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                                                                   EXHIBIT 10.12


                               THIRD AMENDMENT TO
                                CREDIT AGREEMENT

                 THIS THIRD AMENDMENT TO CREDIT AGREEMENT (the "Amendment"),
dated and effective as of August 19, 1996, is made by and between MICRODYNE
CORPORATION, a Maryland corporation (the "Borrower"), CRESTAR BANK and NBD BANK
(the "Banks"), and CRESTAR BANK ("Crestar") as agent (the "Agent") for the
Banks.

                                    RECITALS

                 The Borrower, the Banks and the Agent are parties to a Credit
Agreement, dated as of January 27, 1995, and amended by the First Amendment to
Credit Agreement, dated as of October 26, 1995, and the Second Amendment Credit
Agreement, dated as of June 30, 1996 (as further amended, modified or
supplemented from time to time, the "Agreement").  Terms defined in the
Agreement shall have the same defined meanings when such terms are used in this
Amendment.

                 The Borrower, the Agent and the Banks have agreed to amend
certain provisions of the Agreement.  Accordingly, for valuable consideration,
the receipt and sufficiency of which are acknowledged, the Borrower, the Banks
and the Agent agree as follows:

                 1.       The following definition is added to Section 1.1 of
the Agreement:

                                  "Mortgage" means a Mortgage, in form and 
                 substance acceptable to the Banks, creating a lien against 
                 the land, buildings and fixtures located at 491 Oak Road, 
                 Ocala, Florida, as the same may be amended, modified or
                 supplemented from time to time.  The Mortgage shall be a Loan
                 Document, as defined in this Agreement.

                 2.       The following definitions contained in Section 1.1
of the Agreement are deleted in their entirety and replaced with the following
provisions:

                                  "Advance Commitment" means $13,884,000 in 
                 the case of Crestar and $6,116,000 in the case of NBD; 
                 provided, however that each Bank's Advance Commitment shall be 
                 reduced automatically by its Commitment Percentage of any 
                 Maximum Amount reduction resulting from a prepayment of the 
                 Advances pursuant to Section 2.10(e).

                                  "Maximum Amount" means, with respect to the 
                 Advances, $20,000,000; provided, however, that the applicable 
                 Maximum Amount on any date
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                 shall be further reduced by the amount of the prepayment of
                 the Advances required by Section 2.10(e) of this Agreement.

                                  "Termination Date" means September 19, 1996, 
                 any earlier date of termination in whole of the Commitments
                 pursuant to Section 9.1, or any later date if the Termination
                 Date is extended in the sole discretion of the Banks in
                 accordance with Section 2.4.

                 3.       Section 2.l(a) is deleted in its entirety and
replaced with the following:

                 "Subject to the terms and conditions of this Agreement, each
                 Bank severally may make Advances to the Borrower from time to
                 time until the Termination Date in an aggregate amount not to
                 exceed at any time outstanding such Bank's Advance Commitment.
                 The aggregate outstanding amount of Advances shall not exceed
                 the Maximum Amount at any time, unless the Banks, in their
                 sole discretion elect to make Advances in excess of such
                 limit, which Advances, if made, shall be subject to the terms
                 of this Agreement.  All Advances will be made from time to
                 time in the sole discretion of the Banks, and this Agreement,
                 the making of any Advance or any other action by any Bank
                 shall not obligate the Banks to make further Advances to the
                 Borrower.  The Borrower acknowledges and agrees that the Banks
                 may decline to make an Advance for any reason, even if no
                 Default or Event of Default has occurred and if the Borrower
                 is in compliance with all of the terms and conditions of this
                 Agreement.  By close of business on Tuesday of each week prior
                 to the Termination Date, Borrower shall prepare and deliver to
                 the Agent a weekly cash projection showing Borrower's
                 projected receipts, disbursements, and Advance requests for
                 the next seven calendar days.  Subject to the foregoing,
                 within the limits of each Bank's Advance Commitment and up to
                 the Maximum Amount, the Borrower may borrow, prepay pursuant
                 to Section 2.10 and reborrow hereunder from the date of this
                 Agreement until the Termination Date."

                 4.       The following provisions are added to the end of
Article 4:

                          "SECTION 4.4 Mortgage.  As additional security for
                 the Obligations, the Borrower shall use its best efforts to
                 execute, deliver and record the Mortgage in the appropriate
                 land records not later than September 6, 1996, and deliver to
                 the Agent, not later than September 13, 1996, a mortgagee
                 title insurance commitment, issued by a title insurance
                 company acceptable to the Banks, to insure the Lien of the
                 Mortgage as a second Lien, subordinate only to the Lien
                 securing the Industrial Development Revenue Bonds described on
                 Schedule 4 to this Agreement, and containing no exceptions to
                 title that are not acceptable to the Banks in their sole
                 discretion.

                 SECTION 4.5 Cash Collateral Account.  The Borrower agrees that
                 it shall direct all payments on Receivables to a lockbox
                 established with the Agent.  The Borrower also agrees to remit
                 all payments on Receivables received by the Borrower, as well
                 as any



                                      2
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                 other revenues of any kind (including, without limitation, any
                 income tax refunds) received by the Borrower, to the Agent.
                 All of the foregoing payments and revenues shall be remitted
                 or delivered to the lockbox or the Agent, as applicable, in
                 their original form on the date of receipt. All such payments
                 and revenues shall be credited to a cash collateral account
                 over which the Agent shall have the exclusive power of
                 withdrawal.  The Agent shall hold all funds in the cash
                 collateral account as security for the Obligations and is
                 authorized to apply funds in the cash collateral to pay the
                 Obligations from time to time.  The Borrower represents that
                 it does not have an account with any financial institution
                 other than the Agent, save and except those accounts set forth
                 on Schedule A ("Other Accounts"). The Borrower agrees that it
                 shall not establish any other account hereafter without prior
                 written approval of the Agent.  The Borrower further agrees
                 that proceeds of Receivables totalling in excess of $25,000
                 deposited in any Other Account shall be transferred to the
                 cash collateral account established hereunder within 24 hours
                 of such deposit and all other proceeds of Receivables
                 deposited in any Other Account shall be transferred to said
                 cash collateral account within 48 hours of such deposit.  The
                 Borrower shall respond to requests by the Agent for
                 information or documents relating to the Other Accounts and
                 the balances therein within 24 hours of its receipt of each
                 such request."

                 5.       Pursuant to the provisions of Subsection (9) of
Section 7.1(b), the Borrower agrees to provide to the Agent, (a) on each
Business Day on which Receivables are created or collected, or on which
Inventory is purchased, shipped or returned, or on which a credit is issued or
created with respect to a Receivable, a sales journal on a form provided by the
Agent reflecting such activity and the resulting balance of Receivables and
Inventory, and (b) on each Business Day, a summary, by budget category, of all
disbursements in excess of $5,000 made by the Borrower on the immediately
preceding Business Day.

                 6.       Except for the amendments to the Agreement expressly
set forth above, the Agreement and the other Loan Documents shall remain in
full force and effect.  The Borrower acknowledges and agrees that this
Amendment only amends the terms of the Agreement and is not a novation, and the
Borrower ratifies and confirms the remaining terms and provisions of the
Agreement and the other Loan Documents in all respects.  Nothing in this
Amendment shall require the Banks to grant any further amendments to the terms
of the Loan Documents.  Without limiting the generality of the foregoing, the
Borrower acknowledges and agrees that it is obligated to develop a business
plan acceptable to the Banks as required by the August 19, 1996 letter from the
Agent to the Borrower, and that no Advances will be made after September 16,
1996, unless such business plan is received by the Banks.

                 7.       The Borrower acknowledges and agrees that (a) there
are no defenses, counterclaims or setoffs against any of its obligations under
the Loan Documents, and (b) the prior grant of a security interest in the
Collateral created by the Security Agreement and the Patent and Trademark
Assignment continues to secure the Obligations, is in full force and effect,
and is ratified and confirmed by the Borrower in all respects.



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                 8.       The Borrower represents and warrants that this
Amendment has been duly authorized, executed and delivered by it in accordance
with resolutions adopted by its board of directors. All other representations
and warranties made by the Borrower in the Loan Documents are incorporated by
reference in this Amendment and are deemed to have been repeated as of the date
of this Amendment with the same force and effect as if set forth in this
Amendment, except that any representation or warranty relating to any financial
statements shall be deemed to be applicable to the financial statements most
recently delivered to the Banks in accordance with the provisions of the Loan
Documents.

                 9.       The Borrower agrees to pay all costs and expenses
incurred by the Agent and the Banks in connection with this Amendment,
including, but not limited to, reasonable attorneys' fees.

                 10.      This Amendment shall be governed by the laws of the
Commonwealth of Virginia, without reference to conflict of laws principles.

                 11.      This Amendment may be executed by the parties
individually or in any combination, in one or more counterparts, each of which
shall be an original and all of which together constitute one and the same
instrument.



                         [SIGNATURES ON FOLLOWING PAGE]



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                 WITNESS the following signatures.


                           BORROWER:
                           ---------
                         
                           MICRODYNE CORPORATION,
                           a Maryland corporation
                         
                         
                           By:  /s/ PHILIP T. CUNNINGHAM       
                               --------------------------------
                           Name:   Philip T. Cunningham        
                                 ------------------------------
                           Title:  President                   
                                  -----------------------------
                         
                           AGENT:
                           ------
                         
                           CRESTAR BANK
                         
                         
                           By:  /s/ MIRIAM M. SADLER          
                              --------------------------------
                                Miriam M. Sadler
                                Senior Vice President
                         
                           BANKS:
                           ------
                         
                           CRESTAR BANK
                         
                         
                         
                           By:  /s/ MIRIAM M. SADLER        
                               -------------------------------
                                Miriam M. Sadler
                                Senior Vice President
                         
                           NBD BANK
                         
                         
                         
                         
                           By:  /s/ PHILLIP D. MARTIN         
                               -------------------------------
                                Phillip D. Martin
                                Authorized Agent



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<PAGE>   6
                          SCHEDULE A - OTHER ACCOUNTS


<TABLE>
<CAPTION>
        BANK                                         PURPOSE                                          ACCOUNT #  
===================================================================================================================
<S>                                           <C>                                                      <C>
Wells Fargo Bank                              San Jose Petty Cash                                      0491-059366
Barnett Bank                                  Ocala Operating Account                                   1150065051
First Interstate Bank                         Lancaster Petty Cash                                      502628619
Chase Manhattan Bank                          Microdyne Ltd. Account                                   719-1-305783
Royal Bank of Scotland                        UK Division Petty Cash                                     10032563
Royal Bank of Scotland                        UK Division Corporate Account                              10032571
Deutsch Bank                                  German Office Operating Account                           5411160-00
Crestar Bank                                  Flexible Spending Account                                 202258521
</TABLE>