Eighth Amendment To Loan And Security Agreement

EIGHTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


June 5, 1997
Effective: March 31, 1997


THIS EIGHTH AMENDMENT IS made to the Amended and Restated Loan and Security Agreement (the "LOAN AGREEMENT"), which Amended and Restated Loan and Security Agreement took effect on April 6, 1995 as an amendment and restatement of the December 16, 1994 Loan and Security Agreement made between


BankBoston, N.A. (Formerly known as "The First National Bank of
Boston"), a national banking association with offices at 100 Federal
Street, Boston, Massachusetts, as agent for the ratable benefit of the
"LENDERS" being:


BankBoston, N.A.;


and


State Street Bank and Trust Company, a Massachusetts trust
company with offices at 225 Franklin Street, Boston,
Massachusetts 02110;


and


Citizens Bank of Massachusetts, a Massachusetts savings bank with
offices at 55 Summer Street, Boston, Massachusetts 02110


and


ACT Manufacturing, Inc., a Massachusetts corporation with its
principal executive offices at 108 Forest Avenue, Hudson, Massachusetts
01749


in consideration of the mutual covenants contained herein and benefits to be derived herefrom,


WITNESSETH:


1. AGREEMENT TO AMEND
------------------


Provided each of those "Conditions to Amendment" set forth in Section 2, below, is satisfied on or before May 23, 1997, the Loan Agreement shall be amended, as set forth below, such amendment to take effect as of March 31, 1997.


/May 14, 1997/ /1/


SECTION 1-1(a) of the Loan Agreement is amended to read as follows:


(a) As used herein, the term "AVAILABILITY" refers at any time to the lesser of (i) or (ii), below, where:


(i) Is the Loan Cap (defined below).


(ii) Is


(A) 80% of the face amount of each of the Borrower's
Acceptable Accounts (as defined below).


plus
(B) The lesser of


(I) The Inventory Cap (defined below),
or


(II) 45% of the value of the Borrower's Acceptable Raw
Materials Inventory, as defined below (Acceptable
Raw Materials Inventory being valued at the lower
of cost or market after deducting all
transportation, processing, handling charges, and
all other costs and expenses affecting the value
thereof).


Minus
(C) The aggregate Stated Amount (defined below) of any L/C
(defined below).


SECTION 1-1(c) of the Loan Agreement is amended to read as follows:


(c) The proceeds of borrowings under the Revolving Credit shall be used solely for the following:


(i) Working capital for the Borrower.


(ii) Capital Expenditures otherwise permitted by the within
Agreement.


(iii) Payments otherwise permitted pursuant to any of the
following Sections of the within Agreement:
: Indebtedness
5-18A: Permitted Acquisitions.
: Permitted Distributions /May 14, 1997/ /2/


SECTION 1-1(d) of the Loan Agreement is amended to read as follows:


"INVENTORY CAP": Until May 31, 1998 : $7,500,000.00.
Thereafter : 10,000,000.00.


"LOAN CAP": Fifty Million Dollars ($50,000,000.00)
minus,
the then aggregate Stated Amount of all L/C's.
minus
Fifty Percent (50%) of the net proceeds of any issuance, after
April 30, 1997, of capital stock by the Borrower or of
subordinated indebtedness permitted to be incurred pursuant to
the within Agreement.


SECTION 1-13(b) of the Loan Agreement is amended to read as follows:


(b) As compensation for its services rendered as Agent hereunder, the Agent shall have earned an agency fee, which fee shall be determined as follows:


(i) Until December 31, 1996, at a rate equal to One Eighth of One
Percent per annum of the Loan Cap.


(ii) Commencing with calendar year 1997, at a rate of $6,250.00
per calendar quarter.


The agency fee shall be payable in arrears, with the first payment due on the first Business Day of January, 1995 and subsequent payments due on the first Business Day of each calendar quarter thereafter, on the Termination Date, and on that date on which all Liabilities are paid in full.


ARTICLE 3 is amended so that the following definitions, which appear therein,
read as follows:


/May 14, 1997/ /3/


"Commitment and Commitment Percentage": the following amounts and
Percentages:


================================================================================ REVOLVING CREDIT: COMMITMENTS AND PERCENTAGE COMMITMENTS ================================================================================
LENDER - --------------------------------------------------------------------------------
DOLLAR COMMITMENT TO COMMITMENT PERCENTAGE OF
REVOLVING CREDIT LOANS REVOLVING CREDIT LOANS
($ Millions)


BANKBOSTON 25.0 50% - -------------------------------------------------------------------------------- STATE STREET 12.5 25% - -------------------------------------------------------------------------------- CITIZENS 12.5 25% - --------------------------------------------------------------------------------
TOTALS.......... $50.0 100% ================================================================================


"Debt Service Coverage Ratio": The decimal equivalent of the following
fraction, each determined, without duplication, on a rolling Four (4)
quarter basis:


Numerator:
---------
EBITDA
plus
Equipment operating lease expense
plus
Funded Indebtedness, other than
Revolving Credit Loans
minus
Capital expenditures
minus
Distributions
minus
Taxes paid in cash


Denominator:
-----------
Interest expense
plus
Current maturities of long term debt
(including capitalized leases)
plus
Equipment operating lease expense


/May 14, 1997/ /4/


"Eurodollar Rate": that per annum rate determined as the aggregate of the
Eurodollar Offer Rate Plus the Euro/Libor Margin, except that, in the
event that it is determined that any Lender may be subject to the
Reserve Percentage, the Eurodollar Rate shall mean, with respect to
any Eurodollar Rate Loans then outstanding (from the date on which
that Reserve Percentage first became applicable to such loans), and
with respect to all Eurodollar Rate Loans thereafter made, an interest
rate per annum equal the sum of (a) plus (b), where:


(a) is the decimal equivalent of the following fraction:
Eurodollar Offer Rate
--------------------------
1 minus Reserve Percentage


(b) is the Euro/Libor Margin.


"Interest Payment Date": With reference to:


(a) Any Euro/Libor Rate Loan - the last day of the Interest
Period relating thereto (and if the applicable Interest Period is 6
months, then also on the Business Day which is ...