Exhibit 10.21

                         LOAN MODIFICATION AGREEMENT

      This Loan Modification Agreement  (this "Loan Modification
Agreement') is entered into as of September 23, 2003, 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 (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 2 of the Schedule to the Loan Agreement is hereby
      amended by deleting same in its entirety and substituting the
      following therefor:

            "Interest Rate (Section 1.2):

            A rate equal to the Prime Rate (as defined below) plus 1.50%
            per annum.  Interest shall be calculated on the basis of a 360-
            day year for the actual number of days elapsed. "Prime Rate"
            is the greater of (i) 4.0% or (ii) the rate announced from time
            to time by Silicon as its "prime rate;" it is a base rate upon
            which other rates charged by Silicon are based, and it is not
            necessarily the best rate available at Silicon.  The interest
            rate applicable to the Obligations shall change on each date
            there is a change in the Prime Rate.  Notwithstanding the
            foregoing, (i) upon Borrower's achievement of positive
            operating income for any fiscal quarter of Borrower during the
            term of this Agreement, the interest rate hereunder shall be
            reduced to the Prime Rate (as defined above) plus 0.75% per
            annum, and (ii) upon Borrower's achievement of two (2)
            consecutive quarters of positive net income, the interest rate
            hereunder shall be further reduced to the Prime Rate (as
            defined above) plus  0.25% per annum.  Such reduction in the
            interest rate shall be effective immediately upon receipt by
            Silicon of sufficient evidence of such achievement of positive
            operating income and/or positive net income, as applicable.
            Notwithstanding the foregoing, such reduction in the interest
            rate shall be effective no later than the day upon which
            Borrower files a quarterly statement on Form 10-Q indicating
            positive operating income or  a second consecutive quarterly
            statement on Form 10-Q indicating positive net income, as
            applicable."


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      B.    Section 5a.of the Schedule to the Loan Agreement is hereby
      amended by deleting same in its entirety and substituting the
      following therefor:

            "Borrower shall have EBITDA of no less than $1.00, tested on a
            trailing three month basis, as of the periods ending  September
            30, 2003, October 31, 2003 and November 30, 2003."

      C.    Section 5b. of the Schedule to the Loan Agreement is hereby
      amended by deleting subsection (b) thereof in its entirety and
      substituting the following therefor:

            "(b) 1.25 to 1.00 at December 31, 2003 and thereafter."

4.    FEES.  Borrower shall pay to Bank a modification fee equal to Ten
Thousand Dollars ($10,000.00), which fee shall be due on the date hereof
and shall be deemed fully earned as of the date hereof.  Borrower shall
also reimburse Bank for all reasonable legal fees and expenses incurred in
connection with this amendment to the Existing Loan Documents.

5.    WAIVERS.  The Bank hereby waives Borrower's failure to comply with
the "Minimum Fixed Charge Coverage" covenant set forth in Section 5b. of
the Schedule to the Loan Agreement for the periods ending June 30, 2003,
July 31, 2003 and August 31, 2003. The Bank's waiver of Borrower's
compliance with said foregoing affirmative covenants shall apply only to
the foregoing specified periods.

6.    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.

7.    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.

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

9.    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.

10.   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.

11.   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.


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


      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/ Jonathan R. Kosheff
        -------------------------------
Name:   Jonathan R. Kosheff
Title:  Chief Financial Officer

PARLEX DYNAFLEX CORPORATION

By:     /s/ Peter J. Murphy
        -------------------------------
Name:   Peter J. Murphy
Title:  President & CEO

POLY-FLEX CIRCUITS, INC.

By:     /s/ Peter J. Murphy
        -------------------------------
Name:   Peter J. Murphy
Title:  President & CEO


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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