<PAGE>

                                                                   Exhibit 10.22
                                                                   -------------

                    MODIFICATION AND/OR EXTENSION AGREEMENT


Date:           November 28, 2000                                        AG/HAV

Borrower(s):    PACIFIC AEROSPACE & ELECTRONICS, INC.

Lender:         KEYBANK NATIONAL ASSOCIATION

Note:           Dated September 22, 1998, in the principal amount of
                $6,300,000.00, including any and all amendments thereto.

Loan #:         31-357577-3000009903


          FOR VALUE RECEIVED, Borrower and Lender hereby agree to modify the
above-referenced Loan and Promissory Note and/or Loan Agreement as follows:

1.   MODIFICATION AND/OR EXTENSION PROVISIONS.
     ----------------------------------------

          .  The maturity date of the Loan is hereby extended to January 5,
             2001.

2.   CONDITIONS.  The modifications and/or extension described above are subject
     ----------
     to and conditioned upon Borrower's full satisfaction of all of the
     following conditions on or before the date first stated above, time being
     of the essence.

     A.   There shall be no uncured event of default under the Loan, nor any
          event or condition which with notice or the passage of time would be
          an event of default thereunder.

     B.   Borrower shall deliver to Lender a fully executed original of this
          Modification and/or Extension Agreement.

     C.   All expenses incurred by Lender in connection with this Agreement
          (including without limitation, attorney fees, recording charges,
          charges for title policy update(s), escrow charges, costs of obtaining
          updated or additional appraisal(s) or collateral valuations, if
          required by Lender) shall be paid by Borrower.

     D.   Borrower shall comply with the following additional conditions:

          .  Borrower shall pay Lender in cash an extension fee of $10,500.00.

3.   GENERAL PROVISIONS.  Except as modified above, all other provisions of the
     ------------------
     Promissory Note and any other documents securing or relating to the Loan
     (the "Loan Documents") remain in full force and effect. All security given
     for the Loan and all guarantees of the Loan (as applicable) shall continue
     in full force. Borrower warrants and represents to Lender that it has full
     right, power and authority to enter into this

                                       1
<PAGE>

     agreement and to perform all its obligations hereunder, and that all
     information and materials submitted to Lender in connection with this
     modification are accurate and complete. Borrower warrants that no default
     exists under the Loan Documents. Borrower reaffirms its obligation to pay
     the Loan in full and reaffirms the validity and enforceability of the Loan
     Documents, without set-off, counterclaim or defense.

ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR
FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.


LENDER:                                 BORROWER:

KEYBANK NATIONAL ASSOCIATION            PACIFIC AEROSPACE & ELECTRONICS, INC.


By:  /s/ John C. Thoren                 By:  /s/ Donald A. Wright
   ---------------------------------       ---------------------------------
   John C. Thoren, Vice President          Donald A. Wright, CEO & President

                                       2