourth Amendment  Effective Date, BMG shall become
             a Borrower under the Loan Agreement and Borrowers  hereby  reaffirm
             all  covenants,  representations  and  warranties  made in the Loan
             Agreement  to the extent the same are not amended  hereby and agree
             that all such covenants,  representations  and warranties  shall be
             deemed to have been  remade as of the  Fourth  Amendment  Effective
             Date.

                  (iii) No Event of  Default  or  Default  has  occurred  and is
             continuing or would exist after giving effect to this Amendment.

                  (iv) Borrowers have no knowledge of any facts which would form
             the basis for any defense,  counterclaim  or offset with respect to
             the Loan Agreement.

             (b) Lenders  hereby  represent and warrant that this  Amendment and
the Loan  Agreement,  as amended  hereby,  constitute  legal,  valid and binding
obligations of Lenders and are  enforceable  against  Lenders in accordance with
their respective terms.

         6. Effect on the Loan Agreement.

             (a) On the Fourth  Amendment  Effective Date, each reference in the
Loan Agreement to "this Agreement,"  "hereunder," "hereof," "herein" or words of
like  import  shall mean and be a  reference  to the Loan  Agreement  as amended
hereby.

             (b) Except as specifically amended herein, the Loan Agreement,  and
all other  documents,  instruments and agreements  executed and/or  delivered in
connection  therewith,  shall  remain in full force and  effect,  and are hereby
ratified and confirmed.

             (c) The  execution,  delivery and  effectiveness  of this Amendment
shall not  operate as a waiver of any  right,  power or remedy of  Lenders,  nor
constitute  a waiver  of any  provision  of the  Loan  Agreement,  or any  other
documents,  instruments  or agreements  executed  and/or  delivered  under or in
connection therewith.

         7. Governing Law. This Amendment shall be binding upon and inure to the
benefit of the parties  hereto and their  respective  successors and assigns and
shall be governed by and construed in  accordance  with the laws of the State of
New York.

         8. Headings. Section headings in this Amendment are included herein for
convenience  of reference only and shall not constitute a part of this Amendment
for any other purpose.
<PAGE>
         9.  Counterparts.  This Amendment may be executed by the parties hereto
in one or more counterparts, each of which shall be deemed to be an original and
all of which  taken  together  shall be  deemed to  constitute  one and the same
agreement.

         IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first written
above.

                                           BRIDGEPORT MACHINES, INC.,
                                           as Borrower and Guarantor

                                       By: _______________________________
                                     Name:  
                                    Title:

                                           BRIDGEPORT MACHINES LIMITED,
                                           as Borrower

                                       By:  _______________________________
                                     Name:
                                    Title:

                                           BRIDGEPORT MACHINES, GmbH,
                                           as Borrower

                                       By: _______________________________
                                     Name
                                    Title:

                                           IBJ SCHRODER BANK & TRUST COMPANY,
                                           as Lender and as Agent

                                       By:  _______________________________
                                     Name: 
                                    Title:

                                           GENERAL ELECTRIC CAPITAL CORPORATION,
                                           as Lender

                                       By: _______________________________
                                     Name:
                                    Title: