EXHIBIT
10.35


 


SECOND AMENDMENT TO CREDIT AGREEMENT


 


This SECOND AMENDMENT TO
CREDIT AGREEMENT dated this 28th day of June, 2004 (this “Amendment”),
is made by and among UFP Technologies, Inc., a Delaware corporation, Moulded
Fibre Technology, Inc., a Maine corporation, Simco Industries, Inc., a Michigan
corporation, and Simco Automotive Trim, Inc., a Michigan corporation
(collectively, the “Borrowers”), and Fleet Capital Corporation (the “Lender”).


 


WHEREAS, the Borrowers
and the Lender are parties to a Credit and Security Agreement dated as of
February 28, 2003, as amended by that certain First Amendment to Credit
Agreement dated as of March 24, 2004 (as further amended, modified,
restated and supplemented, the “Credit Agreement”); and


 


WHEREAS, the Borrowers
and the Lender desire to amend certain provisions of the Credit Agreement, all
subject to the terms, conditions and limitations set forth herein;


 


NOW, THEREFORE, in
consideration of the foregoing and the agreements contained herein, the parties
hereby agree as follows:


 


1.             Capitalized Terms.


 


Capitalized terms used
herein which are defined in the Credit Agreement have the same meanings herein
as therein, except to the extent that such meanings are amended hereby.


 


2.             Amendments.  Subject to the satisfaction of the terms and
conditions set forth in Section 6 hereof, the Borrowers and the Lender
agree that the Credit Agreement is hereby amended, effective as of the date of
this Amendment, as follows:


 


(a)           Amendments
to Section 1.1 of the Credit Agreement.


 


(i)            Section 1.1 of the Credit Agreement
is amended by the addition thereto, in appropriate alphabetical order, of the
following definitions:


 


“‘Forming Equipment’
means the equipment and machinery to be purchased from R+S Technik GmbH by the
Borrowers using the proceeds of the Forming Equipment Term Loan pursuant to
Purchase Order Number 790249, and
constituting Forming Line Number lines 1
through 17.


 


“‘Forming Equipment
Term Loan’ means the $1,500,000 Forming Equipment Term Loan to be made by
the Lender as provided in Section 2.2A(a).”


 


“‘Forming Equipment
Term Loan Funding Date’ means the date upon which all of the conditions set
forth in Section 5 of the Second Amendment are satisfied, or are waived by
the Lender in accordance with Section 10.2 of this Agreement.”


 


“‘Forming Equipment
Term Loan Maturity Date’ means June 30, 2010, or such earlier date as
provided in Section 2.7 or Section 9.1.”


 

















 


“‘Forming Equipment
Term Note’ means the promissory note, substantially in the form of Exhibit
A-4 annexed hereto, issued by the Borrowers in favor of the Lender and
evidencing the Forming Equipment Term Loan.”


 


“‘Second Amendment’
means the Second Amendment to Credit Agreement dated as of June 28th,
2004 among the Borrowers and the Lender.”


 


“‘Second Amendment
Effective Date’ means the date upon which all of the conditions set forth
in Section 4 of the Second Amendment are satisfied, or are waived by the
Lender in accordance with Section 10.2 of this Agreement.”


 


(ii)           Section 1.1 of the Credit Agreement
is amended by deleting the definitions of “Borrowing Base,” “Loan Documents,”
“Loans,” “Non-Financed Capital Expenditures,” “Post-Default Rate” and “Term
Loans” in their entirety and replacing them with the following new definitions:


 


“‘Borrowing
Base’ means, at the relevant time of reference thereto, an amount
determined by the Lender by reference to the most recent Borrowing Base
Certificate/Collateral Update Certificate delivered to the Lender pursuant to
Section 2.1(b) which is equal to the sum of:


 


(a)           85% of Eligible
Accounts, provided
that at no time shall more than $500,000 in the aggregate of all
outstanding Eligible Accounts arise from the sale of tooling to account
debtors, plus


 


(b)                           the
lesser of:


 


(i)            the sum of:


 


(A)          50% of Eligible Raw
Material Inventory,


 


plus


 


(B)           50% of Eligible
Finished Goods Inventory,


 


and


 


(ii)           $3,500,000, minus


 


(c)           the Availability
Reserve, minus


 


(d)           reserves for foreign
exchange and interest rate derivative exposure and such other reserves as the
Lender in its reasonable credit judgment  shall deem appropriate from time to time;


 


In determining the
Borrowing Base from time to time, the Lender may, but shall not be required to,
rely upon reports or analyses generated by the Credit Parties (including,
without limitation, Borrowing Base Certificates/Collateral Update Certificates)
and reports or analyses generated by or on behalf of the Lender.  Notwithstanding anything to the contrary set
forth herein, the Lender may in its reasonable credit judgment at any time and
from time to time, adjust the percentages of


 


2

















 


Eligible Accounts,
Eligible Raw Materials Inventory, Eligible Finished Goods Inventory and undrawn
amount of Documentary LCs included within the Borrowing Base.”


 


“‘Loan
Documents’ means this Agreement, the Revolving Credit Note, the Equipment
Term Note, the Real Estate Term Note, the Forming Equipment Term Note, the
Control Agreements, the Mortgages, the Stock Pledge Agreement, the Hazardous
Materials Indemnity Agreement, and any other instruments or documents executed
and delivered or to be delivered to the Lender from time to time pursuant to
this Agreement, as the same may be supplemented and amended from time to time
in accordance with their respective terms.”


 


“‘Loans’
means the Revolving Loans, the Equipment Term Loan, the Real Estate Term Loan
and the Forming Equipment Term Loan.”


 


“‘Non-Financed
Capital Expenditures’ means Capital
Expenditures paid in cash and not financed with Indebtedness for borrowed
money; provided
that Capital Expenditures financed with the proceeds of Revolving
Loans shall be deemed to constitute “Non-Financed Capital Expenditures” for
purposes of this Agreement; provided however, that the portion of
Forming Equipment expenditures financed with the proceeds of Revolving Loans
shall not be deemed to constitute “Non-Financed Capital Expenditures” for
purposes of this Agreement.”


 


“‘Post-Default
Rate’ means, (i) for Term Loans and Revolving Loans, a rate per annum equal
to the Adjusted Base Rate plus the Applicable Margin plus two
percent (2%), and (ii) for Forming Equipment Term Loan, a rate per annum equal
to the Adjusted Base Rate plus two percent (2%).”


 


“‘Term Loans’
means, collectively, the Equipment Term Loan, the Real Estate Term Loan and the
Forming Equipment Term Loan.”


 


(b)           Amendment to
Section 2.2 of the Credit Agreement.  Section 2.2 of the Credit Agreement is amended by the
addition thereto of the following new Section 2.2A:


 


2.2A        Forming Equipment Term Loan.  Notwithstanding anything to the
contrary set forth in Section 2.2, the Forming Equipment Term Loan shall
be governed by this Section 2.2A:


 


(a)           Funding of the
Forming Equipment Term Loan. 
Subject to the terms and conditions set forth below, the Lender agrees
to fund the Forming Equipment Term Loan in four separate (4) draws as follows:


 


(i)            The Lender agrees to
fund $512,408.00 of the Forming Equipment Term Loan on the Forming Equipment
Term Loan Funding Date.


 


(ii)           Upon the request of the
Borrowers, the Lender agrees to fund an additional $256,204.00 of the Forming
Equipment Term Loan within one Business Day after the satisfaction of the
following terms and conditions:


 


(A)          The Lender shall have
received evidence in form and substance satisfactory to the Lender in its
commercially reasonable judgment that the Forming Equipment (including all
components thereof) has been delivered by R+S Technik GmbH to a shipping agent
(the “Approved Shipping Agent”) approved by the Borrowers and the
Lender, and at a ocean port acceptable to the


 


3

















 


Borrowers
and the Lender, and that title to the Forming Equipment has been transferred
from R+S Technik GmbH to the Borrowers;


 


(B)           The Lender shall have
received a facsimile copy of the bill of lading for the Forming Equipment from
the Approved Shipping Agent, and confirmation that the Approved Shipping Agent
has mailed the original bill of lading to the Lender by a recognized
international mail courier; and


 


(C)           The Lender shall have
received:  (1) evidence that the
Borrowers have obtained replacement value casualty insurance on the Forming
Equipment with an insurance company, with such deductibles, and covering such
terms and risks as are at all times satisfactory to the Lender in its
commercially reasonable judgment, (2) evidence that such policy of insurance
provides for at least 30 days prior written notice to the Lender of any
modifications or cancellation of such policy, and (3) a certificate from the
Borrowers’ insurance broker that such insurance is in full force and effect and
that the Lender has been named as loss payee thereunder.


 


(iii)          Upon the request of the
Borrowers, the Lender agrees to fund an additional $603,287.00 of the Forming
Equipment Term Loan within one Business Day after the satisfaction of the
following terms and conditions:


 


(A)          The Lender shall have
received evidence in form and substance satisfactory to the Lender in its
commercially reasonable judgment that the Forming Equipment has been received,
fully assembled and is operating in the Borrowers’ facility at 6077 Fulton
Industrial Park Boulevard in Atlanta, Georgia;


 


(B)           The Lender shall have
filed a financing statement filed as a fixture filing in the proper office in
the State of Georgia, for the purpose of perfecting its security interest in
the Forming Equipment, and shall have received evidence that as of the date of
such funding, the Forming Equipment is not subject to any Liens (other than
those in favor of the Lender); and


 


(C)           The Lender shall have
received an acknowledgement letter from Orix Financial Services in form and
substance satisfactory to the Lender acknowledging that it has no security
interest in or lien on the Forming Equipment.


 


(iv)          Upon the request of the
Borrowers, the Lender agrees to fund the remaining $128,101.00 of the Forming
Equipment Term Loan within one Business Day after the Lender shall have
received a certificate signed by a Designated Financial Officer and otherwise
in form and substance satisfactory to the Lender in its commercially reasonable
judgment certifying that (A) the Forming Equipment is performing to
specifications, (B) the Forming Equipment has been accepted by the Borrowers,
and (C) the Borrowers are required to deliver the final payment to R+S Technik
GmbH for the Forming Equipment; provided that the Lender shall have no
obligation to fund the fourth and final amount of the Forming Equipment Term
Loan if the Borrowers have not satisfied the conditions set forth in this
subsection (iv) within two months after the date of the funding of the
third portion of the Forming Equipment Term Loan pursuant to
Section 2.2A(a)(iii).


 


4

















 


Notwithstanding the
foregoing, the Lender shall have no obligation to fund any amounts of the
Forming Equipment Term Loan (x) if the Forming Equipment Term Loan Funding Date
shall have not occurred, or (y) on or after the date that is fifteen months
after the Second Amendment Effective Date. 
Principal amounts of the Forming Equipment Term Loan that have been repaid
or prepaid may not be reborrowed.


 


(b)           Interest on the
Forming Equipment Term Loan. 
Subject to Section 2.3 hereof, the outstanding principal amount of
the Forming Equipment Term Loan shall bear interest at a rate per annum equal
to the Adjusted Base Rate. 
Notwithstanding the foregoing, (i) any portion of the Forming Equipment
Term Loan which is not paid when due shall automatically bear interest until
paid in full at the Post-Default Rate, (ii) during the period when any Event of
Default of the type described in clauses (g), (h) or (i) of Section 9.1
shall have occurred and be continuing, the outstanding principal balance of the
Forming Equipment Term Loan shall automatically bear interest, after as well as
before judgment, at the Post-Default Rate, (iii) if there shall occur and be
continuing any Event of Default (other than an Event of Default of the type
described in clauses (g), (h) or (i) of Section 9.1), following written
notice delivered to the Borrowers from the Lender, the outstanding principal
balance of the Forming Equipment Term Loan shall bear interest, after as well
as before judgment, at the Post-Default Rate during the period beginning on the
date such Event of Default first occurred, and ending on the date such Event of
Default is cured or waived.  Accrued
interest on the outstanding principal balance of the Forming Equipment Term
Loan shall be payable in arrears on the first day of each month; provided
that interest accrued at the Post-Default Rate shall be payable on
demand, and all accrued interest on the Forming Equipment Term Loan shall be
payable on each date that any portion of the principal of the Forming Equipment
Term Loan shall be payable hereunder and on the Forming Equipment Term Loan
Maturity Date.  All interest hereunder
shall be computed on the basis of a year of 360 days, and in each case shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).


 


(c)           Repayment of Forming
Equipment Term Loan.  The Borrowers
hereby unconditionally promise to pay to the Lender monthly principal
installments in respect of the Forming Equipment Term Loan on the first day of
each month, commencing on the first day of the first month after the earlier of
(i) the date that is fifteen months after the Second Amendment Effective Date
or (ii) the date of the funding of the fourth and final portion of the Forming
Equipment Term Loan pursuant to Section 2.2A(a)(iv); provided that if the fourth
and final portion of the Forming Equipment Term Loan is not funded within two
months after the date of the funding of the third portion of the Forming
Equipment Term Loan pursuant to Section 2.2A(a)(iii), the monthly payments
of principal described above shall commence on the first day of the month
following the date that is two months after the funding of such third portion
of the Forming Equipment Term Loan. 
Payments of principal shall be paid in equal monthly installments in
amounts sufficient to amortize the outstanding principal balance of the Forming
Equipment Term Loan through the Forming Equipment Term Loan Maturity Date.  To the extent not previously paid, the
Forming Equipment Term Loan shall be due and payable in full on the Forming
Equipment Term Loan Maturity Date.


 


(d)           Loan Account.  The Lender shall maintain in accordance with
its usual practice an account evidencing the indebtedness of the Borrowers to
the Lender in respect of the Forming Equipment Term Loan, including the amounts
of principal and interest payable and paid to the Lender from time to time
hereunder.  The entries made in the
account maintained pursuant to this subsection 2.2A(d) shall be prima
facie evidence of the existence and amounts of the obligations recorded
therein; provided
that the failure of the Lender to maintain such account or any error


 


5

















 


therein
shall not in any manner affect the obligation of the Borrowers to repay the
Forming Equipment Term Loan in accordance with the terms of this Agreement.


 


(e)           Forming Equipment
Term Note.  Prior to the Second
Amendment Effective Date, the Borrowers shall prepare, execute and deliver to
the Lender the Forming Equipment Term Note evidencing the Borrowers’
obligations in respect of the Forming Equipment Term Loan.


 


(f)            Forming Equipment
Term Loan Termination Fee.  In
connection with any prepayment of the Forming Equipment Term Loan that occurs
on or prior to the third anniversary of the Second Amendment Effective Date,
the Borrowers shall: (i) notify the Lender in writing of such termination at
least 60 days prior to the date of such prepayment; (ii) repay the entire
principal balance of, and all accrued interest and fees owing with respect to,
the Forming Equipment Term Loan, and (ii) pay to the Lender a termination fee
equal to $20,000.


 


(c)           Amendments
to Section 2.3 of the Credit Agreement.


 


(i)            Section 2.3(a) of the Credit
Agreement is amended by deleting the last sentence thereof, and replacing it
with the following new sentence:


 


“The Borrowers shall not
be permitted to select any Eurodollar Interest Period for any Eurodollar
Borrowing that ends after the Revolving Credit Maturity Date, the Equipment
Term Loan Maturity Date, the Real Estate Term Loan Maturity Date or the Forming
Equipment Term Loan Maturity Date.”


 


(ii)           Section 2.3(b) of the Credit
Agreement is amended by deleting the first sentence thereof, and replacing it
with the following new sentence:


 


Each Eurodollar Borrowing
shall bear interest during the applicable Eurodollar Interest Period at a rate
per annum equal to the Eurodollar Rate plus the Applicable Margin; provided,
however, that the Forming Equipment Term Loan shall bear interest
during the applicable Eurodollar Interest Period at a rate per annum equal to
the Eurodollar Rate plus 2.75%.


 


(d)           Amendment to
Section 2.7(a) of the Credit Agreement.  Section 2.7(a) of the Credit Agreement
is amended by deleting the second sentence thereof, and replacing it with the
following new sentence:


 


“The Borrowers shall have
the right at any time and from time to time to prepay the Term Loans in whole
or in part, subject to prior notice in accordance with subsection 2.7(d),
subject to the payment of any amounts due under subsection 2.3(g), and,
with respect to the Forming Equipment Term Loan, subject to the provisions of
Section 2.2(f) and, if the Term Loans are repaid in full,
subsection 2.5(d), and provided that each such prepayment of the
Term Loans shall be in an amount that is at least equal to $250,000 or any
greater multiple of $100,000.”


 


(e)           Amendment to
Article 7 of the Credit Agreement.  Article 7 of the Credit Agreement is hereby amended by the
addition thereto of the following new Section 7.15:


 


“7.15  Landlord’s Waiver and Consent for Atlanta,
Georgia Property.  Within 60
days after the Second Amendment Effective Date, the Lender shall have received
a Landlord’s Waiver and Consent, in form and substance satisfactory to the
Lender, executed by InSite Real Estate
Development, L.L.C. with respect to the Borrower’s leased property
located at 6077 Fulton Industrial Park Boulevard, Atlanta, Georgia.”


 


6

















 


(f)            Amendment to
Section 8.10 of the Credit Agreement.  Section 8.10 of the Credit Agreement is amended by deleting
subsection (a) thereof in its entirety, and replacing it with the following
new subsection (a):


 


(a)           Fixed Charge
Coverage Ratio.  The Credit Parties
shall not permit the Fixed Charge Coverage Ratio for each fiscal period set
forth below to be less than the ratio set opposite such period:


 


	
  Period

  	
   

  	
  Minimum
  Fixed

  Charge Coverage Ratio

  	
   

  
	
  January 1,
  2004 through June 30, 2004

  	
   

  	
  0.75 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1,
  2004 through September 30, 2004

  	
   

  	
  0.80 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Any
  period of four consecutive fiscal quarters ending on or after
  December 31, 2004

  	
   

  	
  1.00 to 1.00.

  	
   

  



 


(g)           Amendment to
Section 9.1 of the Credit Agreement.  Section 9.1 of the Credit Agreement is amended by adding the
following new subsection (q):


 


“9.1(q)    the Borrowers shall have
failed to deliver the original bill of lading for the Forming Equipment
referred to in 2.2A(a)(ii)(B) within 5 Business Days after the funding of the
Forming Equipment Term Loan made in accordance with Section 2.2A(a)(ii).”


 


(h)           Addition of
Exhibit A-4 to the Credit Agreement.  Exhibit A-4 is hereby added to the Credit Agreement in the
form attached hereto.


 


3.             No Default;
Representations and Warranties, etc. 
The Borrowers hereby represent, warrant and confirm that: (a) the
representations and warranties of the Credit Parties contained in
Article 5 of the Credit Agreement are true and correct on and as of the
date hereof as if made on such date (except to the extent that such
representations and warranties expressly relate to an earlier date); (b) after
giving effect to this Amendment, the Borrowers are in compliance with all of
the terms and provisions set forth in the Credit Agreement and the other Loan
Documents; (c) after giving effect to this Amendment, no Default has occurred
and is continuing; and (d) the execution, delivery and performance by the
Borrowers of this Amendment (i) have been duly authorized by all necessary
action on the part of the Borrowers, (ii) will not violate any applicable law
or regulation or the organizational documents of any Borrower, (iii) will not
violate or result in a default under any indenture, agreement or other
instrument binding on any Borrower or any of its assets, and (iv) do not
require any consent, waiver or approval of or by any Person (other than the
Lender) which has not been obtained.


 


4.             Conditions to
Effectiveness.  The effectiveness of
this Amendment shall be subject to the satisfaction of the following conditions
precedent:


 


(a)           the
Lender shall have received counterparts of this Amendment duly executed by each
of the Borrowers;


 


(b)           the
Lender shall have received a Forming Equipment Term Note duly executed by each
of the Borrowers;


 


7

















 


(c)           the
Lender shall have received a Certificate of the Secretary of each of the
Borrowers, certifying that this Amendment has been duly authorized by the
Boards of Directors of such Borrower; and


 


(d)           the
Lender shall have received a favorable written opinion (addressed to the Lender
and dated as of the date hereof) of Lynch, Brewer, Hoffman & Fink, LLP,
counsel to the Borrowers, with respect to this Amendment and such other matters
as the Lender may reasonably request.


 


5.             Conditions to
Forming Equipment Term Loan Funding Date. The Lender shall fund the first
draw of the Forming Equipment Term Loan upon the satisfaction of the following
conditions precedent:


 


(a)           All of
the conditions to the Second Amendment Effective Date shall have been
satisfied, or waived by the Lender in accordance with Section 10.2 of the
Credit Agreement; and


 


(b)           The
Lender shall have received a letter of credit for the account of R+S Technik GmbH
in favor of the Lender, in the amount of at least US $512,408.00, drawn on a
bank acceptable to the Lender, and confirmed by a United States bank acceptable
to the Lender, and otherwise in form and substance satisfactory to the Lender.


 


6.             Miscellaneous.


 


(a)           Except as
specifically amended hereby, all of the terms and provisions of the Credit
Agreement, the other Loan Documents and all related documents, shall remain in
full force and effect.


 


(b)           This
Amendment may be executed in any number of counterparts, each of which, when
executed and delivered, shall be an original, but all counterparts shall
together constitute one instrument. 
Delivery of an executed signature page hereto by facsimile transmission
shall be effective as delivery of a manually executed counterpart hereof.


 


(c)           This
Amendment shall be governed by the laws of The Commonwealth of Massachusetts
and shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns. 
This Amendment shall be deemed to be a sealed instrument as of the date
first above written.


 


(d)           The
Borrowers shall reimburse the Lender for all reasonable costs and expenses,
including reasonable legal fees and disbursements, incurred by the Lender in
connection with this Amendment and the transactions contemplated hereby.


 


 


[The remainder of
this page is intentionally left blank.]


 


8

















 


IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be duly executed under seal by
their respective authorized officers as of the day and year first above
written.


 


	
   

  	
  BORROWERS

  
	
   

  	
   

  
	
   

  	
  UFP TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  Ronald J. Lataille

  	
   

  
	
   

  	
  Name:  

  	
  Ronald J. Lataille

  
	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MOULDED FIBRE
  TECHNOLOGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  Ronald J. Lataille

  	
   

  
	
   

  	
  Name:  

  	
  Ronald J. Lataille

  
	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SIMCO INDUSTRIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  Ronald J. Lataille

  	
   

  
	
   

  	
  Name:  

  	
  Ronald J. Lataille

  
	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SIMCO AUTOMOTIVE TRIM,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
           /s/ Ronald J.
  Lataille

  	
   

  
	
   

  	
  Name:  

  	
  Ronald J. Lataille

  
	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LENDER

  
	
   

  	
   

  	
   

  
	
   

  	
  FLEET CAPITAL
  CORPORATION, as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  Daniel P. Corcoran, Jr.

  	
   

  
	
   

  	
  Name:  

  	
  Daniel P. Corcoran, Jr.

  
	
   

  	
  Title:

  	
  SVP

  
						



 


 


Second Amendment
to Credit Agreement


 

















 


Exhibit A-4


FORMING EQUIPMENT TERM NOTE


 




	
  Up to $1,500,000

  	
   

  	
  June 28,
  2004

  






 


 


FOR VALUE RECEIVED, the
undersigned, UFP Technologies, Inc., a Delaware corporation, Moulded Fibre
Technology, Inc., a Maine corporation, Simco Industries, Inc., a Michigan
corporation, and Simco Automotive Trim, Inc., a Michigan corporation, as joint
and several borrowers, (collectively the “Borrowers”), promise to pay to the
order of FLEET CAPITAL CORPORATION (the “Lender”), at the place and times
provided in the Credit Agreement referred to below the principal sum of


 


ONE MILLION FIVE HUNDRED THOUSAND
DOLLARS ($1,500,000),


 


or, if less, the
principal amount of, and interest accrued on, the Forming Equipment Term Loan
made by the Lender from time to time pursuant to that certain Credit and
Security Agreement dated as of February 28, 2003, as amended by that
certain First Amendment to Credit Agreement dated as of March 24, 2004 and
that certain Second Amendment to Credit Agreement dated as of June 28,
2004 (together with all amendments and other modifications, if any, from time
to time hereafter made thereto, the “Credit Agreement”) among the Borrowers,
the Guarantors named therein, and the Lender. 
This Forming Equipment Term Note is being executed and delivered by the
Borrowers pursuant to subsection 2.2A(e) of the Credit Agreement.  Capitalized terms used herein and not
defined herein shall have the meanings ascribed to them in the Credit Agreement.


 


The Borrowers are
obligated to make regularly scheduled payments of principal to the Lender as
provided in subsection 2.2A(c) of the Credit Agreement.  In addition, the unpaid principal amount of
this Forming Equipment Term Note from time to time outstanding is subject to
mandatory prepayment from time to time as provided in the Credit Agreement and
shall bear interest as provided in the Credit Agreement.  All payments of principal and interest on
this Forming Equipment Term Note shall be payable in lawful currency of the
United States of America in immediately available funds to the Lender.


 


This Forming Equipment
Term Note is entitled to the benefits of, and evidences obligations incurred
under, the Credit Agreement, to which reference is made for a description of
the security for this Forming Equipment Term Note and for a statement of the
terms and conditions on which the Borrowers are permitted and required to make
prepayments and repayments of principal of the obligations evidenced hereby and
on which such obligations may be declared to be immediately due and payable.


 


THIS FORMING EQUIPMENT
TERM NOTE SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE COMMONWEALTH OF MASSACHUSETTS, WITHOUT REFERENCE TO THE CONFLICTS OR
CHOICE OF LAW PRINCIPLES THEREOF.


 

















 


The Borrowers hereby
waive all requirements as to diligence, presentment, demand of payment, protest
and (except as required by the Credit Agreement) notice of any kind with
respect to this Forming Equipment Term Note.


 


IN WITNESS WHEREOF, the
undersigned Borrowers have executed this Forming Equipment Term Note under seal
as of the day and year first above written.


 


 


	
   

  	
  UFP TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  Ronald J. Lataille

  	
   

  
	
   

  	
  Name:  

  	
  Ronald J. Lataille

  
	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  MOULDED FIBRE
  TECHNOLOGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  Ronald J. Lataille

  	
   

  
	
   

  	
  Name:  

  	
  Ronald J. Lataille

  
	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  SIMCO INDUSTRIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  Ronald J. Lataille

  	
   

  
	
   

  	
  Name:  

  	
  Ronald J. Lataille

  
	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  SIMCO AUTOMOTIVE TRIM,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
           /s/ Ronald J.
  Lataille

  	
   

  
	
   

  	
  Name:  

  	
  Ronald J. Lataille

  
	
   

  	
  Title:

  	
  Treasurer