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                                                                Exhibit 10.6

                           FIRST AMENDMENT TO AMENDED
                         AND RESTATED CREDIT AGREEMENT
                         -----------------------------

         THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as
of July 11, 1995 (this "Amendment"), is by and among MONARCH MACHINE TOOL
COMPANY, an Ohio corporation (the "Company"), the BANKS identified on the
signature pages hereof (collectively the "Banks" and individually a "Bank") and
NBD BANK, a Michigan banking corporation, as agent (in such capacity, the
"Agent") for the Banks.

                                  INTRODUCTION
                                  ------------

         The Company, the Banks and the Agent have entered into the Amended and
Restated Credit Agreement, dated as of June 9, 1995 (the "Credit Agreement").
The parties now desire to amend the Credit Agreement on the terms and conditions
herein set forth.

         NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein and in the Credit Agreement contained, the parties hereto
agree as follows:

                   ARTICLE 1. AMENDMENTS TO CREDIT AGREEMENT
                   -----------------------------------------

         1.1 The definition of the term "Borrowing Base" in Section 1.1 of the
Credit Agreement is amended to read in full as follows:

                  "BORROWING BASE" shall mean, as of any date, the sum of (a an
                  amount equal to 80% of the Eligible Accounts Receivable plus
                  (b) an amount equal to 50% of the Eligible Inventory minus (c)
                  the Fifth Third Borrowings.

         1.2 The following definition of the term "Fifth Third Borrowings" is
added to Section 1.1 of the Credit Agreement in its alphabetical location:

         "Fifth Third Borrowings" shall mean, as of any date, the aggregate
         outstanding principal amount Indebtedness of the Company to The Fifth
         Third Bank.

         1.3 Subpart (vi) of Section 5.1(d) of the Credit Agreement is relabeled
as subpart (vii) and a new subpart (vi) of Section 5.1 is inserted reading as
follows:



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                  (vi) On the same day, telephonic notice, followed immediately
         by written confirmation, of all borrowings from time to time by the
         Company from The Fifth Third Bank and all repayments thereof from time
         to time.

         1.4 Section 5.2(m) of the Credit Agreement is amended to read in full
as follows:

                  (m) NEGATIVE PLEDGE LIMITATION. Enter into any agreement,
         with any person other than the Banks pursuant hereto, which prohibits
         or limits the ability of the Company or any Subsidiary to create,
         incur, assume or suffer to exist any Lien upon any of its assets,
         rights, revenues or property, real, personal or mixed, tangible or
         intangible, whether now owned or hereafter acquired; PROVIDED that this
         Section 5.2(m) shall not prohibit the Company from entering into such
         an agreement with The Fifth Third Bank, so long as the aggregate
         principal amount of Indebtedness of the Company to The Fifth Third Bank
         does not at any time exceed $7,500,000.

         1.5 AMENDMENT OF EXHIBIT E. Exhibit E annexed to the Credit Agreement
is deleted in its entirety and Exhibit E annexed to this Amendment shall be
deemed substituted in place thereof.

                   ARTICLE 2. REPRESENTATIONS AND WARRANTIES
                   -----------------------------------------

         In order to induce the Banks and the Agent to enter into this
Amendment, the Company represents and warrants that:

         2.1 The execution, delivery and performance by the Company of this
Amendment are within its corporate powers, have been duly authorized by all
necessary corporate action and are not in contravention of any law, rule or
regulation, or any judgment, decree, writ, injunction, order or award of any
arbitrator, court or governmental authority, or of the terms of the Company's
charter or by-laws, or of any contract or undertaking to which the Company is a
party or by which the Company or its property is or may be bound or affected.

         2.2 This Amendment is a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.

         2.3 No consent, approval or authorization of or declaration,
registration or filing with any governmental authority or any nongovernmental
person or entity, including without limitation any creditor or stockholder of
the Company, is required on the part of the Company in connection with the
execution, delivery and performance of this Amendment or the transactions
contemplated hereby or as a condition to the legality, validity or
enforceability of this Amendment.

                                       -2-

          [First Amendment to Amended and Restated Credit Agreement]



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         2.4 After giving effect to the amendments contained in Article 1 of
this Amendment, the representations and warranties contained in Article IV of
the Credit Agreement are true on and as of the date hereof with the same force
and effect as if made on and as of the date hereof.

                            ARTICLE 3. MISCELLANEOUS
                            ------------------------

         3.1 If the Company shall fail to perform or observe any term, covenant
or agreement in this Amendment, or any representation or warranty made by the
Company in this Amendment shall prove to have been incorrect in any material
respect when made, such occurrence shall be deemed to constitute an Event of
Default.

         3.2 All references to the Credit Agreement in any other document,
instrument or certificate referred to in the Credit Agreement or delivered in
connection with or pursuant thereto, hereafter shall be deemed references to the
Credit Agreement, as amended hereby.

         3.3 Subject to the amendments herein provided, the Credit Agreement
shall in all respects continue in full force and effect.

         3.4 Capitalized terms used but not defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement.

         3.5 This Amendment shall be governed by and construed in accordance
with the laws of the State of Michigan.

         3.6 The Company agrees to pay the reasonable fees and expenses of
Dickinson, Wright, Moon, Van Dusen & Freeman, counsel for the Agent, in
connection with the negotiation and preparation of this Amendment and the
consummation of the transactions contemplated hereby, and in connection with
advising the Agent as to its rights and responsibilities with respect thereto.

         3.7 This Amendment may be executed upon any number of counterparts with
the same effect as if the signatures thereto were upon the same instrument.



                     [THIS SPACE INTENTIONALLY LEFT BLANK.]

                                      -3-

          [First Amendment to Amended and Restated Credit Agreement]



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         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered on the 11th day of July, 1995, notwithstanding the
day and year first-above written.


                                     THE MONARCH MACHINE TOOL COMPANY

                                     By: /s/ Robert B. Riethman
                                        ------------------------
                                        Its: Treasurer
                                            --------------------

                                     NBD BANK, as a Bank and as the Agent

                                     By: /s/ Victoria L. Decker
                                        ------------------------
                                        Its: Vice President
                                            --------------------

                                     STAR BANK, N.A.

                                     By: Thomas D. Gill
                                        ------------------------
                                        Its: Vice President
                                            --------------------



                                       -4-

          [First Amendment to Amended and Restated Credit Agreement]

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      [EXHIBITS A THROUGH D TO THE FIRST AMENDMENT INTENTIONALLY OMITTED.]





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                                   EXHIBIT E

                           BORROWING BASE CERTIFICATE

                                     [Date]




NBD Bank, as Agent
611 Woodward Avenue
Detroit MI 48226
Attention: Midwest Banking Division

         Reference is made to the Amended and Restated Credit Agreement dated as
of June 9, 1995, as amended by the First Amendment to Amended and Restated
Credit Agreement dated as of July 11, 1995, and as further amended,
supplemented, extended or otherwise modified from time to time (the "Credit
Agreement"), among The Monarch Machine Tool Company, an Ohio corporation (the
"Company"), the banks parties thereto (the "Banks") and you as agent for the
Banks (the "Agent"). Capitalized terms used but not defined herein shall have
the respective meanings assigned to them in the Credit Agreement.

         The Company hereby represents and warrants to the Agent and the Banks
that the following computations of the Borrowing Base, and the related
supporting schedules attached hereto, and of the mandatory prepayment required
pursuant to Section 3.1(d) of the Credit Agreement are true and correct as of
the close of business on __________ , 19___ and are in conformity with the terms
and conditions of the Credit Agreement:

                                 Borrowing Base
                                 --------------

1.       Accounts Receivable:

         (a)      Aggregate Accounts Receivable              $________

         (b)      Less: Ineligible Accounts Receivable       $________

         (c)      Eligible Accounts Receivable               $________

         (d)      80% of Eligible Accounts Receivable        $________

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<TABLE>
<CAPTION>

2.       Inventory:

                   <S>                                             <C>
                  (a)      Aggregate Inventory                     $________

                  (b)      Less: Ineligible Inventory              $________

                  (c)      Eligible Inventory                      $________

                  (d)      50% of Eligible Inventory               $________

3.       Aggregate principal amount of Indebtedness
           of the Company to The Fifth Third Bank                  $________

4.       Borrowing Base (item 1(d) plus item 2(d) minus item 3)    $
                                                                    ========

                    Determination of Mandatory Prepayment
                    -------------------------------------

1.       Aggregate Borrowing Base (item 4 above)                   $________

2.       Less: Dollar Equivalent of aggregate principal
           amount of Loans outstanding                             $________

3.       Excess (or deficiency) in Borrowing Base
           (if deficiency, prepayment required in amount
           of deficiency)                                          $
                                                                    ========
</TABLE>

         The Company hereby further represents and warrants to the Banks that as
of the close of business on ___________ 19___:

         A. The representations and warranties contained in Article IV of the
Credit Agreement are true and correct on and as of such date, as if such
representations and warranties were made on and as of such date. For purposes of
this certificate the representations and warranties contained in Section 4.6 of
the Credit Agreement shall be deemed made with respect to both the financial
statements referred to therein and the most recent financial statements
delivered pursuant to Sections 5.1(d)(ii) and (iii) of the Credit Agreement.

         B. No Event of Default and no Default has occurred and is continuing.

                                             THE MONARCH MACHINE TOOL COMPANY

                                             By: ______________________________

                                               Its: ___________________________



                           BORROWING BASE CERTIFICATE

                                      -2-








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                     Amended and Restated Credit Agreement
                            dated as of June 9, 1995
                                  by and among
                       The Monarch Machine Tool Company,
                           NBD Bank, Star Bank, N.A.,
                                      and
                               NBD Bank, as Agent

                               Closing Item List
                               -----------------

1.       Amended and Restated Credit Agreement, with Exhibits A through E and
         Schedules 4.4, 4.5, 5.2(d) and 5.2(k) attached

2.       Revolving Credit Notes

3.       Closing Certificate of the Company with respect to charter documents
         and resolutions

4.       Environmental Certificate (1992; referenced in Section 4.13 of the
         Amended and Restated Credit Agreement)

5.       Legal Opinion