Document:

<PAGE>   1

                                  EXHIBIT 10.44

                            AMENDMENT AGREEMENT NO. 3

                          dated as of January 31, 2001

                                 to that certain

                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

        This AMENDMENT AGREEMENT NO. 3 (this "Amendment"), dated as of January
31, 2001, is by and among (a) TransTechnology Corporation ("TransTechnology"),
TransTechnology Seeger-Orbis GmbH ("GmbH") and TransTechnology (GB) Limited
("Limited", together with TransTechnology and GmbH, the "Borrowers"), (b) Fleet
National Bank ("FNB") and the other lending institutions listed on Schedule 1 to
the Credit Agreement (collectively, the "Lenders"), (c) FNB, acting through its
London Branch, as Sterling Fronting Bank (the "Sterling Fronting Bank"), (d)
BHF-BANK Aktiengesellschaft, as DM Fronting Bank (the "DM Fronting Bank";
together with the Sterling Fronting Bank, the "Fronting Banks"), (e) FNB, as
issuing bank for Letters of Credit (in such capacity, the "Issuing Bank"), (f)
ABN AMRO Bank N.V., as Syndication Agent, (g) Bank One, NA, as Documentation
Agent, and (h) FNB as Administrative Agent for the Lenders, the Fronting Banks
and the Issuing Bank (in such capacity, the "Administrative Agent"). Capitalized
terms used herein unless otherwise defined shall have the respective meanings
set forth in that certain Second Amended and Restated Credit Agreement dated as
of June 30, 1995, and amended and restated as of July 24, 1998, as further
amended and restated as of August 31, 1999, as amended by that certain Consent
and Amendment Agreement No. 1 dated as of August 21, 2000 and as further amended
by that certain Amendment Agreement No. 2 ("Amendment No. 2") dated as of
December 29, 2000 (as so amended and restated, the "Credit Agreement"), to which
the Borrowers, the Lenders and the Administrative Agent are parties.

        WHEREAS, pursuant to the terms of Amendment No. 2, the Lenders and the
Administrative Agent agreed to forbear from (a) exercising their rights and
remedies under the Credit Agreement and the other Loan Documents to collect the
indebtedness of the Borrowers to the Administrative Agent and the Lenders under
the Credit Agreement and the other Loan Documents and (b) ceasing to make
Revolving Credit Loans or International Facility Loans or to issue, extend or
renew Letters of Credit;

        WHEREAS, in accordance with Section 2.3 of the Credit Agreement, the
Borrowers have requested that the Total Revolving Credit Commitment be reduced
to $175,000,000;

        WHEREAS, pursuant to the terms of Amendment No. 2, the forbearance
period will end on January 31, 2001;

<PAGE>   2

                                      -2-

        WHEREAS, the Borrowers have requested that the Lenders and the
Administrative Agent extend such forbearance period; and

        WHEREAS, the Lenders and the Administrative Agent are willing to extend
such forbearance period, but only on the terms and subject to the conditions set
forth herein;

        NOW, THEREFORE, in consideration of the foregoing premises, the parties
hereto hereby agree as follows:

        SECTION 1. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is
hereby amended with effect from the Effective Date (as defined in Section 11
below) as follows:

        (a)     In accordance with the Borrowers' notice given under Section 2.3
of the Credit Agreement to reduce the Total Revolving Credit Commitment to
$175,000,000, Section 1 of the Credit Agreement is hereby amended by deleting
the definition of "Total Revolving Credit Commitment" and substituting in lieu
thereof the following new definition:

                "Total Revolving Credit Commitment. The sum of the Revolving
        Credit Commitments of the Lenders, as in effect from time to time, being
        $200,000,000 on the Closing Date and being reduced to $175,000,000 as of
        January 31, 2001, whereupon the Revolving Credit Commitments of the
        Lenders shall be reduced pro rata on such date in accordance with their
        respective Commitment Percentages."

        (b)     Section 9.4 of the Credit Agreement is hereby amended by
deleting the word "and" from the end of Section 9.4(e), by deleting the period
in Section 9.4(f) and substituting in lieu thereof "; and", and by inserting
after Section 9.4(f) the following new Section 9.4(g):

                "(g) as soon as practicable, but in any event not later than
        Wednesday of each week, (i) a weekly cash flow report for the previous
        week with a comparison to the amount previously projected for such week
        and (ii) a rolling cash forecast for the next thirteen (13) week period,
        all such information in form and with such detail as is reasonably
        satisfactory to the Lenders."

        SECTION 2. RATIFICATION OF EXISTING AGREEMENTS. The Borrowers and the
Guarantors agree that the Obligations of the Borrowers and the Guarantors to the
Administrative Agent and the Lenders as evidenced by or otherwise arising under
the Credit Agreement, the Notes and the other Loan Documents, are, by the
Borrowers' and Guarantors' execution of this Amendment, ratified and confirmed
in all respects. In addition, by the execution of this Amendment, the Borrowers
and Guarantors represent and warrant that no counterclaim, right of set-off or
defense of any kind exists or is outstanding with respect to such Obligations.

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                                      -3-

        SECTION 3. FORBEARANCE AGREEMENT. Subject to the terms and conditions
set forth herein, each of the Administrative Agent and the Lenders agrees to
forbear from (a) exercising their rights and remedies under the Credit Agreement
and the other Loan Documents to collect the indebtedness of the Borrowers to the
Administrative Agent and the Lenders under the Credit Agreement and the other
Loan Documents and (b) ceasing to make Revolving Credit Loans or International
Facility Loans or to issue, extend or renew Letters of Credit until that date
(the "Forbearance Termination Date") which is the earliest to occur of (i) the
failure after the date hereof of the Borrowers and their Subsidiaries to comply
with any of the terms or conditions set forth in the Credit Agreement and/or the
other Loan Documents (as modified by this Amendment), other than the failure to
comply with the provisions of Sections 11.1 - 11.4 of the Credit Agreement for
the period commencing on January 1, 2001 and ending on March 29, 2001 (the
"Specified Defaults"), (ii) the occurrence after the date hereof of any Default
or Event of Default, other than a Specified Default, (iii) the failure of the
Borrowers or their Subsidiaries to comply with any term set forth in this
Amendment, (iv) the date on which the Administrative Agent determines that a
material adverse change in the business, assets, financial condition or
prospects of the Borrowers and their Subsidiaries, taken as a whole, has
occurred, (v) the date that the Borrowers, any of their Subsidiaries or any
Affiliate of the Borrowers shall commence any litigation proceeding against the
Administrative Agent or any Lender or any Affiliate of the Administrative Agent
or any Lender in connection with or related to any of the transactions
contemplated by the Credit Agreement, the other Loan Documents, this Amendment
or any documents, agreements or instruments executed in connection with any of
the foregoing, (vi) the date that any holder of Subordinated Debt takes any
action in enforcement of its rights under such Subordinated Debt, or any "Event
of Default" under and as defined in any instrument evidencing any such
Subordinated Debt shall have occurred, the effect of which would be to permit
the holder of such Subordinated Debt to accelerate such Indebtedness, or (vii)
March 29, 2001. On and after the Forbearance Termination Date, each of the
Administrative Agent and the Lenders shall be free in its sole and absolute
discretion to proceed to enforce any or all of its rights under or in respect of
the Credit Agreement, the other Loan Documents and applicable law, including,
without limitation, (x) the right to require the immediate repayment of the
Loans and the other Obligations in full, (y) the right to require deposit of
cash collateral or the delivery of a letter of credit reasonably satisfactory to
the Administrative Agent in an amount equal to the then Maximum Drawing Amount
of all Letters of Credit in accordance with Section 5.2(c) of the Credit
Agreement, and (z) the right to cease making Revolving Credit Loans or
International Facility Loans, or issuing, extending or renewing Letters of
Credit.

        SECTION 4. COVENANTS. Without any prejudice or impairment whatsoever to
any of the rights and remedies of the Administrative Agent or any Lender
contained in the Credit Agreement or in any other Loan Documents, the Borrowers
covenant and agree with the Administrative Agent and each of the Lenders as
follows:

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                                      -4-

          (a)   Revolver Sublimit. Notwithstanding anything to the contrary
stated in Section 2 of the Credit Agreement, at no time during the period
beginning on the date hereof and ending on the Forbearance Termination Date
shall the Administrative Agent or any of the Lenders be obligated to make or
fund any Revolving Credit Loans if, after the making of such Revolving Credit
Loan, the sum of (i) the outstanding amount of the Revolving Credit Loans (after
giving effect to all amounts requested), (ii) the Maximum Drawing Amount, (iii)
all Unpaid Reimbursement Obligations, and (iv) the International Facility Amount
(such aggregate amount, the "Revolving Facility Usage"), would exceed
$162,000,000 (such amount, the "Revolver Sublimit"). If the Revolving Facility
Usage at any time exceeds the Revolver Sublimit in effect at such time,
TransTechnology shall immediately prepay an amount equal to such excess to the
Administrative Agent for the account of the Lenders and the Administrative
Agent, for application to the outstanding principal amount of the Revolving
Credit Loans. Notwithstanding the foregoing, the Revolving Credit Commitments of
the Lenders shall not be reduced or deemed to be reduced hereby and the
Commitment Fees payable pursuant to Sections 2.2, 3.13 and 3.14 of the Credit
Agreement shall continue to be payable with respect to the aggregate Revolving
Credit Commitments, the Maximum DM Amount and the Maximum Sterling Amount,
respectively.

          (b)   Letters of Credit. Notwithstanding anything to the contrary
stated in Section 5 of the Credit Agreement, at no time during the period
beginning on the date hereof and ending on the Forbearance Termination Date
shall the Issuing Bank be required to issue, extend or renew any Letter of
Credit if, as a result thereof, the Revolving Facility Usage, after giving
effect to such issuance, extension or renewal, would exceed the Revolver
Sublimit in effect at such time.

          (c)   Applicable Margin. Notwithstanding anything to the contrary
stated in the definition of "Applicable Margin" in the Credit Agreement or in
Section 6.11 of the Credit Agreement, between January 1, 2001 and the
Forbearance Termination Date the Applicable Margin in effect with respect to
Base Rate Loans shall be 2.50%, and the Applicable Margin in effect with respect
to Eurocurrency Rate Loans shall be 4.00%; provided that, for the avoidance of
doubt, in the event that any Default or Event of Default occurring or arising
prior to the Forbearance Termination Date is continuing on the Forbearance
Termination Date, the provisions of Section 6.11 of the Credit Agreement shall
apply at such time to the determination of the applicable rate of interest on
the Loans outstanding at such time.

          (d)   Eurocurrency Rate Loans. Notwithstanding anything to the
contrary stated in the definition of "Interest Period" in the Credit Agreement
or in Section 2.7, Section 3.5 or Section 4.5 of the Credit Agreement, between
the Effective Date and the Forbearance Termination Date TransTechnology may
elect to convert any part of the Loans to or maintain any part of the Loans as
Eurocurrency Rate Loans in accordance with the applicable provisions of the
Credit Agreement as in effect as of the Effective Date, so long as the Interest
Periods with respect to any

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                                      -5-

Eurocurrency Rate Loans borrowed, converted or renewed after the Effective Date
do not extend beyond April 5, 2001.

          (e)   Distributions. Notwithstanding anything to the contrary stated
in Section 10.4 of the Credit Agreement, TransTechnology shall not from the date
hereof until the Forbearance Termination Date declare or pay any dividends on or
in respect of, or make any other Distributions on or in respect of, any shares
of the capital stock of TransTechnology.

          (f)   Retention of Consultant; Financial Information. TransTechnology
has engaged Carl Marks Consulting Group LLC as a consultant to work on behalf of
TransTechnology and its Subsidiaries on the implementation of their strategic
plans (the "Consultant"). TransTechnology shall provide to the Administrative
Agent and the Lenders, with the assistance of the Consultant, financial
information regarding TransTechnology and its Subsidiaries required to permit
the Lenders' evaluation of, among other things, the financial covenant levels
applicable to the Borrowers and their Subsidiaries, and which will include, but
not be limited to, thirteen (13) week projections of weekly cash flow (including
receipts, collections and disbursements) updated on a weekly basis.

          (g)   Independent Valuation. The Borrowers agree that (i) the
Administrative Agent and the Lenders shall have the right to retain a third
party advisor to review and validate the financial information being provided to
the Lenders by the Borrowers, (ii) the Administrative Agent and the Lenders
shall have the right to retain a third party investment banker or appraiser to
conduct a business evaluation of the assets of Borrowers and (iii) the Borrowers
will cooperate with all reasonable requests of such advisors and investment
banker or appraiser. The Administrative Agent and the Lenders agree that (A)
they will consult with the Borrowers prior to retaining any third party advisor,
investment banker or appraiser and (B) any third party advisor, investment
banker or appraiser retained by them shall enter into reasonable and customary
confidentiality agreements with the Borrowers.

          (h)   Expenses. The Borrowers shall pay or reimburse on demand the
Administrative Agent and each of the Lenders for all reasonable costs and
expenses the Administrative Agent or such Lender incurs in connection with the
negotiation, execution and delivery of the agreements and transactions
contemplated by this Amendment or which otherwise are required to be paid under
the Loan Documents, including without limitation any reasonable and customary
expenses incurred pursuant to paragraph (g) of this Section 4.

          (i)   Compliance with Loan Documents. The Borrowers and their
Subsidiaries shall comply with all of the terms, covenants and provisions
contained in the Credit Agreement and the other Loan Documents except as such
terms, covenants and provisions are expressly modified by this Amendment upon
the terms set forth herein.

<PAGE>   6

                                       -6-

          (j)   Further Assurances. The Borrowers and their Subsidiaries shall
at any time or from time to time execute and deliver such further instruments
and take such further action as the Administrative Agent may reasonably request
to effect the purposes of this Amendment, the Credit Agreement and the other
Loan Documents.

          (k)   Event of Default; Extension of Forbearance. Any failure by
any of the Borrowers or their Subsidiaries to comply with any provision of this
Section 4 applicable to such Borrower or Subsidiary, or any material breach by
any of the Borrowers of any of their representations and warranties set forth in
Section 6 below, shall constitute an Event of Default; provided that,
notwithstanding anything to the contrary stated in Section 27 of the Credit
Agreement, (i) any waiver of, or agreement to forbear from the exercise of
remedies with respect to or from ceasing to make Loans and Letters of Credit
available as a result of, any Event of Default arising as a result of any breach
of Section 4(a) or Section 4(b) above, (ii) any extension of the Lenders' and
the Administrative Agent's forbearance agreements set forth in Section 3 above
to end on any date following March 29, 2001, and (iii) any amendment to the
provisions of this Section 4(k) or of Section 4(a) or Section 4(b) above shall
in any case require the written consent of Lenders holding at least sixty-six
and two-thirds percent (66 2/3%) of the principal amount of the Revolving Credit
Notes and the Term Notes, taken together, outstanding as of the effective date
of any such waiver, agreement, extension or amendment.

        SECTION 5. CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Amendment shall be conditioned upon the satisfaction of the following conditions
precedent:

        SECTION 5.1. DELIVERY OF DOCUMENTS. This Amendment shall have been
executed and delivered to the Administrative Agent by each of the Borrowers,
each of the Guarantors, and Lenders holding at least sixty-six and two-thirds
percent (66 2/3%) of the principal amount of the Revolving Credit Notes and the
Term Notes, taken together.

        SECTION 5.2. LEGALITY OF TRANSACTION. No change in applicable law shall
have occurred as a consequence of which it shall have become and continue to be
unlawful on the date this Amendment is to become effective (a) for the
Administrative Agent or any Lender to perform any of its obligations under any
of the Loan Documents or (b) for any of the Borrowers to perform any of its
agreements or obligations under any of the Loan Documents.

        SECTION 5.3. PERFORMANCE. Each of the Borrowers shall have duly and
properly performed, complied with and observed in all material respects its
covenants, agreements and obligations contained in the Loan Documents required
to be performed, complied with or observed by it on or prior to the date this
Amendment is to become effective. Except for the Specified Defaults, no event
shall have occurred on or prior to the Effective Date, and be continuing, and no
condition shall exist on the Effective Date, which constitutes a Default or
Event of Default.

<PAGE>   7

                                      -7-

        SECTION 5.4. PROCEEDINGS AND DOCUMENTS. All corporate, governmental and
other proceedings in connection with the transactions contemplated by this
Amendment and all instruments and documents incidental thereto shall be in form
and substance reasonably satisfactory to the Administrative Agent and the
Administrative Agent shall have received all such counterpart originals or
certified or other copies of all such instruments and documents as the
Administrative Agent shall have reasonably requested.

        SECTION 5.5. PAYMENT OF AMENDMENT FEE. The payment in cash of the
Amendment Fee (as defined in Section 10 below) to the Administrative Agent on
behalf of the Lenders.

        SECTION 6. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers hereby
represents and warrants to the Lenders as follows:

        (a)     The representations and warranties of such Borrower and of each
Guarantor contained in the Credit Agreement and the other Loan Documents to
which such Borrower or Guarantor, as the case may be, is a party were true and
correct in all material respects when made and continue to be true and correct
in all material respects on the date hereof, except that the financial
statements referred to in the representations and warranties contained in the
Credit Agreement shall be the financial statements of TransTechnology and its
Subsidiaries most recently delivered to the Administrative Agent, and except as
such representations and warranties are affected by the transactions
contemplated hereby;

        (b)     The execution, delivery and performance by such Borrower of this
Amendment and the consummation of the transactions contemplated hereby: (i) are
within the corporate powers of such Borrower and have been duly authorized by
all necessary corporate action on the part of such Borrower, (ii) do not require
any approval or consent of, or filing with, any governmental agency or
authority, or any other person, association or entity, which bears on the
validity or enforceability of this Amendment and which is required by law or any
regulation or rule of any agency or authority, or other person, association or
entity, (iii) do not violate any provisions of any order, writ, judgment,
injunction, decree, determination or award presently in effect in which such
Borrower is named, any law, regulation or rule binding on or applicable to such
Borrower or any provision of the charter documents or by-laws of such Borrower,
(iv) do not result in any breach of or constitute a default under any agreement
or instrument to which such Borrower is a party or to which it or any of its
properties are bound, including without limitation any indenture, credit or loan
agreement, lease, debt instrument or mortgage, except for such breaches and
defaults which would not have a material adverse effect on such Borrower and its
Subsidiaries taken as a whole, and (v) do not result in or require the creation
or imposition of any mortgage, deed of trust, pledge or encumbrance of any
nature upon any of the assets or properties of such Borrower;

<PAGE>   8

                                      -8-

        (c)     This Amendment and the Credit Agreement as amended hereby
constitute the legal, valid and binding obligations of such Borrower,
enforceable against such Borrower in accordance with their respective terms,
provided that (i) enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
affecting the rights and remedies of creditors, and (ii) enforcement may be
subject to general principles of equity, and the availability of the remedies of
specific performance and injunctive relief may be subject to the discretion of
the court before which any proceeding for such remedies may be brought; and

        (d)     As of the date hereof, no "Event of Default" under and as
defined in any instrument evidencing any Subordinated Debt has occurred.

        SECTION 7. NO OTHER AMENDMENTS. Except as expressly provided in this
Amendment, all of the terms and conditions of the Credit Agreement and the other
Loan Documents shall remain in full force and effect.

        SECTION 8. EXECUTION IN COUNTERPARTS. This Amendment may be executed in
any number of counterparts and by each party on a separate counterpart, each of
which when so executed and delivered shall be an original, but all of which
together shall constitute one instrument. In proving this Amendment, it shall
not be necessary to produce or account for more than one such counterpart signed
by the party against whom enforcement is sought.

        SECTION 9. RELEASE. In order to induce the Administrative Agent and the
Lenders to enter into this Amendment, each Borrower acknowledges and agrees
that: (i) no Borrower has any claim or cause of action against the
Administrative Agent or any Lender (or any of its respective directors,
officers, employees or agents); (ii) no Borrower has any offset right,
counterclaim or defense of any kind against any of their respective obligations,
indebtedness or liabilities to the Administrative Agent or any Lender; and (iii)
each of the Administrative Agent and the Lenders has heretofore properly
performed and satisfied in a timely manner all of its obligations to each
Borrower. The Borrowers wish to eliminate any possibility that any past
conditions, acts, omissions, events, circumstances or matters would impair or
otherwise adversely affect any of the Administrative Agent's and the Lenders'
rights, interests, contracts, collateral security or remedies. Therefore, each
Borrower unconditionally releases, waives and forever discharges (A) any and all
liabilities, obligations, duties, promises or indebtedness of any kind of the
Administrative Agent or any Lender to any Borrower, except the obligations to be
performed by the Administrative Agent or any Lender on or after the date hereof
as expressly stated in this Amendment, the Credit Agreement and the other Loan
Documents, and (B) all claims, offsets, causes of action, suits or defenses of
any kind whatsoever (if any), whether arising at law or in equity, whether known
or unknown, which any Borrower might otherwise have against the Administrative
Agent, any Lender or any of its directors, officers, employees or agents, in
either case (A) or (B), on account of any condition, act, omission, event,
contract, liability, obligation, indebtedness, claim, cause of action, defense,
circumstance or matter of any kind existing as of the date hereof, or occurring
prior to the date hereof.

<PAGE>   9

                                      -9-

        SECTION 10. AMENDMENT FEE. In connection with the approval of this
Amendment, TransTechnology hereby agrees to pay to the Administrative Agent for
the pro-rata benefit of each Lender consenting to this Amendment an amendment
fee equal to $215,625 (one-tenth of one percent (1/10%) of each such consenting
Lender's Commitment) (the "Amendment Fee").

        SECTION 11. EFFECTIVE DATE. Subject to the satisfaction of the
conditions precedent set forth in Section 5 hereof, this Amendment shall be
deemed to be effective as of January 31, 2001 (the "Effective Date").

        SECTION 12. AMENDMENT NO. 2. Except with respect to amendments to the
Credit Agreement contained in Amendment No. 2, this Amendment supercedes the
Borrowers' obligations contained in Amendment No. 2.

                  [Remainder of Page Intentionally Left Blank]

<PAGE>   10

        IN WITNESS WHEREOF, the undersigned have duly executed this Amendment
Agreement No. 3 as a sealed instrument as of the date first set forth above.

                                  TRANSTECHNOLOGY CORPORATION

                                   By:      /s/ Joseph F. Spanier
                                      ----------------------------------------
                                     Name:    Joseph F. Spanier
                                     Title:  Vice President, Chief Financial
                                                Officer and Treasurer

                                  TRANSTECHNOLOGY SEEGER-
                                  ORBIS GMBH

                                   By:     /s/ Michael J. Berthelot
                                      ----------------------------------------
                                     Name:    Michael J. Berthelot
                                     Title:  Geschaftsfuhrer

                                  TRANSTECHNOLOGY (GB) LIMITED

                                   By:     /s/ Michael J. Berthelot
                                      ----------------------------------------
                                     Name:   Michael J. Berthelot
                                     Title: Director

                                   By:     /s/ Gerald C. Harvey
                                      ----------------------------------------
                                     Name:   Gerald C. Harvey
                                     Title: Director

                                       S-1
<PAGE>   11

                                  FLEET NATIONAL BANK,
                                  individually, as Administrative Agent and
                                  as Sterling Fronting Bank

                                  By:    /s/Peggy Peckham
                                      -----------------------------------
                                     Name:  Peggy Peckham
                                     Title: Senior Vice President

                                  BHF-BANK AKTIENGESELLSCHAFT,
                                  as DM Fronting Bank

                                  By:    /s/Dr. Hans-Martin Konrad
                                      -------------------------------------
                                     Name:   Dr. Hans-Martin Konrad
                                     Title: General Manager

                                  By:    /s/Andreas Horbert
                                      -------------------------------------
                                     Name:   Andreas Horbert
                                     Title: Relationship Manager

                                  ABN AMRO BANK N.V., individually
                                  and as Syndication Agent

                                  By:    /s/Steven C. Wimpenny
                                      -------------------------------------
                                     Name:  Steven C. Wimpenny
                                     Title: Group Senior Vice President

                                  By:    /s/Parker H. Douglas
                                      -------------------------------------
                                     Name:  Parker H. Douglas
                                     Title: Group Vice President

                                  BANK ONE, NA, individually and as
                                  Documentation Agent

                                  By:       /s/Phillip D. Martin
                                     --------------------------------------
                                     Name:   Phillip D. Martin
                                     Title: First Vice President

                                       S-2
<PAGE>   12

                                  THE BANK OF NEW YORK

                                  By:     /s/Richard J. Baldwin
                                      -------------------------------------
                                     Name:  Richard J. Baldwin
                                     Title: Vice President

                                  KEY CORPORATE CAPITAL INC.

                                  By:     /s/Mark Kleinhaut
                                      -------------------------------------
                                     Name:  Mark Kleinhaut
                                     Title: Vice President

                                  BANK OF NOVA SCOTIA

                                  By:      /s/Brian S. Allen
                                      -------------------------------------
                                     Name:  Brian S. Allen
                                     Title: Managing Director

                                  COMERICA BANK

                                  By:      /s/Jeffrey Peck
                                      -------------------------------------
                                     Name:  Jeffrey Peck
                                     Title: Vice President

                                  DRESDNER BANK, AG, NEW YORK
                                  AND GRAND CAYMAN BRANCHES

                                  By:      /s/Gabriela E. Fields
                                      -------------------------------------
                                     Name:  Gabriela E. Fields
                                     Title: Asst. Treasurer

                                  By:      /s/Thomas Hasenauer
                                      -------------------------------------
                                     Name:  Thomas Hasenauer
                                     Title: Asst. Treasurer

                                       S-3
<PAGE>   13

                                  SUMMIT BANK

                                  By:      /s/Stephen T. Hill
                                      -------------------------------------
                                     Name:  Stephen T. Hill
                                     Title: Vice President

                                       S-4
<PAGE>   14

The Guarantors under (and as defined in) the Subsidiary Guaranty hereby
acknowledge that they have read and are aware of the provisions of this
Amendment and hereby reaffirm their absolute and unconditional guaranty of the
Borrowers' payment and performance of their obligations to the Lenders and the
Administrative Agent under the Credit Agreement as amended hereby.

                                  TRANSTECHNOLOGY ACQUISITION
                                  CORPORATION

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:    Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                  PALNUT FASTENERS, INC.

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:    Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                  INDUSTRIAL RETAINING RING
                                  COMPANY

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:     Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                  RETAINERS, INC.

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:    Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                       S-5
<PAGE>   15

                                  RANCHO TRANSTECHNOLOGY
                                  CORPORATION

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:    Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                  TRANSTECHNOLOGY SYSTEMS &
                                  SERVICES, INC.

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:    Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                  ELECTRONIC CONNECTIONS AND
                                  ASSEMBLIES, INC.

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:    Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                  SSP INDUSTRIES

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:    Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                  SSP INTERNATIONAL SALES, INC.

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:    Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                       S-6
<PAGE>   16

                                  TRANSTECHNOLOGY SEEGER INC.

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:    Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                  SEEGER INC.

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:    Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                  TCR CORPORATION

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:    Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                  AEROSPACE RIVET
                                  MANUFACTURERS CORPORATION

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:    Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                  NORCO, INC.

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:    Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                       S-7
<PAGE>   17

                                  ELLISON RING & WASHER INC.

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:    Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                  TRANSTECHNOLOGY ENGINEERED
                                  COMPONENTS, LLC

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:    Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                  TRANSTECHNOLOGY CANADA
                                  CORPORATION

                                  By:      /s/ Gerald C. Harvey
                                      -------------------------------------
                                      Name:    Gerald C. Harvey
                                      Title:  Vice President & Secretary

                                       S-8<PAGE>   1
                                                               Exhibit 10.4(iii)

                                AMENDMENT NO. 2

      AMENDMENT NO. 2 dated as of January 12, 2001 among the
following:

            (a)   HEALTH MANAGEMENT SYSTEMS, INC., a corporation duly
      organized and validly existing under the laws of the State of
      New York (the "Borrower");

            (b) each of the Subsidiaries of the Borrower identified under the
      caption "Guarantors" on the signature pages hereto (individually, a
      "Guarantor" and, collectively, the "Guarantors"); and

            (c) THE CHASE MANHATTAN BANK, a New York State bank (the "Bank").

      The Borrower, the Guarantors and the Bank are parties to a Credit
Agreement and Guaranty dated as of February 15, 2000 (as heretofore modified and
supplemented and in effect on the date hereof, the "Credit Agreement"),
providing, subject to the terms and conditions thereof, for extensions of credit
(by making loans and issuing letters of credit) to be made by the Bank to the
Borrower in an aggregate principal or face amount not exceeding $10,000,000. The
Borrower, the Guarantors and the Bank wish to amend the Credit Agreement in
certain respects and, accordingly, the parties hereto hereby agree as follows:

      Section 1. Definitions. Except as otherwise defined in this Amendment No.
2, terms defined in the Credit Agreement are used herein as defined therein.

      Section 2. Amendments. Subject to the satisfaction of the conditions
precedent specified in Section 4 below, but effective as of the date hereof, the
Credit Agreement shall be amended as follows:

      2.01 Definitions. Section 1.01 of the Credit Agreement shall be amended by
adding the following definitions in the appropriate alphabetical location:

            "`Medi' shall mean Medi, Inc., a California corporation."

            "`EDI Disposition' shall mean the sale by the Borrower to Medi of
      all of the assets and liabilities of the EDI business of the Borrower for
      a consideration consisting of (a) $450,000, (b) the EDI Note, and (c)
      certain credits in respect of services that may be provided by Medi to the
      Borrower."

            "`EDI Note' shall mean a promissory note of Medi in a principal
      amount equal to $275,000 delivered to the Borrower as partial
      consideration for the EDI Disposition."

      2.02 Conditions Precedent to New Extensions of Credit. Section 5.02 of the
Credit Agreement shall be amended by adding the following at the end thereof:

      "In addition, the obligation of the Bank to provide any Loan or to issue
      any Standby Letter of Credit shall be subject to the condition precedent
      that the Borrower's obligations in respect of such Loan or such Standby
      Letter of Credit be secured by a first priority perfected Lien on
      marketable securities satisfactory to the Bank in an amount satisfactory
      to the Bank."

                                      -1-
<PAGE>   2
      2.03 Sale of Assets. Section 8.05 of the Credit Agreement shall be amended
by deleting the word "and" immediately before clause (3) thereof, replacing the
period at the end thereof with ", and" and by adding the following new clause
(4):

            "(4) that the Borrower may consummate the EDI Disposition."

      2.04 Investments. Section 8.06 of the Credit Agreement shall be amended by
deleting the word "and" at the end of clause (6) thereof, by replacing the
period at the end of clause (7) thereof with "; and" and by adding the following
new clause (8) to read as follows:

            "(8) the EDI Note."

      2.05 Minimum Liquidity Covenant. The Credit Agreement shall be amended by
adding the following new Section 9.06 to read as follows:

            "SECTION 9.06. Minimum Liquidity. The Borrower will not permit the
      sum of the following for the Borrower and its Consolidated Subsidiaries to
      be less than $10,000,000 at any time:

                  (a) cash on hand and in bank accounts; and

                  (b) Investments of the type described in clauses
            (a)(obligations of the United States), (b)(commercial paper),
            (c)(bank certificates of deposit), (d)(corporate debt securities)
            and (e)(government debt securities) of Section 8.06 hereof."

      Section 3. Representations and Warranties. Each of the Borrower and the
Guarantors represents and warrants to the Bank that the representations and
warranties set forth in Article VI of the Credit Agreement are true and complete
on the date hereof as if made on and as of the date hereof and as if each
reference in said Article VI to "this Agreement" or the "Loan Documents"
included reference to this Amendment No. 2.

      Section 4. Conditions Precedent. As provided in Section 2 above, the
amendments to the Credit Agreement set forth in said Section 2 shall become
effective, as of the date hereof, upon the satisfaction of the following
conditions precedent:

      4.01. Execution by All Parties. This Amendment No. 2 shall have been
executed and delivered by each of the parties hereto.

      4.02. Receipt of Documents. The Bank shall have received copies of each of
each document evidencing or governing the EDI Disposition and the EDI Note.

      4.03. Amendment Fee. The Borrower shall have paid to the Bank an amendment
fee in an amount equal to $3,500, and a waiver fee in an amount equal to $5,000.

      4.04. Legal Fees and Expenses. The Borrower shall have paid to the Bank
the reasonable fees and expenses of the Bank's counsel in connection with this
Amendment No. 2.

      Section 5. Waiver. The Bank hereby waives compliance by the Borrower with
its obligations under Section 9.02 of the Credit Agreement for the period ending
on October 31, 2000. This waiver is limited solely to the provision specified
and solely for the determination of said provision as of the date specified and
shall not extend to any other provision or for any other date or period of time.

                                      -2-
<PAGE>   3
      Section 6. Miscellaneous. Except as herein provided, the Credit Agreement
shall remain unchanged and in full force and effect. This Amendment No. 2 may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same amendatory instrument and any of the parties hereto
may execute this Amendment No. 2 by signing any such counterpart. This Amendment
No. 2 shall be governed by, and construed in accordance with, the law of the
State of New York.

                                      -3-
<PAGE>   4
      IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
be duly executed and delivered as of the day and year first above written.

                                    BORROWER

                                    HEALTH MANAGEMENT SYSTEMS, INC.

                                    By _________________________
                                         Alan L. Bendes
                                         Senior Vice President and
                                         Chief Financial Officer

                                    GUARANTORS

                                    ACCELERATED CLAIMS PROCESSING, INC.

                                    By_________________________
                                         Name:
                                         Title:

                                    QUALITY MEDI-CAL ADJUDICATION
                                    INCORPORATED

                                    By_________________________
                                         Name:
                                         Title:

                                    HEALTH CARE MICROSYSTEMS, INC.

                                    By _________________________
                                          Name:
                                          Title:

                                    CDR ASSOCIATES, INC.

                                    By_________________________
                                         Name:
                                         Title:

                                    HSA MANAGED CARE SYSTEMS, INC.

                                    By_________________________
                                         Name:
                                         Title:

                                      -4-
<PAGE>   5
                                    HEALTH RECEIVABLES MANAGEMENT, INC.

                                    By _________________________
                                          Name:
                                          Title:

                                    BANK

                                    THE CHASE MANHATTAN BANK

                                    By _________________________
                                          Dele Akinla II
                                          Vice President

                                      -5-

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