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EAI ENTERS INTO LOAN MODIFICATION AND FORBEARANCE AGREEMENT

 WEST LONG BRANCH, N.J., Jan. 5 /PRNewswire/ -- Electronic Associates, Inc. (NYSE: EA) today reported it has entered into a modified agreement with its principal lender under which the lender has agreed that through Feb. 28, 1993, it will not exercise the remedies available to it under the loan agreement as a result of EAI's non- compliance with certain covenants, and it will make additional advances to the company under the revolving credit line based upon a formula related to certain accounts receivable and inventory of the company. No additional advances will be made under the equipment credit line. The amount of credit available is capped at $4.425 million through Jan. 14, 1993, and declines to $3.9 million by Feb. 5, 1993. The amounts outstanding under the revolving credit arrangement and the full credit facility were approximately $3.9 million and $5.7 million, respectively, as of Dec. 31, 1992. The modified agreement requires that the company repay its lender approximately $4.978 million by Feb. 28, 1993.
 EAI is currently pursuing the sale of its third party electronics equipment maintenance business with several interested parties. The lender's agreement to extend credit and forbear from exercising its remedies is also conditioned upon the signing of a letter of intent for the sale by Jan. 7, 1993, and other criteria concerning the sale.
 EAI is engaged in three related business lines, serving users and producers of electronic products and systems. In contract manufacturing, EAI provides manufacturing services for products designed and marketed by customers. In field service, the company offers independent maintenance of electronic equipment, with technicians across the United States and in Japan. In product engineering, EAI provides simulation computer products plus design and engineering services to private industry and government agencies. The company's common stock has traded on the New York Stock Exchange since 1962.
 -0- 1/5/93
 /CONTACT: Louis J. Tedeschi, 908-229-1100, ext. 655, or Paul Finkel, 201-740-0090, both of EAI/
 (EA)


CO: Electronic Associates, Inc. ST: New Jersey IN: CPR SU: FNC

CK-KD -- NY033 -- 1653 01/05/93 10:45 EST
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Publication:PR Newswire
Date:Jan 5, 1993
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