Exhibit 10.2

                      THIRD LOAN MODIFICATION AGREEMENT

      This Third Loan Modification Agreement  (this "Loan Modification
Agreement') is entered into as of March 28, 2004, by and between SILICON
VALLEY BANK, a California-chartered bank, with its principal place of
business at 3003 Tasman Drive, Santa Clara, California 95054 and with a
loan production office located at One Newton Executive Park, Suite 200,
2221 Washington Street, Newton, Massachusetts 02462, doing business under
the name "Silicon Valley East" ("Bank") and PARLEX CORPORATION, a
Massachusetts corporation, with offices at One Parlex Place, Methuen,
Massachusetts, 01844, PARLEX DYNAFLEX CORPORATION, a California
corporation, with offices at One Parlex Place, Methuen, Massachusetts
01844, and POLY-FLEX CIRCUITS, INC., a Rhode Island corporation, with
offices at 28 Kenney Drive, Cranston, Rhode Island 02920 (jointly and
severally, individually and collectively, "Borrower").

      1.    DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among
other indebtedness and obligations which may be owing by Borrower to Bank,
Borrower is indebted to Bank pursuant to a loan arrangement dated as of
June 11, 2003, evidenced by, among other documents,  a certain Loan and
Security Agreement dated as of June 11, 2003 between Borrower and Bank, as
amended from time to time (as amended, the "Loan Agreement").  Capitalized
terms used but not otherwise defined herein shall have the same meaning as
in the Loan Agreement.

      2.    DESCRIPTION OF COLLATERAL.  Repayment of the Obligations is
secured by the Collateral as described in the Loan Agreement and certain
Intellectual Property Security Agreements each dated June 11, 2003 (the "IP
Agreements")  (together with any other collateral security granted to Bank,
the "Security Documents").

Hereinafter, the Security Documents, together with all other documents
evidencing or securing the Obligations shall be referred to as the
"Existing Loan Documents".

      3.    DESCRIPTION OF CHANGE IN TERMS.

            Modification to Loan Agreement.
            -------------------------------

            A.    Section 3.12 of the Loan Agreement is hereby amended by
                  deleting the following text in its entirety:

                  "3.12  Indebtedness. Except as shown on the Schedule
                  hereto, Borrower shall not create,incur, assume, or be
                  liable for any indebtedness for money borrowed, or permit
                  any of Borrower's subsidiaries to do so.  Notwithstanding
                  the foregoing, Borrower's subsidiaries, Parlex (Shanghai)
                  Circuit Co., Ltd. and Parlex (Shanghai) Interconnect
                  Products Co., Ltd., may incur indebtedness (provided such
                  indebtedness is not guaranteed by any Borrower except as
                  set forth in Section 5.5(ix)) of not more than
                  US$8,000,000 in the aggregate."

                  and substituting the following Section 3.12 therefor:

                  "3.12  Indebtedness. Except as shown on the Schedule
                  hereto, Borrower shall not create, incur, assume, or be
                  liable for any indebtedness for money borrowed, or permit
                  any of Borrower's subsidiaries to do so.  Notwithstanding
                  the foregoing, Borrower's subsidiaries, Parlex (Shanghai)
                  Circuit Co., Ltd. and Parlex (Shanghai) Interconnect
                  Products Co., Ltd., may incur indebtedness (provided such
                  indebtedness is not guaranteed by any Borrower and
                  Borrower furnishes Silicon with evidence satisfactory to
                  Silicon that there shall be no recourse against any
                  Borrower in connection with any such indebtedness) of not
                  more than US$13,000,000 in the aggregate."


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            B.    Section 5.5(ix) of the Loan Agreement is hereby amended
                  by deleting the following text appearing therein:

                  "(excepting any guarantee for the indebtedness of Parlex
                  (Shanghai) Interconnect Products, Co., Inc. in an amount
                  not to exceed $5,000,000 in the aggregate)"

      4.    FEES.  Borrower shall reimburse Bank for all reasonable legal
fees and expenses incurred in connection with this amendment to the
Existing Loan Documents.

      5.    RATIFICATION OF INTELLECTUAL PROPERTY SECURITY AGREEMENTS.
Borrower hereby ratifies, confirms, and  reaffirms, all and singular, the
terms and conditions of the IP Agreements and acknowledges, confirms and
agrees that the IP Agreements contain an accurate and complete listing of
all Intellectual Property.

      6.    RATIFICATION OF PERFECTION CERTIFICATES.  Borrower hereby
ratifies, confirms, and reaffirms, all and singular, the terms and
disclosures contained in certain Perfection Certificates delivered to the
Bank on or about June 11, 2003, and acknowledges, confirms and agrees the
disclosures and information provided therein has not changed, as of the
date hereof.

      7.    CONSISTENT CHANGES.  The Existing Loan Documents are hereby
amended wherever necessary to reflect the changes described above.

      8.    RATIFICATION OF LOAN DOCUMENTS.  Borrower hereby ratifies,
confirms, and reaffirms all terms and conditions of all security or other
collateral granted to the Bank, and confirms that the indebtedness secured
thereby includes, without limitation, the Obligations.

      9.    NO DEFENSES OF BORROWER.  Borrower hereby acknowledges and
agrees that Borrower has no offsets, defenses, claims, or counterclaims
against the Bank with respect to the Obligations, or otherwise, and that if
Borrower now has, or ever did have, any offsets, defenses, claims, or
counterclaims against the Bank, whether known or unknown, at law or in
equity, all of them are hereby expressly WAIVED and Borrower hereby
RELEASES the Bank from any liability thereunder.

      10.   CONTINUING VALIDITY.  Borrower understands and agrees that in
modifying the existing Obligations, Bank is relying upon Borrower's
representations, warranties, and agreements, as set forth in the Existing
Loan Documents.  Except as expressly modified pursuant to this Loan
Modification Agreement, the terms of the Existing Loan Documents remain
unchanged and in full force and effect.  Bank's agreement to modifications
to the existing Obligations pursuant to this  Loan Modification Agreement
in no way shall obligate Bank to make any future modifications to the
Obligations.  Nothing in this Loan Modification Agreement shall constitute
a satisfaction of the Obligations.  It is the intention of Bank and
Borrower to retain as liable parties all makers of Existing Loan Documents,
unless the party is expressly released by Bank in writing.  No maker will
be released by virtue of this Loan Modification Agreement.

      11.   COUNTERSIGNATURE.  This Loan Modification Agreement shall
become effective only when it shall have been executed by Borrower and
Bank.


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      This Loan Modification Agreement is executed as a sealed instrument
under the laws of the Commonwealth of Massachusetts as of the date first
written above.

BORROWER:

PARLEX CORPORATION

By: /s/ Peter J. Murphy
    ---------------------------------
Name: Peter J. Murphy
Title: Chief Executive Officer

PARLEX DYNAFLEX CORPORATION

By: /s/ Peter J. Murphy
-------------------------------------
Name: Peter J. Murphy
Title: Chief Executive Officer

POLY-FLEX CIRCUITS, INC.

By: /s/ Peter J. Murphy
-------------------------------------
Name: Peter J. Murphy
Title: Treasurer

BANK:

SILICON VALLEY BANK, d/b/a
SILICON VALLEY EAST

By: /s/ David E. Rodriguez
-------------------------------------
Name:  David E. Rodriguez
Title:  Vice President


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