AMENDMENT TO LOAN AGREEMENT

     THIS  AMENDMENT  TO LOAN  AGREEMENT  ("Amendment")  is made this ___ day of
September,  2000,  by and between  Bank of  America,  N.A.,  a national  banking
association (the "Bank") and Frisby  Technologies,  Inc., a Delaware corporation
("Borrower").

                              W I T N E S S E T H:
                              --------------------

     WHEREAS, Bank and Borrower are parties to that certain Loan Agreement dated
as of February 29, 2000 (the "Loan Agreement"),  pursuant to which Bank extended
a revolving line of credit to the Borrower (the "Loan"), in the principal amount
of $2,000,000 (all capitalized  terms appearing herein and not otherwise defined
shall have the meanings ascribed to such terms in the Loan Agreement); and

     WHEREAS,  the Loan was  scheduled  to  mature  on July  31,  2000,  but the
maturity  date thereof was extended to September  30, 2000 pursuant to the terms
of that certain renewal Promissory Note dated May 12, 2000; and

     WHEREAS, the Borrower has now requested Bank to extend the maturity date of
the Loan further, to December 31, 2000; and

     WHEREAS,  the Bank has  agreed  to such  extension  of the  maturity  date,
subject to certain terms and conditions; and

     WHEREAS,  the parties wish to set forth their agreement with respect to the
foregoing matters herein;

     NOW, THEREFORE,  in consideration of the premises,  the Bank's agreement to
extend the maturity date of the Loan, the mutual  promises set forth below,  and
other valuable  consideration,  the receipt and  sufficiency of which are hereby
acknowledged, the parties hereto agree hereby as follows:

     1.  Extension of Maturity  Date.  The  Maturity  Date of the Loan is hereby
extended  from  September  30,  2000 to  December  31,  2000,  which  date shall
hereafter  be the  "Maturity  Date"  for  purposes  of the Loan  Agreement.  The
Borrower  shall  execute and deliver a note  modification  agreement  (the "Note
Modification"),  in form satisfactory to the Bank,  evidencing such extension of
the Maturity Date.

     2. Amendments to Loan Agreement. The parties hereto agree to amend the Loan
Agreement as follows:

     (a) Section  2(A) is amended by  restating  the  following  subsections  as
follows:

          Revolving Line of Credit. (i) Subject to the terms hereof, Bank agrees
     to extend a revolving line of credit (the  "Revolver") to Borrower,  in the
     original  principal  amount of Two Million  Dollars  ($2,000,000),  for the
     purpose of  providing  temporary  financing  of the  Borrower's  short-term
     working capital needs (including specifically, but not limited to, issuance
     of letters of credit  having an aggregate  face amount of not more than the
     lesser of  $1,000,000  or fifty  percent  (50%) of the  borrowing  base, as
     described in the Borrowing Base Agreement  attached hereto as Exhibit A and
     by  reference  made  a  part  hereof),  prior  to the  closing  of  private
     placements  of capital  stock of the  Borrower  and receipt of the proceeds
     thereof (each,  a "Private  Placement".  For purposes  hereof,  however,  a
     Private Placement shall not be deemed to include the creation or incurrence
     of additional  indebtedness by the Borrower;  provided,  however,  that the
     creation or  incurrence  of any such  indebtedness  shall be subject to the
     prior  written  consent  of the  Bank,  in  accordance  with  Section 7 (E)
     hereof).  Provided that no default has occurred  hereunder,  and subject to
     the  mandatory  prepayment  provisions  hereof,  the  Borrower  may  obtain
     advances from time to time under the Revolver,  and may repay and re-borrow
     under the Revolver,  subject to the Borrowing Base  Agreement.  To evidence
     the Revolver,  the Borrower  shall execute and deliver to Bank a promissory
     note (the "Note") in the principal  amount of $2,000,000,  which Note shall
     bear  interest  and be  payable  in  accordance  with the  terms  set forth
     hereinbelow.  The  Revolver  shall  mature  and  become  payable in full on
     December 31, 2000, which date shall be the "Maturity Date."

                  * * * * *

          (iii)  Interest  and  Principal.  Interest  on  the  principal  amount
     outstanding under the Revolver from time to time shall accrue at a variable
     rate of the Prime Rate,  plus two hundred  basis points  (2.00%) per annum,
     which accrued  interest shall be payable monthly in arrears.  The principal
     of the Note shall be repaid in full on the Maturity Date, together with all
     accrued but unpaid interest.

                  * * * * *

          (v)  Guaranties.  Repayment in full of all Obligations of the Borrower
     shall be personally,  and jointly and  severally,  guaranteed by Gregory S.
     Frisby  and Jeffry D.  Frisby  (the  "Guarantors"),  pursuant  to  guaranty
     agreements in form satisfactory to the Bank (the "Guaranties"). Each of the
     Guarantors shall agree to maintain minimum liquidity,  as determined by the
     Bank, in an amount of not less than $500,000 at all times,  the calculation
     of which minimum  liquidity shall exclude all of the Guarantors'  ownership
     interests in the Borrower and all home equity lines of credit.

     (b) Section 2(A) of the Loan  Agreement is further  amended by adding a new
subsection, as follows:

          (vi) Mandatory  Prepayment.  In the event Borrower  closes any Private
     Placement  prior to the Maturity Date, the net proceeds  thereof (up to the
     outstanding  principal balance of the Loan,  exclusive of any amount of the
     Loan  reserved for payment of letters of credit  issued by the Bank for the
     account of the  Borrower)  shall be paid to the Bank as a prepayment of the
     Loan.  Such net  proceeds  shall be  applied to any  outstanding  principal
     amount of the Loan until the same has been  repaid in full.  The amount (if
     any) available to be borrowed under the Loan shall be reduced by the amount
     of each such  prepayment.  Any  remaining  proceeds of a Private  Placement
     after payment in full of the Loan (up to the face amount of such letters of
     credit)  shall  also  be  paid  to  and  deposited  by the  Bank  in a cash
     collateral account maintained by the Bank in the name of the Borrower,  and
     held as additional  collateral for payment and  performance by the Borrower
     under any  letters  of credit  issued  by the Bank for the  account  of the
     Borrower,  including all reimbursement obligations of the Borrower pursuant
     to such letters of credit.  Any proceeds  remaining after the Loan has been
     repaid and such  letters of credit have been fully  secured may be retained
     by the Borrower.

     (c) Section 6(A) of the Loan  Agreement is amended by restating the same as
follows:

          (i) Maintain a Tangible Net Worth of not less than $2,000,000  through
     and including December 31, 2000, and thereafter.

     (d) The  Borrowing  Base  Certificate  (Exhibit A-1 to the  Borrowing  Base
Agreement) is amended by restating the same in full, in the form attached hereto
as Exhibit A.

     3.  Guaranties.  Each of the  Guarantors  shall  execute an  amendment  and
acknowledgment agreement (the "Guaranty Amendment"), in form satisfactory to the
Bank. Such Guaranty  Amendment shall provide that the obligations of each of the
Guarantors pursuant to their Guaranty, and any Collateral therefor, shall extend
to the Loan, as amended hereby.  Such Guaranty Amendment shall also provide that
the Guaranties shall be amended to make the same unlimited and unconditional.

     4. Conditions  Precedent to Amendment.  The Bank's obligation to enter into
this Amendment shall be subject to the satisfaction of the following conditions,
in form and substance reasonably acceptable to the Bank and the Bank's counsel:

     A.  Note  Modification.  Borrower  has  executed  and  delivered  the  Note
Modification.

     B.  Guaranty  Amendments.  Each  Guarantor  has  executed  and  delivered a
Guaranty Amendment.

     C. No Defaults.  No condition or event of default under the Loan  Documents
shall exist.

     D.  Miscellaneous.  All other Loan Documents or items that are  customarily
provided in loan transactions of this type and all other loan documents or items
reasonably required by Bank.

     E. No Material  Adverse  Effect.  No event has  occurred or failed to occur
that would have a Material  Adverse  Effect on the  financial  condition  of the
Borrower or any  Guarantor  as set forth in their most recent  annual  financial
statements and  internally-prepared  monthly financial  statements  submitted to
Bank.

     5. Costs,  Expenses and  Attorneys'  Fees.  Borrower  shall pay to Bank all
costs and expenses,  including  reasonable  attorneys'  fees incurred by Bank in
connection  with (a)  negotiation  and preparation of this Amendment and each of
the Loan Documents, and (b) Bank's continued administration thereof.

     6. Representations and Warranties.  Borrower represents and warrants to the
Bank as follows:

          (a) Power and  Authority;  Enforceability.  Borrower has the power and
     authority  to execute and deliver this  Amendment  and to perform the terms
     and  conditions  of the Loan  Agreement  and the other Loan  Documents,  as
     amended and modified by this Amendment.  The execution and delivery of this
     Amendment by the Borrower and the performance of the Loan Agreement and the
     other Loan Documents, as amended and modified by this Amendment, do not and
     will not violate any law, rule or regulation, or constitute a breach of the
     articles  of  incorporation,  bylaws  or  resolutions  of  Borrower  or any
     agreement  to which  Borrower  is a party or by which its assets are bound.
     The Loan Agreement and the other Loan Documents, as amended and modified by
     this  Amendment,   constitute  legal,  valid  and  binding  obligations  of
     Borrower, enforceable in accordance with their respective terms, subject to
     bankruptcy,  insolvency,  reorganization,  and  similar  laws and other law
     generally  affecting the enforceability of creditors' rights and to general
     principles of equity.

          (b) No Default.  Upon the execution and delivery of this  Amendment by
     the  Borrower,  the  Borrower  will not be in default  in the  performance,
     observance  or  fulfillment  of  any  of  the  obligations,   covenants  or
     conditions contained in the Loan Agreement or the other Loan Documents,  as
     amended  and  modified  by  this  Amendment,  or  any  other  agreement  or
     instrument to which any of them is a party.

          (c) Representations. The representations and the information furnished
     by the  Borrower  to the Bank with regard to this  Amendment  are and shall
     continue  to be true  and  not  misleading  in all  material  respects.  In
     addition,  the  representations  and warranties of the Borrower to the Bank
     contained herein, in the Loan Agreement, in the other Loan Documents and in
     any other  document or instrument  executed or delivered by the Borrower in
     connection therewith,  are and shall continue to be true and not misleading
     in all material respects,  except as otherwise  disclosed in writing to the
     Bank and approved by the Bank prior to the date hereof.

     7. Covenants. The Borrower covenants and agrees that, unless the Bank shall
otherwise consent in writing, the Borrower shall:

          (a)  Compliance  with  Covenants.  Continue  to comply with all of the
     terms,  covenants and  agreements  contained in the Loan  Agreement and the
     other Loan Documents, as amended and modified by this Amendment.

          (b) Further Assurances.  Execute and deliver such further instruments,
     and take such further  action as the Bank may reasonably  request,  in each
     case to further  effect the  purposes of the Loan  Agreement  and the other
     Loan Documents, as modified by this Amendment.

     8.  Ratification.  Except as expressly  amended hereby,  the Loan Agreement
shall be and remain in full force and effect in accordance  with its terms.  The
Borrower stipulates and agrees that there exists no defense, claim of setoff, or
claim in avoidance of any of its liabilities or obligations under or pursuant to
the Loan Agreement, as so amended.

     9. Miscellaneous.

          (a) All references to the "Loan Agreement" in the Loan Agreement shall
     hereafter mean and refer to the Loan Agreement as previously amended and as
     amended hereby.

          (b) All references to the "Loan Agreement" in the other Loan Documents
     shall hereafter mean and refer to the Loan Agreement as previously  amended
     and as amended hereby.

          (c) In the event of any conflict  between the terms of this  Amendment
     and the Loan  Documents,  the terms of this  Amendment  shall  control  and
     govern.

          (d) All capitalized  terms used herein that are not otherwise  defined
     shall have the meanings ascribed to such terms in the Loan Agreement.

     10. Counterparts.  This Amendment may be executed in separate counterparts,
and said  counterparts  taken together shall be deemed to constitute one and the
same  instrument.  An executed  copy of this  Amendment  delivered by telecopier
shall have the same effect as an originally executed copy of this Amendment.

     11. NO ORAL AGREEMENT.  THIS WRITTEN AMENDMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

     IN  WITNESS  WHEREOF,  the  parties  hereto  have  executed  the  foregoing
Amendment to Loan Agreement as of the date first above written.

                                                     BORROWER:
                                                     ---------



                                                     FRISBY TECHNOLOGIES, INC.
         ATTEST:

                                                     By: ____________________
                                                     Title: _________________
          ----------------------
               SECRETARY
           [Corporate Seal]

                                      BANK:

                                                     BANK OF AMERICA, N.A.

                                                     By: ____________________
                                                     Title: _________________


<PAGE>


                                    EXHIBIT A

                                   [Attached]
<PAGE>
                                   EXHIBIT A-1

                           BORROWING BASE CERTIFICATE

Status as of _______________, 20___.

In accordance with the terms of the Borrowing Base Agreement attached as Exhibit
A to that  Loan  Agreement  dated  February  29,  2000,  by and  between  Frisby
Technologies,  Inc. and Bank of America,  N.A., as amended,  we hereby represent
and warrant as follows:
<TABLE>
<CAPTION>

<S>                                                                    <C>
1.       Total Accounts Receivable                                     $____________

2.       Less ineligible accounts receivable
         (as set forth in the Borrowing Base
         Agreement)                         $____________

3.       Eligible Accounts Receivable       $____________

4.       80% of Eligible Accounts Receivable                           $____________

5.       Eligible Inventory:                $____________

6.       50% of Eligible Inventory                                     $____________

7.       Net Book Value ("NBV")
         of Equipment                       $____________

8.       50% of NBV of Equipment                                       $____________

9.       Line 4 + Line 6 + Line 8                                      $____________

10.      Maximum loan amount                                           $2,000,000.00

11.      Outstanding balance as of report date                         $____________

12.      Borrowing Base (lesser of line 9 or line 10
         minus line 11)                                                $____________

13.      Less aggregate outstanding letters of credit                  $____________

14.      Net available for further advances                            $____________

15.      If line 14 is negative, amount to be
         repaid immediately to Bank                                    $____________
</TABLE>


     The undersigned does hereby certify that the foregoing is true and correct.
The  undersigned  does  further  acknowledge  that the Bank is relying upon this
certificate and any supporting documents to grant or continue to grant credit to
it, and further  warrants and represents  that no event of default has occurred,
or would, with the passage of time or the giving of notice, or both, occur under
the above-referenced Loan Agreement.

Borrower:
--------

FRISBY TECHNOLOGIES, INC.

By:________________________________
Title: ____________________________

<PAGE>
Bank of America, N.A.

                           NOTE MODIFICATION AGREEMENT

                      BY AND BETWEEN BANK OF AMERICA, N.A.
                                ("BANK"/"LENDER")
                                       AND
                            FRISBY TECHNOLOGIES, INC.
                                (the "BORROWER")


                                             EFFECTIVE AS OF: SEPTEMBER __, 2000

On May 12, 2000,  Borrower  executed a renewal  Promissory  Note (the "Note") in
favor of  Bank/Lender.  The Note was in the  original  principal  face amount of
$2,000,000.00,  with a stated final  maturity  date of September  30, 2000.  The
principal  balance of the Note as of the  effective  date of this  Agreement  is
$__________________.  Bank/Lender  remains  the owner and holder of the Note and
has  agreed  with  Borrower  to modify  certain  provisions  of the  Note.  Now,
therefore, in consideration of these premises and the exchange of other good and
valuable consideration, the receipt of which is hereby acknowledged, Bank/Lender
and Borrower agree to modify the Note as follows:

          [X] The maturity  date  is  changed  to:  December  31,  2000
          [ ] The interest rate is changed to:_________________________

          [X] The payment  terms are changed to: All  principal,  together  with
accrued but unpaid  interest  on the Note,  shall be payable in full on December
31,  2000.  Principal of the Note shall also be prepaid in  accordance  with the
terms of that certain  Amendment to Loan Agreement of even date herewith between
the Borrower and the Bank (the "Amendment).

The term  "Borrower" as used in this Agreement shall be construed as singular or
plural to  correspond  with the number of persons  executing  this  Agreement as
Borrower.

All other  terms,  conditions  and  covenants in the Note shall be and remain in
full force and effect. When executed by Bank/Lender and Borrower, this Agreement
shall be attached to and become a part of the Note.

NOTICE OF FINAL AGREEMENT.

THIS  WRITTEN  AGREEMENT,  TOGETHER  WITH THE  AMENDMENT,  REPRESENTS  THE FINAL
AGREEMENT  BETWEEN  BORROWER  AND  BANK/LENDER  AND MAY NOT BE  CONTRADICTED  BY
EVIDENCE  OF  PRIOR,  CONTEMPORANEOUS  OR  SUBSEQUENT  ORAL  AGREEMENTS  BETWEEN
BORROWER  AND  BANK/LENDER.  THERE  ARE NO  UNWRITTEN  ORAL  AGREEMENTS  BETWEEN
BORROWER AND BANK/LENDER.

IN WITNESS WHEREOF, the undersigned has caused this Note Modification  Agreement
to be executed under seal by Borrower on this ______ day of September, 2000.

Bank of America, N.A.                                Borrower:

By:  _________________________________
Title: _______________________________

                                                     FRISBY TECHNOLOGIES, INC.
ATTEST:                                              By:
                                                     Title:

_______________________
     SECRETARY
     [Corporate Seal]

<PAGE>
                    ACKNOWLEDGMENT AND AMENDMENT AGREEMENT

     THIS  ACKNOWLEDGMENT AND AMENDMENT  AGREEMENT (this  "Acknowledgment"),  is
made  this ___ day of  September,  2000,  by  JEFFRY D.  FRISBY,  an  individual
resident of Forsyth County, North Carolina  ("Guarantor"),  and BANK OF AMERICA,
N.A., a national banking association ("Bank"), as follows:

                              W I T N E S S E T H:
                              --------------------

     WHEREAS,  pursuant to that certain  Continuing and  Unconditional  Guaranty
dated February 29, 2000 (the "Guaranty"), Guarantor guaranteed payment of all of
the  indebtedness  and  obligations  of Frisby  Technologies,  Inc.,  a Delaware
corporation (the "Borrower") to Bank; and

     WHEREAS, Borrower has requested the Bank to extend the maturity date of its
revolving line of credit to Borrower (the "Loan"); and

     WHEREAS,  the Bank has agreed to so extend the  maturity  date of the Loan,
pursuant to the terms of an  Amendment to Loan  Agreement  dated as of even date
herewith between the Bank and the Borrower (the  "Amendment"),  provided,  among
other  things,  that the Guarantor  acknowledge  that payment of the Loan, as so
extended, is guaranteed by the Guarantor pursuant to the Guaranty,  and that the
Guarantor agree to amend the Guaranty; and

     WHEREAS,  the Guarantor  wishes to acknowledge that the Guaranty covers and
applies to the Loan, as extended pursuant to the terms of the Amendment; and

     WHEREAS,  the Guarantor  further  wishes to amend the Guaranty as set forth
below;

     NOW, THEREFORE,  in consideration of the premises and to induce the Bank to
extend  the  maturity  date of the Loan,  the  parties  hereto  agree  hereby as
follows:

     1. Acknowledgment of Guaranty.  Guarantor does hereby acknowledge and agree
that the Guaranty,  as amended hereby, is in full force and effect in accordance
with the terms thereof, and that the same covers and applies to the Loan, as the
same has been amended in accordance with the terms of the Amendment.

     2.  Amendment  to  Guaranty.  The  Guaranty is hereby  amended in the first
numbered  section  thereof,  by deleting the fourth  paragraph of such  section,
which paragraph  contained a limitation on the liability of the Guarantor to the
Bank.  It is expressly  provided that the liability of the Guarantor to the Bank
for and on account of the Loan and the Guaranty shall hereafter be unlimited and
unconditional.

     3.  Ratification of Guaranty.  The Guarantor  hereby  stipulates and agrees
that there exists no defense,  claim of setoff,  or claim in avoidance of any of
its  liabilities  or obligations  under or pursuant to the Guaranty,  as amended
hereby.

     4.   Counterparts.   This   Acknowledgment  may  be  executed  in  separate
counterparts, and said counterparts taken together shall be deemed to constitute
one and the same instrument.  An executed copy of this Acknowledgment  delivered
by telecopier shall have the same effect as an originally  executed copy of this
Acknowledgment.

     5. NO ORAL  AGREEMENT.  THIS WRITTEN  ACKNOWLEDGMENT  REPRESENTS  THE FINAL
AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

     IN  WITNESS  WHEREOF,  the  parties  hereto  have  executed  the  foregoing
Acknowledgment and Amendment Agreement as of the date first above written.



                                           _____________________________ (SEAL)
                                           JEFFRY D. FRISBY


                                           BANK OF AMERICA, N.A.

                                           By: __________________________
                                           Title: ________________________