Document:

Prepared by MerrillDirect

Exhibit 10.45

REVOLVING LINE OF
CREDIT, ACQUISITION LINE OF CREDIT, TERM LOAN 

AND

MORTGAGE LOAN AGREEMENT

             This
Revolving Line of Credit, Acquisition Line of Credit, Term Loan and Mortgage
Loan Agreement (this “Agreement”) is made as of this 4th day of June, 2001 by
and between UFP Technologies, Inc.,
a Delaware corporation, having an address of 172 East Main Street, Georgetown,
MA 01833 ("UFP"), Moulded Fibre
Technology, Inc. a Maine corporation, having an address of 301 U.S.
Route 1, Scarborough, ME 04074 (“MFT”), Simco
Industries, Inc., a Michigan corporation, having an address of 51362
Quadrate Drive, Macomb Township, Michigan 48042 (“Simco”), Simco Automotive Trim, Inc., a Michigan
corporation, having an address of 51362 Quadrate Drive, Macomb Township,
Michigan 48042 (“SAT”) and Citizens Bank of
Massachusetts, a Massachusetts banking corporation, having an
address of 28 State Street, Boston, MA 02109 (the "Lender").  UFP, MFT, Simco and SAT are sometimes
collectively referred to herein as the “Borrower”.

             WHEREAS,
the Borrower and the Lender hereby desire to enter into this Agreement in order
to provide for (i) a revolving loan credit facility for the working capital
needs of Borrower; (ii) an acquisition line of credit to provide acquisition
financing to Borrower; (iii) a term loan to term out existing loans with
Lender; and (iv) a mortgage term loan to refinance existing indebtedness of
Borrower with respect to a  commercial
real estate property located at 172 East Main Street, Georgetown, MA (the “Property”),
by the Lender to the Borrower upon the terms set forth herein.

             The
Borrower and the Lender hereby respectively act and agree as follows:

1.          Definitions.

1.1.  Defined
Terms.  As used in this Agreement,
the following terms shall have the meanings set forth below:

             “Accounts Receivable” means all
Borrower’s accounts, accounts receivable, rental and lease payments receivable,
contract rights, notes, bills, drafts, acceptances, instruments, documents,
chattel paper and all other debts, obligations and liabilities in whatever form
owing to Borrower from any Person (as defined below) for goods sold by it or
for services rendered by it, or however otherwise established or created, all
guaranties and security therefor, all right, title and interest of Borrower in
the goods or services which gave rise thereto, including rights to reclamation
and stoppage in transit and all rights of an unpaid seller of goods or
services; whether any of the foregoing be now existing or hereafter arising,
now or hereafter received by or owing or belonging to Borrower.

             "Aggregate
Revolving Loans" - The aggregate principal amount of the Revolving
Loans from the Lender to the Borrower outstanding at any time.

             "Acquisition
Loan" - The Loans made by the Lender pursuant to Section 2.2 of this
Agreement.

             “Acquisition
Loan Maturity Date” means April 30, 2003.

             "Acquisition
Note(s) " - The Acquisition Line of Credit Note of the Borrower to
Lender in the original principal amount of $4,000,000.00 and any additional
notes executed and delivered by Borrower to Lender in accordance with Section
2.2(c) below.

             “Applicable
Margin” means the number of Basis Points (“bps”) in the table set forth
below corresponding to the then applicable Total Funded Debt to EBITDA Ratio
and corresponding to either the LIBOR Rate or the Prime Rate as elected by
Borrower.

	Total Funded Debt to
 EBITDA Ratio	LIBOR
  Rate	 	Prime
  Rate	 
	

	

	

	

	

	when less than 2.00x	125
  bps	 	0
  bps	 
	when less than 2.50x	150
  bps	 	0
  bps	 
	when less than 3.00x	175
  bps	 	0
  bps	 
	when less than 3.25x	200
  bps	 	0
  bps	 
	when less than 3.50x	225
  bps	 	13
  bps	 
	when greater than or equal to 3.50x	250
  bps	 	25
  bps	 
							

Changes in the Applicable Margin shall occur on the third Banking Day after
quarterly financial statements and quarterly compliance certificates have been
received by Lender in accordance with Section 7.1.b. below, as applicable.  During any period when an Event of Default
shall have occurred and be continuing or in the event that Borrower fails to
provide Lender with the quarterly financial statements and quarterly compliance
certificates for any fiscal quarter of Borrower on the due date thereof (which
Event of Default or failure to provide such quarterly financial statements and
quarterly compliance certificates  is
not waived or extended as provided herein), then until such Event of Default is
cured or waived or such financial information is provided, as the case may be,
the Applicable Margin shall be equal to the maximum amount set forth in the
table above subject to adjustment effective upon actual receipt of such
financial information.   For purposes of
determining the Applicable Margin, no extra grace or cure period beyond the
date specified in Section 7.1.b. for delivery of the quarterly financial
statements and quarterly compliance certificates shall apply.

             “Applicable
Maturity Date” means (a) with respect to the Revolving Loan, the Revolving
Loan Maturity Date, (b) with respect to the Acquisition Loan, the Acquisition
Loan Maturity Date, (c) with respect to the Term Loan, the Term Loan Maturity
Date, and (d) with respect to the Mortgage Loan, the Mortgage Loan Maturity
Date.

             “Applicable
Rate” means, at any date, the sum of:

(a)                     
            (i)          with respect to each portion of the Loans subject to a LIBOR
Rate Option, the sum of the Applicable Margin (which may change during the
Interest Period in accordance with the definition of “Applicable Margin”) plus
the LIBOR Rate with respect to such LIBOR Rate Option; or

 

                                        (ii)
        with respect to each other portion
of the Loans, the sum of the Applicable Margin (which may change during the
Interest Period in accordance with the definition of “Applicable Margin”) plus
the Prime Rate;

             plus      (b)        an
additional four percent (4.0%) per annum effective upon the occurrence and
continuance of an Event of Default after the expiration of any applicable grace
or cure periods until the earlier of such time as (i) such Event of Default is
no longer continuing or (ii) such Event of Default is deemed to no longer
exist, in each case pursuant to Section 8.1 of this Agreement.

             “Basis
Point” means one one-hundredth of one percent (1/100%);

             "Borrowing
Base" - An amount equal to the sum of (i) 80% of the Borrower's
Eligible Receivables outstanding from time to time, plus (ii) 50% of
Borrower’s Eligible Finished Goods Inventory,
plus (iii) 50% of
Borrower’s Eligible Raw Materials Inventory provided
that (A) the aggregate amount of advances based upon Borrower’s
Eligible Finished Goods Inventory shall not exceed $750,000.00, and (B) the
aggregate amount of advances based upon Borrower’s Eligible Raw Materials
Inventory plus Borrower’s Eligible Finished Goods Inventory shall not exceed
$3,000,000.00; minus
(iv) 100% of the aggregate amount of commercial and stand-by letters of credit
issued by the Bank for the account of the Borrower and all outstanding banker’s
acceptances and bill of lading guaranties issued for the account of the
Borrower.

Lender hereby reserves the right,
exercisable in its sole discretion in the event that it determines in good
faith that there has occurred a significant change or deterioration in the
composition, character or quality of the Collateral, to adjust any of the
percentages set forth above on ten (10) days notice to the Borrower.

             "Business
Day" - any day on which the Lender is open for business.

             “Capital
Expenditures” - All acquisitions of machinery, equipment, land, leaseholds,
buildings, improvements and all other expenditures considered to be fixed
assets under GAAP, consistently applied. 
Where an asset is acquired under a Capital Lease, the amount required to
be capitalized shall be considered a Capital Expenditure during the first year
of the lease.

             "Capital
Leases" - All leases which are required to be capitalized pursuant to
Statement of Financial Accounting Standards No. 13 or any successor
thereto.

             “Change
in Control”shall mean the occurrence of any of the following:

                           (a)
        the acquisition, by any group of
persons (within the meaning of the Securities Exchange Act of 1934, as amended)
or by any Person, of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission) of greater than 50% of the issued and
outstanding capital stock of the Borrower having the right, under ordinary
circumstances, to vote for the election of directors of the Borrower.

                           (b)        more
than half of the persons who were directors of the Borrower on the first day of
any period consisting of twelve (12) consecutive calendar months (the first of
which twelve (12) month periods commencing with the first day of the month
during which this Agreement was executed), cease, for any reason other than
death or disability, to be directors of Borrower.

             “Collateral”
- as defined in the Security Agreements given by UFP, MFT, Simco and SAT in
favor of Lender of even date herewith and any other collateral pledged by
Borrower in connection with this Agreement as security for the Obligations.

             “Debt
Service” means the sum of the Borrower’s interest expense for such period plus the aggregate principal of the
Borrower’s Indebtedness for borrowed money (including the Loans, but excluding
principal payments that could result from occurrence of the expiration date)
payable during such period plus
the Borrower’s aggregate payments due during such period with respect to
Capital Leases (to the extent not already counted toward Debt Service).

             “Debt
Service Coverage Ratio”- For any fiscal period of the Borrower, the
following formula which shall apply to the Borrower on a consolidated
basis:  Operating Cash Flow divided by
Debt Service.

             “Distributions” 
- for the applicable period, the aggregate of all amounts paid or
payable (without duplication) as dividends, distributions or owner withdrawals,
and includes any purchase, redemption or other retirement of any ownership
interests directly or indirectly through a subsidiary or otherwise and includes
return of capital to members.

             “EBITDA”
– For any period, the Borrower’s earnings before interest, taxes, depreciation
and amortization, determined in accordance with GAAP to be calculated on a rolling
four-quarter basis.

             “Eligible
Finished Goods Inventory” - Inventory which satisfies the definition of
Eligible Inventory but constitutes only finished goods.

             “Eligible
Inventory” - Inventory owned by the Borrower consisting of raw materials or
finished goods but excluding work-in-process, valued (net of reserves), at the
lower of market value or the Borrower’s cost, on a first-in, first-out basis
which is initially and at all times until sold: not more than one (1) year old,
new and unused, in first-class condition, merchantable and saleable through
normal trade channels; at a location in the Commonwealth of Massachusetts which
location is directly leased or owned by Borrower (and, if applicable, as to
which Lender shall have received, if required in its discretion, a Landlord’s
Waiver); covered by insurance naming Lender as loss payee in accordance with
the Security Agreement; subject to a perfected first-priority security interest
in favor of Lender; owned by the Borrower free and clear of any Lien except in
favor of Lender or as permitted under this Agreement and not subject to any
judgment, order or decree which restricts or prevents the Borrower from selling
the same; and which has not been designated by Lender in its discretion as
unacceptable for any reason by notice to the Borrower; provided that
Inventory shall be excluded for purposes of determining the
Borrowing Base if such items are located at a third party manufacturer and not
in the immediate possession of Borrower.

             “Eligible
Raw Materials Inventory” - Inventory which satisfies the definition of
Eligible Inventory but constitutes only raw materials.

             "Eligible
Receivables" - Account Receivables owing to the Borrower which
initially and at all times until collected in full:

             (a)
is not more than sixty (60) days from the due date of invoice;

             (b)
arose in the ordinary course of business from the domestic performance of
services or the outright sale, lease or rental of goods (excluding conditional
sale and sale or return); such services have been performed or such goods have
been shipped to or otherwise delivered for the use of  the account debtor; and in the case of goods, Borrower has
possession of or has delivered to Lender shipping and delivery receipts
evidencing shipment;

             (c)
is not owed by an account debtor who is an employee or parent, subsidiary or
other affiliate of Borrower, unless Lender has approved such account debtor in
writing, which approval shall not unreasonably be withheld in the event that
all transactions with such account debtor are on arm’s length market terms;

             (d)
is not evidenced by a promissory note or other instrument, is subject to a
perfected security interest in favor of Lender and is not subject to any other
Lien (other than a Permitted Lien);

             (e)
is a non-contingent obligation that is not subject to a claim or threatened
claim of set-off, credit, defense, warranty claim, allowance or adjustment by
the account debtor except normal discount allowed in the ordinary course for
prompt payment, and such account debtor has not complained as to its liability
thereon nor returned any of the subject goods;

             (f)  did not arise out of any sale made on an
advanced billing, bill and hold, dating or delayed shipment basis, and are not
billings for customer deposits;

             (g)
is owed by an account debtor as to which Borrower has received no notice and
has no knowledge of bankruptcy, insolvency or other facts which make collection
doubtful, and has not been turned over to a collection agency or attorney;

             (h)
the account debtor is not located in any state denying creditors access to its
courts in the absence of such creditor's qualification to conduct business as a
foreign corporation in such state or complying with other filing or reporting
requirements unless Borrower has or shall file all legally required filings and
reports, obtained any necessary authorities or certificates to do business, and
paid any applicable taxes and/or fees to the applicable state agency in such
state, or is not required to do so;

             (i)
if owed by the United States of America, has upon Lender’s request therefor
been properly assigned to Lender pursuant to the Federal Assignment of Claims
Act, and is not subject to any right of offset or other claims;

             (j)
has not been designated by Lender in its sole discretion based upon Lender's
customary and reasonable credit practices as unacceptable for any reason by
notice (which need not be in writing) to Borrower;

              (k) accounts payable by Borrower to an
account debtor shall be netted against Eligible Receivables due from such
debtor and the difference (if positive) shall constitute Eligible Receivables
from such account debtor for purposes of determining the Borrowing Base;

             (l)
is not owed by an account debtor whose principal place of business is located
outside of the United States of America unless insured with credit insurance
acceptable to Lender and with respect to which Lender is named as loss payee or
backed by a letter of credit acceptable to the Lender;

             (m)
if more than twenty-five (25%) percent of the Account Receivables due from any
account debtor are more than ninety (90) days from invoice date, none of the
Accounts from such account debtor shall be Eligible Receivables until such time
as less than twenty-five (25%) of Accounts due from such account debtor are, as
a result of payments made to the Borrower thereon, more than ninety (90) days
from invoice date.

             Characterization
of any Account Receivable due from an account debtor as an Eligible Receivable
shall not be deemed a determination by Lender as to its actual value nor in any
way obligate Lender to accept any Account Receivable subsequently arising from
such account debtor to be, or to continue to deem such Account Receivable to
be, an Eligible Receivable; it is Borrower's responsibility to determine the
creditworthiness of account debtors and all risks concerning the same and
collection of Accounts Receivable are with Borrower.  All Accounts Receivable which are not Eligible Receivables also
constitute Collateral.

             "ERISA"
- the Employee Retirement Income Security Act of 1974, as amended.

             "Event
of Default" - As defined in Section 8.1.

             "Expiration
Date" - April 30, 2003, subject to extension in the Lender's sole
discretion.

             “GAAP”
- generally accepted accounting principles consistently applied.

             "Indebtedness"
- The total of all obligations of a Person, whether current or long-term, which
in accordance with generally accepted accounting principles would be included
as liabilities upon such Person's balance sheet at the date as of which
Indebtedness is to be determined, and shall also include guaranties,
endorsements (other than for collection in the ordinary course of business) or
other arrangements whereby responsibility is assumed for the obligations of
others, whether by agreement to purchase or otherwise acquire the obligations
of others, including any agreement, contingent or otherwise, to furnish funds
through the purchase of goods, supplies or services for the purpose of payment
of the obligations of others.

             “Interest
Period” means with respect to a 
LIBOR Rate Loan, the period commencing on the date of the making of such
LIBOR Rate Loan and ending one, two, three, six, nine or twelve months
thereafter depending upon the duration of the LIBOR Rate Loan, but not later
than the Applicable Maturity Date.

             "Inventory"
- All goods now owned or hereafter acquired by a Person and intended for sale,
including raw materials, work-in-process and finished goods, which would, in
accordance with generally accepted accounting principles, be classified as inventory
of a Person conducting a business the same as or similar to that of such
Person.

             “Letter(s)
of Credit” shall have the meaning as set forth in Section 2.7(a) of this
Agreement.

             “LIBOR
Breakage Costs” shall mean with respect to any LIBOR Rate Loan, the product
of (i) the amount of the LIBOR Rate Loan which is pre-paid or failed to be
borrowed times (ii) the difference between the existing LIBOR Offer Rate on
said LIBOR Rate Loan and the rate at which Bank reasonably determines that such
amounts can be placed in the London Interbank Market or in United States
Government Securities (whichever rate is higher) for the remainder of the
Interest Period times (iii) the number of days until the expiration of the
Interest Period divided by 360.

             “LIBOR
Rate Loan” shall mean the Loan(s) at such times as they bear interest
calculated pursuant to the LIBOR Rate Option.

             “LIBOR
Offer Rate” means, as applicable to any LIBOR Rate Loan and the LIBOR Rate
Option, the rate per annum (rounded upward, if necessary, to the nearest 1/32
of one percent) as determined on the basis of the offered rates for deposits in
U.S. dollars, for a period of time comparable to such LIBOR Rate Loan which
appears on the Telerate page 3750 as of 11:00 a.m. London time on the day that
is two London Banking Days preceding the first day of such LIBOR Rate Loan;
provided, however, if the rate described above does not appear on the Telerate
System on any applicable interest determination date, the LIBOR rate shall be
the rate (rounded upwards as described above, if necessary) for deposits in
dollars for a period substantially equal to the interest period on the Reuters
Page “LIBO” (or such other page as may replace the LIBO Page on that service
for the purpose of displaying such rates), as of 11:00 a.m. (London Time), on
the day that is two (2) London Banking Days prior to the beginning of such
Interest Period.  “Banking Day” shall
mean in respect of any city, any date on which commercial banks are open for business
in that city.  If both the Telerate and
Reuters system are unavailable, then the rate for that date will be determined
on the basis of the offered rates for deposits in U.S. dollars for a period of
time comparable to such LIBOR Rate Loan which are offered by four major banks
in the London interbank market as approximately 11:00 a.m. London time, on the
day that is two (2) London Banking Days preceding the first day of such LIBOR
Rate Loan as selected by the Calculation Agent.  The principal London office of each of the four major London banks
will be requested to provide a quotation of its U.S. dollar deposit offered
rate.  If at least two such quotations
are provided, the rate for that date will be arithmetic mean of the quotations.  If fewer than two quotations are provided as
requested, the rate for that date will be determined on the basis of the rates
quoted for loans in U.S. dollars to leading European banks for a period of time
comparable to such LIBOR Rate Loan offered by major banks in New York City at
approximately 11:00 a.m. New York City time, on the day that its two London
Banking Days preceding the first day of such LIBOR Rate Loan.  In the event that Bank is unable to obtain
any such quotation as provided above, it will be deemed that LIBOR pursuant to
a LIBOR Rate Loan cannot be determined. 
In the event that the Board of Governors of the Federal Reserve System
shall impose a Reserve Percentage with respect to LIBOR deposits of Bank then
for any period of funding for which such Reserve Percentage shall apply, LIBOR
shall be equal to the amount determined above divided by an amount equal to 1
minus the Reserve Percentage.

             “LIBOR Rate Option”
means Borrower’s option to elect to pay interest with respect to the Loan at a
per annum rate equal to the sum of the LIBOR Offer Rate, plus the Applicable
Margin.

             "Lien"
- Any mortgage, pledge, assignment, lien, charge, encumbrance or security
interest of any kind whatsoever, or the interest of a vendor or lessor under a
conditional sale, title retention or capital lease agreement.

             "Loans"
- Any Obligations of the Borrower to the Lender under this Agreement, including
under the Revolving Loan, the Acquisition Loan, the Term Loan and the Mortgage
Loan.

             “Loan
to Value Ratio” shall mean the outstanding balance of the Mortgage Loan
divided by the fair market value of the Mortgaged Property as determined by an
appraisal acceptable to Lender in its sole discretion and performed by an
appraiser acceptable to Lender in its sole discretion.

             “Maximum
Acquisition Loan Credit” - $4,000,000.00

             “Maximum
Revolving Loan Credit” - $10,000,000.00

             “Material
Adverse Change” means any event, fact, circumstance, change in, or effect
on, the business of the Borrower which, individually or in the aggregate, on a
cumulative basis with any other circumstances, changes in, or effect on the
Borrower or its assets which:

             (a)         is, or could be reasonably expected to be, materially adverse
to the business, operations, assets or liabilities (including, without
limitation, contingent liabilities), employee relationships, customer or
supplier relationships, results of operations or the condition (financial or
otherwise) of the Borrower;

             (b)        could be reasonably expected to be to materially adversely
affect the ability of the Borrower to operate or conduct business in all material
respects in the manner in which it is currently operated or conducted by the
Borrower or to perform its obligations under the Loan Documents; or

             (c)         could be reasonably expected to have a material adverse
effect or result in an adverse change in value, enforceability, collectability
or the nature of its assets.

             "Mortgage"
-  a certain Mortgage and Security
Agreement by Borrower to Lender of even date herewith covering the Mortgaged
Property.

             “Mortgage
Loan” - As defined in Section 2.4 of this Agreement.

             “Mortgage Loan Maturity
Date” means June 4, 2006.

             "Mortgage
Note" - The Promissory Note of even date herewith by Borrower to
Lender in the original principal amount of $2,500,000.00.

             “Mortgaged
Property" - the real property located at 172 East Main Street, Georgetown, MA as more particularly
described in the Mortgage.

             "Notes"
- collectively, the Revolving Note, the Acquisition Note, the Term Note and the
Mortgage Note.

             “Obligations”
means all loans, advances, debts, liabilities, obligations (including without
limitation for reimbursement in connection with guaranties and letters of
credit), agreements, undertakings, covenants and duties owing or to be
performed or observed by Borrower  to or
in favor of Lender, of every kind and description (whether or not: evidenced by
any note or other instrument; for the payment or money; arising out of this
Agreement or any other agreement between Lender and Borrower, or any other
instrument of Borrower in favor of Lender; arising out of or relating or similar
to transactions described herein; or contemplated as of the date hereof),
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, including without limitation all interest, fees, charges,
and amounts chargeable to Borrower under this Agreement, the Notes or the
Letters of Credit;  “Obligations”
includes any swap transaction or other interest rate protection transaction
involving the Lender (or any parent, subsidiary or affiliate of Lender) and the
Borrower.

             “Operating
Cash Flow” - EBITDA less non-financed Capital Expenditures less
Distributions less cash taxes by Borrower

             "PBGC"
- Pension Benefit Guaranty Corporation

             "Person"
- An individual, corporation, partnership, joint venture, trust, or
unincorporated organization, or a government or any agency or political
subdivision thereof.

             “Prime
Rate” - The variable per annum rate of interest so designated from time to
time by the Lender as its prime rate. 
The Prime Rate is a reference rate and does not necessarily represent
the lowest or best rate being charged to any customer.  The rate of interest hereunder shall change
simultaneously and automatically, without further notice, upon the Lender’s
determination and designation from time to time of the Prime Rate.  The Lender’s determination and designation
from time to time of the Prime Rate shall not in any way preclude the Lender
form making loans to other borrowers at rates that are higher or lower than or
different from the referenced rate.

             "Revolving
Loan(s)" - The Loans made by the Lender pursuant to Section 2.1 of
this Agreement.

             “Revolving
Loan Maturity Date” means April 30, 2003.

             "Revolving
Note " - The Revolving Line of Credit Note of the Borrower to Lender
in the original principal amount of $10,000,000.00.

             "Security Agreements"
- As defined in Section 3.1 of this Agreement.

             “Senior
Funded Debt” means the total of (i) indebtedness or liability of Borrower
for borrowed money; (ii) obligations of Borrower as lessee under capital
leases; (iii) obligations of Borrower under letters of credit issued for the
account of the Borrower, and (iv) obligations of Borrower secured by any lien
on property owned by the Borrower whether or not the obligations have been
assumed by a third party, unless any of the foregoing described in (i) through
(iv) above, are subordinated in favor of Lender on terms and conditions
acceptable to Lender.

             “Subordinated
Debt” means Indebtedness of Borrower subordinated in writing in a manner
approved by Lender to the prior payment, in full, of the Notes and all other
monetary obligations owed by Borrower to Lender.

             “Tangible
Net Worth” means the excess of Borrower’s assets over Borrower’s
liabilities minus (i) goodwill, if any, unamortized patent costs, intangibles
(as determined in accordance with GAAP), and (ii) accounts receivable as
defined by generally accepted accounting standards and Indebtedness owing to
Borrower from any employee or parent, subsidiary or other affiliate of
Borrower.

             "Term
Loan" - The term loan made by the Lender pursuant to Section 2.3 of
this Agreement.

             “Term
Loan Maturity Date” means June 4, 2006.

             "Term
Note " - The Term Note of the Borrower to Lender in the original
principal amount of $6,500,000.00.

             “Total
Funded Debt”means all borrowed money as reflected in Borrower’s
consolidated financial statements.

             “Total
Funded Debt to EBITDA Ratio” means the ratio of Total Funded Debt to EBITDA
to be tested on a quarterly basis.

             1.2.  Use of Defined Terms.  Any defined term used in the plural preceded
by the definite article shall be taken to encompass all members of the relevant
class.  Any defined term used in the
singular preceded by "any" shall be taken to indicate any number of
the members of the relevant class.

             2.          Terms of Loan Facilities.

             2.1.
      Revolving Line of Credit.

             2.1
(a).  Revolving Loan(s).   Subject to the terms and conditions
hereinafter set forth, Lender will make loans to the Borrower (the
"Revolving Loans"), in the sole discretion of Lender in each
instance, at the address of Lender set forth above in an aggregate principal
amount not exceeding the lesser of (i) the Maximum Revolving Loan Credit or
(ii) the Borrowing Base then in effect on any Business Day prior to the first
to occur of (i) the Revolving Loan Maturity Date or (ii) the earlier termination
of this Agreement pursuant to Section 8.1 of this Agreement in such amounts as
the Borrower may request.  The Revolving
Loans shall be evidenced by the Revolving Note of the Borrower, dated as of the
date hereof.  Provided no Events of
Default beyond any applicable cure periods exist under this Agreement or the
other Loan Documents, Borrower may from time to time, borrow, repay and
re-borrow principal under the Revolving Note so long as the outstanding
Aggregate Revolving Loans do not exceed the Maximum Revolving Loan Credit or
the Borrowing Base then in effect. The Borrower may also request commercial and
stand-by letters of credit under the Revolving Loan as more particularly set
forth in Section 2.7 below, but in no event shall the sum of the Aggregate
Revolving Loans and Letters of Credit exceed the lesser of the Maximum
Revolving Loan Credit or the Borrowing Base. 
The Borrower shall repay in full all amounts due under the Revolving
Note upon the first to occur of (i)  the Revolving Loan Maturity Date
(unless the same is extended by the Lender in its sole discretion) or (ii) an
acceleration under Section 8.2 of this Agreement following an Event of Default
beyond any applicable cure periods.  The
Borrower shall repay the Aggregate Revolving Loans in part from time to time in
such principal amounts as may be necessary to ensure that the Aggregate
Revolving Loans at no time exceed the lesser of the Maximum Credit or the
Borrowing Base then in effect.  Notwithstanding
that the definition of "Maximum Revolving Loan Credit" in Section
1.1, nothing contained in this Agreement shall be construed to obligate Lender
to make any Revolving Loan after the Revolving Loan Maturity Date or earlier
termination of this Agreement pursuant to Section 8.2; further, nothing herein
shall be construed to obligate the Lender to make any Revolving Loan in excess
of the Borrowing Base; but in either such case the Lender may choose to do so
and all Revolving Loans shall in any event be secured by the Collateral.

             2.1(b).  Interest Payments under the Revolving Loans.  Borrower shall pay interest on the
outstanding principal amount of the Revolving Loans outstanding from time to
time, from the date of the initial advance under the Revolving Loans until
payment of the Revolving Loans in full, such interest to be payable monthly in
arrears commencing on the first day of the month following the date of the
initial advance under the Revolving Loans by Lender as requested by Borrower
(the “First Payment Date”) and thereafter on the first day of each subsequent
month during the term of the Revolving Loans or, in the event Borrower has
elected and been granted a LIBOR Rate Option, in accordance with Section 2.5(a)
of this Agreement.  Unless the Borrower
has elected and been granted a LIBOR Rate Option with respect to the Loans or
any portion thereof, (in which case interest shall be computed as provided
hereinafter), all Revolving Loans shall bear interest at a fluctuating per
annum rate of interest equal to the Prime Rate plus the Applicable Margin from
the date of the initial advance under the Revolving Loans to the earlier of (i)
the Revolving Loan Maturity Date (unless the same is extended by the Lender in
its sole discretion) or (ii) an acceleration under Section 8.2 of this Agreement
following an Event of Default (such borrowings are herein referred to as “Prime
Rate Loans”).  All computations of
interest shall be made on the basis of a three hundred sixty (360) day year and
the actual number of days elapsed.

             2.1(c).   Principal Repayment under Revolving Loans.    Borrower shall make interest only payments
under the Revolving Loans from the date of initial advance under the Revolving
Loans until the Revolving Loan Maturity Date. 
Overdue principal and interest payments shall be subject to a late
charge of five percent (5%) and shall also bear interest at a per annum rate
equal to the Applicable Rate.  In the
event of repayment of all or a portion of the Revolving Loan or conversion of
the Revolving Loan to a Prime Rate Loan for any reason other than at the end of
any Interest Period, the Borrower shall also pay to the Bank all applicable
LIBOR Breakage Costs and or interest rate hedge agreement breakage costs, if
applicable, associated with the repayment or conversion of the Revolving Loan.

             2.1(d).  Advances under the Revolving Loans.  The availability of funds under the
Revolving Loans shall expire on the Revolving Loan Maturity Date.   Advances under the Revolving Loan shall be
used solely for working capital purposes of the Borrower.  No advances shall be made under the
Revolving Loans after the Revolving Loan Maturity Date except in the sole
discretion of Lender.   The minimum
advance under the Revolving Loans shall be $10,000.00.  Borrower shall notify Lender at least two
(2) Business Days prior to any requested advance.  Lender reserves the right not to fund any advances under the
Revolving Loans in its sole discretion or upon an Event of Default beyond any
applicable cure periods under this Agreement.

2.2        Acquisition Line of Credit.

             2.2
(a).  Acquisition Loans.   Subject to the terms and conditions
hereinafter set forth, Lender will make loans to the Borrower (the
"Acquisition Loans"), in the sole discretion of Lender in each
instance, at the address of Lender set forth above in an aggregate principal
amount not exceeding the Maximum Acquisition Loan Credit prior to the first to
occur of (i) the Acquisition Loan Maturity Date or (ii) the earlier
termination of this Agreement pursuant to Section 8.1 of this Agreement in such
amounts as the Borrower may request. 
The Acquisition Loans shall be evidenced by the Acquisition Note of the
Borrower, dated as of the date hereof and any additional notes executed and
delivered by Borrower to Lender as set forth in Section 2.2 (c) below.  Provided no Events of Default beyond any
applicable cure periods exist under this Agreement or the other Loan Documents,
Borrower may from time to time, borrow, repay and re-borrow principal under the
Acquisition Note so long as the outstanding aggregate principal balance of the
Acquisition Loans does not exceed the Maximum Acquisition Loan Credit. The
Borrower shall repay in full all amounts due under the Acquisition Note upon
the first to occur of (i)  the Acquisition Loan Maturity Date (unless the
same is extended by the Lender in its sole discretion) or (ii) an acceleration
under Section 8.2 of this Agreement following an Event of Default beyond any
applicable cure periods.  Mandatory
repayments of the Acquisition Loan shall also be made in accordance with Section
2.2(c) below.

             2.2(b).  Interest Payments under the Acquisition
Loan.  Borrower shall pay interest
on the outstanding principal amount of the Acquisition Loan outstanding from
time to time, from the date of the initial advance under the Acquisition Loan until
payment of the Acquisition Loan in full, such interest to be payable monthly in
arrears commencing on the First Payment Date and thereafter on the first day of
each subsequent month during the term of the Acquisition Loan or, in the event
Borrower has elected and been granted a LIBOR Rate Option, in accordance with
Section 2.5(a) of this Agreement. 
Unless the Borrower has elected and been granted a LIBOR Rate Option
with respect to the Loans or any portion thereof, (in which case interest shall
be computed as provided hereinafter), all Acquisition Loans shall bear interest
at a fluctuating per annum rate of interest equal to the Prime Rate plus the
Applicable Margin from the date of the initial advance under the Acquisition
Loans to the earlier of (i) the Acquisition Loan Maturity Date (unless the same
is extended by the Lender in its sole discretion) or (ii) an acceleration under
Section 8.2 of this Agreement following an Event of Default.  All computations of interest shall be made
on the basis of a three hundred sixty (360) day year and the actual number of
days elapsed.

             2.2(c).   Principal Repayment under Acquisition
Loans.    Each advance under the
Acquisition Loan shall be due and payable within  nine (9) months after the date of such advance (the “Acquisition
Loan Repayment Period”).  Lender agrees
to provide additional term financing to Borrower for each advance under the
Acquisition Loan.  Borrower and Lender
shall mutually agree upon the terms of such financing including the new
maturity date and the monthly principal amortization schedule prior to the
expiration of the Acquisition Loan Repayment Period.  Borrower shall execute and deliver to Lender a separate
promissory note incorporating the agreed upon terms for such financing for each
advance prior to the expiration of the Acquisition Loan Repayment Period.  In the event that Borrower and Lender fail
to mutually agree upon the terms for such additional financing prior to the
expiration of the Acquisition Loan Repayment Period, Borrower shall make
payment in full of the amount of such advance on or before the expiration of
the Acquisition Loan Repayment Period.  
Overdue principal and interest payments under any of the Acquisition
Notes shall be subject to a late charge of five percent (5%) and shall also
bear interest at a per annum rate equal to the Applicable Rate.  In the event of repayment of all or a
portion of the Acquisition Loan or conversion of the Acquisition Loan to a
Prime Rate loan for any reason other than at the end of any Interest Period,
the Borrower shall also pay to the Bank all applicable LIBOR Breakage Costs and
or interest rate hedge agreement breakage costs, if applicable, associated with
the repayment or conversion of the Acquisition Loan.

             2.2(d).  Advances under the Acquisition Loan.  The availability of funds under the
Acquisition Loan shall expire on the Acquisition Loan Maturity Date.   Advances under the Acquisition Loan shall
be used solely for financing the acquisitions of property, plant or equipment
or any third party business or businesses to be acquired by the Borrower.  All Advances and the amounts of such
Advances under the Acquisition Loan shall be in the sole discretion of
Lender.  Borrower shall provide Lender
with all necessary financial, accounting and other due diligence information
required by Lender prior to any advance for the acquisition of third party
businesses by Borrower.  The minimum
advance under the Acquisition Loan shall be $10,000.00.   No advances shall be made under the
Acquisition Loans after the Acquisition Loan Maturity Date except in the sole
discretion of Lender.   Borrower shall
notify Lender at least ten (10) Business Days prior to any requested
advance.  Lender reserves the right not
to fund any advances under the Acquisition Loan in its sole discretion or upon
an Event of Default beyond any applicable cure periods under this Agreement.

2.3.       Term
Loan.

             2.3(a).   Terms of Term Loan.  Pursuant to this Agreement, Lender agrees to
lend to the Borrower as of the date hereof a term loan in the original
principal amount of $6,500,000.00 (the "Term Loan”) in order to refinance
and term out an existing line of credit between Borrower and  Lender to be evidenced by the Term Note of
the Borrower.

             2.3(b).
 Term Loan Payments.  The Borrower will pay interest on the
outstanding principal amount of the Term Loan from the date hereof until
payment of the Term Loan in full such interest to be payable monthly in arrears
commencing on the first day of the next month following the date of this
Agreement (the “First Term Loan Payment Date”) 
and thereafter on each monthly anniversary of the First Term Loan
Payment Date or, in the event Borrower has elected and been granted a LIBOR
Rate Option, in accordance with Section 2.5(a) of this Agreement until the Term
Loan Maturity Date.  Unless the Borrower
has elected and been granted a LIBOR Rate Option with respect to the Loans or
any portion thereof, (in which case interest shall be computed as provided
hereinafter), the Term Loan shall bear interest at a fluctuating per annum rate
of interest equal to the Prime Rate plus the Applicable Margin from the date of
the initial advance under the Term Loan to the earlier of (i) the Term Loan
Maturity Date or (ii) an acceleration under Section 8.2 of this Agreement following
an Event of Default. Interest shall be calculated on the basis of the number of
actual days elapsed and a 360-day year. 
Commencing on the First Term Loan Payment Date and continuing until the
Term Loan Maturity Date, Borrower shall make fixed principal payments on a
monthly basis in the amount of $108,333.00 based upon a five (5) year straight
line amortization schedule under the Term Note.   Upon the Term Loan Maturity Date, the entire remaining balance
of the Term Loan shall be immediately due and payable.  Overdue principal and interest payments
shall be subject to a late charge of five percent (5%) and shall also bear
interest at a rate equal to four percent (4%) per annum payable on demand above
the then existing interest rate for the Term Note.  In the event of repayment of all or a portion of the Term Loan or
conversion of the Term Loan to a Prime Rate Loan for any reason other than at
the end of any Interest Period, the Borrower shall also pay to the Bank all
applicable LIBOR Breakage Costs and or interest rate hedge agreement breakage
costs, if applicable, associated with the repayment or conversion of the Term
Loan.

             2.4.
      Mortgage Loan.

             2.4(a)
   Terms of Mortgage Loan.  Pursuant to this Agreement, Lender agrees to
lend to Borrower as of the date hereof a commercial mortgage loan in the
original principal amount of $2,500,000.00 (the "Mortgage Loan”) for the
refinancing of the Mortgaged Property to be evidenced by the Mortgage Note of
Borrower.

             2.4(b)   Mortgage Loan Payments.  The Borrower will pay interest on the
outstanding principal amount of the Mortgage Loan from the date hereof until
payment of the Mortgage Loan in full such interest to be payable monthly in
arrears commencing on the first day of the next month following the date of
this Agreement (the “First Mortgage Loan Payment Date”) and thereafter on the
first day of each subsequent month until the Mortgage Loan Maturity Date.  Unless the Borrower has elected and been
granted a LIBOR Rate Option with respect to the Loans or any portion thereof,
(in which case interest shall be computed as provided hereinafter), the
Mortgage Loan shall bear interest at a fluctuating per annum rate of interest
equal to the Prime Rate plus the Applicable Margin from the date of the initial
advance under the Mortgage Loan to the earlier of (i) the Mortgage Loan
Maturity Date or (ii) an acceleration under Section 8.2 of this Agreement
following an Event of Default.  Interest
shall be calculated on the basis of the number of actual days elapsed and a
360-day year.  Commencing on the First
Mortgage Loan Payment Date and continuing until the Mortgage Loan Maturity
Date, Borrower shall make fixed principal payments on a monthly basis in the
amount of $13,889.00 based upon a fifteen (15) year amortization schedule under
the Mortgage Note.   Upon the Mortgage
Loan Maturity Date, the entire remaining balance of the Mortgage Loan shall be
immediately due and payable.  Overdue
principal and interest payments shall be subject to a late charge of five
percent (5%) and shall also bear interest at a rate equal to four percent (4%)
per annum payable on demand above the then existing interest rate for the
Mortgage Note.   In the event of
repayment of all or a portion of the Mortgage Loan or conversion of the
Mortgage Loan to a Prime Rate Loan for any reason other than at the end of any
Interest Period, the Borrower shall also pay to the Bank all applicable LIBOR
Breakage Costs and or interest rate hedge agreement breakage costs, if
applicable, associated with the repayment or conversion of the Mortgage Loan.

             2.5        LIBOR Borrowings under the Loans.

             2.5(a).
  Conversion to LIBOR Rate Loan.   Borrower may, from time to time, elect to
convert the entire balance of any or all of the applicable Loans (provided
Borrower has not chosen a fixed rate of interest under either the Term Loan or
the Mortgage Loan) or any portion thereof in increments of not less than
$250,000.00, to a LIBOR Rate Loan, and Borrower may so convert the applicable
Loans by giving notice of such request or election to the Lender (each a
"LIBOR Conversion Notice"), at least two (2) banking days prior to
the effective date of such election. 
Such election may be for a period of one, two, three, six, nine or
twelve months in each instance. 
Interest on the Loans when they are LIBOR Rate Loans shall be due and
payable on the last day of each applicable Interest Period, or if the
applicable Interest Period is more than ninety (90) days, on each ninetieth
(90th) day during such Interest Period. 
The Borrower may not request that the Loan be a LIBOR Rate Loan after
the occurrence of an Event of Default beyond any applicable cure periods which
has not been waived in writing by Bank.

             2.5(b)
  Conversion to Prime Rate Loans.  In the event that Borrower does not notify
Lender at least two (2) banking days before the end of the applicable Interest
Period of its election hereunder to continue to select the LIBOR Rate Option
with respect to the applicable Loans in accordance with the provisions of this
Agreement, such Loans (or applicable portions thereof) shall be automatically
converted to a Prime Rate Loan at the end of the applicable Interest Period.

             2.5(c)    Suspension of LIBOR Rate Loans.    In the event, that prior to the
commencement of any Interest Period, Lender determines that adequate and
reasonable methods do not exist for the Lender to ascertain the LIBOR Rate that
would determine the rate of interest to be applicable to the Loans during such
Interest Period, Lender shall promptly give notice of such determination to
Borrower.  In such event (a) the pending
LIBOR Conversion Notice shall be automatically withdrawn and shall be deemed a
request for a Prime Rate Loan, (b) the Loans will automatically, on the last
day of the then current Interest Period thereof, become Prime Rate Loans, and
(c) the agreement of the Lender to convert the Loans to LIBOR Rate Loans shall
be suspended until Lender determines that the circumstances giving rise to such
suspension no longer exist.

             2.5(d)   Change in Law.   Notwithstanding any other provisions of
this Agreement, if any present or future law, regulation, treaty or directive,
or the interpretation or application thereof, shall make it unlawful for the
Lender to make or maintain LIBOR Rate Loans, the Lender shall forthwith give
notice of such circumstances to the Borrower and thereupon (a) the commitment
of the Lender to convert the Loan from a Prime Rate Loan to a LIBOR Rate Loan
shall forthwith be suspended, and (b) the Loans shall be converted
automatically to a Prime Rate Loan on the last day of the Interest Period or
within such earlier period as may be required by law.  Borrower hereby agrees promptly to pay to Lender upon demand, any
additional amounts necessary to compensate Lender for any costs incurred by
Lender in making any conversion in accordance with this Section, including any
interest or fees payable by Lender to lenders of funds obtained by Lender in
order to make or maintain a  LIBOR Rate
Loan hereunder.

             2.5(e)    Indemnification. 
Borrower shall indemnify Lender and hold Lender harmless from and
against any loss, cost or expense that Lender may sustain or incur as a
consequence of (A) default by Borrower in payment of the principal amount of or
any interest on a  LIBOR Rate Loan as
and when due and payable, (B) revocation by Borrower in making a conversion to
a LIBOR Rate Loan after Borrower has given a LIBOR Conversion Notice, and (C)
the making by Borrower of any payment of the Loan when it is a LIBOR Rate Loan
or the making of any conversion of any such LIBOR Rate Loan to a Prime Rate
Loan on a day that is not the last day of the applicable Interest Period with
respect thereto.  Such indemnified
losses, costs and expenses shall include without limitation interest or fees
payable by Lender to lenders of funds obtained by Lender in order to maintain
any such LIBOR Rate Loan.

             2.5(f)    Limitation on LIBOR Rate Loans. 
Borrower shall have not more than four (4) LIBOR Rate Loans outstanding
at any time under each of the Revolving Loan and the Acquisition Loan and not
more than two (2) LIBOR Rate Loans outstanding at any time under each of the
Term Loan and the Mortgage Loan.

             2.6.
      Unused Facility Fee.  In addition to any other amounts payable
under this Agreement, the Borrower shall also pay to the Bank on the first day
of each calendar quarter prior to the Revolving Loan Maturity Date and the
Acquisition Loan Maturity Date, an Unused Facility Fee under both the Revolving
Loan and the Acquisition Loan in the amount of one-quarter of one percent
(.25%) per annum of the excess of (i) the Maximum Revolving Loan Credit over
the actual daily average outstanding balance of the Revolving Loan for the
preceding calendar quarter, and (ii) the Maximum Acquisition Loan Credit over
the actual daily average outstanding balance of the Acquisition Loan for the
preceding calendar quarter.

             2.7.
      Letters of Credit.

             2.7(a).
  Availability of Letters of Credit.  Provided no Event of Default or event which,
with the passage of time, may become an Event of Default, exists under this
Agreement or the Loan Documents, the Borrower may also request commercial and
stand-by letters of credit (“Letters of Credit”) under the revolving line of
credit established by Lender in Section 2.1 above, but in no event shall the
sum of the Aggregate Revolving Loans and Letters of Credit exceed the lesser of
the Maximum Revolving Loan Credit or the Borrowing Base.  Each Letter of Credit shall be issuable in
such stated amount as the Borrower shall request on reasonable prior notice, in
favor of such beneficiary to which the Borrower has actual or contingent
obligations incurred in the ordinary course of business.  The Borrower agrees that, in connection with
each Letter of Credit, Borrower shall execute and deliver to Lender the
Lender’s form of Application and Agreement for Irrevocable Letter of Credit
(the “LC Agreement”) which shall define the rights and obligations of Lender
and the Borrower.  The expiration date
and other material terms and provisions of each Letter of Credit shall be subject
to the advance approval of Lender.  The
expiration date of each Letter of Credit shall not be later than the Revolving
Loan Maturity Date.   Borrower shall pay
to Lender at the time of each request for a Letter of Credit (i) an issuance
fee equal to two percent (2%) of the amount of each Letter of Credit, and (ii)
the Lender’s then current application fee. 
Any sum not reimbursed by the Borrower in accordance with the LC
Agreement shall be payable ON DEMAND, shall constitute a “Loan” for purposes of
this Agreement and shall bear interest which shall accrue, be calculated and be
payable (in the absence of demand by Lender) at the Applicable Rate.  All obligations of the Borrower in respect
of Letters of Credit, the LC Agreement and related Loans shall be secured by
and entitled to the benefits of the Loan Documents.

             2.7(b).   Collateral for Letters of Credit.   All obligations of the Borrower under the
Letter of Credit and the LC Agreement shall be secured by and entitled to the
benefits of the Loan Documents.  In the
event that the Aggregate Revolving Loans under the Revolving Note and all other
obligations of Borrower to Lender have been repaid in full but Letters of
Credit are still outstanding, Borrower may obtain the release of the Security
Agreements and the Mortgage provided only that Borrower maintains cash
collateral in an amount and form satisfactory to Lender equal to the amount
then available to be drawn under the Letters of Credit until the expiration of
the outstanding Letters of Credit.

             2.8        Notations
Reflecting Loans.  The Borrower
hereby irrevocably authorizes the Lender to make or cause to be made on the
books of the Lender, at or following the time of making each Loan and of
receiving any payment of principal, an appropriate notation reflecting such
transaction and the then aggregate unpaid principal balance of the Loans.  The amount so noted, and other regular
entries by the Lender on its books with respect to interest and other charges,
shall constitute presumptive evidence as to the amount owed by the Borrower
with respect to principal of the Loans and with respect to interest and other
charges.

             3.          Security
for Loans.

             3.1.       Security.    As security for the Obligations of
Borrower to Lender, the Borrower shall execute and deliver to Lender, among
other things: (i) certain Security Agreements of even date by each Borrower
granting to Lender a first priority security interest in all business assets of
the Borrower including all patents and trademarks (the “Security
Agreements”);  (ii) a certain Mortgage
and Security Agreement of even date covering the Mortgaged Property; and (iii)
a certain Collateral Assignment of Leases and Rents of even date (the “Lease
Assignment”) covering the Mortgaged Property. 
The Notes, this Agreement, the Security Agreements, the Mortgage, the
Lease Assignment and all other documents executed in connection with this
Agreement, shall be collectively referred to herein as the “Loan Documents”.

             4.          Borrowing Base Formula

             4.1        Amounts of Loans under Revolving Note.     No loan shall be made under the Revolving
Note if such loan, together with the Aggregate Revolving Loans,would exceed the Borrowing Base (as
defined in Section 1.1 above) then in effect, as reflected in the Borrowing
Base Certificate (as defined below) most recently provided to the Lender or any
information determined by the Lender in the interim, and if the Aggregate
Revolving Loans at any time should exceed the Borrowing Base, the Borrower will
make such repayment of principal as may be necessary to eliminate the excess.

             5.          Conditions to Loans.

             5.1.       Information to be Provided to Lender.  The funding of the first advance under the
Loans is conditioned upon the Lender’s receipt of: (i) a true and correct copy
of the organizational documents of Borrower, certified by the Secretary of
State for each Borrower’s state of formation ; (ii) a certificate of said
Secretary of State as to the legal existence and good standing of Borrower;
(iii) a certificate of the Clerk/Secretary of the Borrower as to the incumbency
and authority of the persons signing the Loan Documents on behalf of Borrower;
(iv) the duly executed Notes and other Loan Documents; (v) an accounts
receivable aging report and a Borrowing Base Certificate; (vi) a favorable
opinion of counsel to the Borrower as to matters represented and warranted by
the Borrower in Section 6 (other than clauses 
6.1 (f) and (h)) below;  (vii)
the necessary certificates of insurance required by the Security Agreements and
the Mortgage; and (viii) all necessary due diligence requested by Lender as to
all of the properties covered by the Mortgage, including, without limitation, a
lender’s title insurance policy for each of such properties insuring the
aggregate amount of all of the Notes.

             5.2.       Additional Conditions to Loans by Lender.    The making of any loan under this Agreement
is conditioned upon the following: (i) the Borrower’s representations and
warranties herein shall be true and correct as of the date of such loan; (ii)
there shall exist no Event of Default nor any event which, with notice or lapse
of time or both, would become such an Event of Default; (iii) there shall have
occurred no material adverse change in the financial condition, business or
prospects of the Borrower; and (iv) if it shall have so requested, the Lender
shall have received a certificate signed by the Borrower as to the
foregoing.  Its acceptance of any loan
shall constitute the Borrower’s representation and warranty to the effect set
forth in clauses (i), (ii) and (iii) above.

             5.3        Additional Information to be Provided to Lender with
Respect to Mortgaged Property.

                           a.
         Title Insurance.  Borrower shall have delivered to the Lender
a full coverage ALTA form of title insurance policy in an amount not less than
the lesser of the full amount of the Loans or the fair market value of the Mortgaged
Property, in the aggregate (or, in lieu of a policy, a title commitment
containing the title company’s agreement to issue such a policy) insuring that
the Mortgage is a valid lien on the Mortgaged Property unencumbered fee simple
estate of good and marketable title in the Mortgaged Property, subject only to
such exceptions as shall be approved by the Lender’s counsel.  The title insurance policy and issuer shall
be subject to the approval of the Lender and shall contain only such title
exceptions as shall be approved by the Lender’s counsel and the Lender shall be
provided with such endorsements or other agreements of supplemental insurance
as Lender shall require at the time of the Loan including a revolving line of
credit endorsement.  The cost of such
endorsements and any additional fees incurred by Lender for Lender’s counsel
shall be paid by Borrower.

                           b.          Survey.  Borrower shall deliver a current survey (or
plot plan if sufficient to delete the survey exception in the lender’s title
policy) which describes the outline of the Mortgaged Property and shows the
location of all easements, encroachments and rights of way existing and
foundations, if any, constructed on the Mortgaged Property, and any intended
Improvements (the “Survey”).  The Survey
shall contain a certification by the surveyor as to whether the Mortgaged
Property is in a designated flood hazard area. 
If the Survey discloses that the Mortgaged Property is in a flood hazard
area, Borrower shall be required to purchase flood insurance in the amount of
the Loan or the maximum amount available, whichever is less, which insurance
shall name the Lender as first mortgagee and loss payee.

                           c.          Opinions.  The Lender shall be in receipt of such
opinions of counsel as the Lender shall reasonably request, which shall be in
form and content reasonably satisfactory to the Lender and its counsel, dated
as of the date hereof, including, without limitation, opinions regarding (i)
the legal existence of the Borrower, the authority of the Borrower to execute
all documents as to which each is a party the enforceability of all documents
and the existence of any pending or threatened litigation against the Borrower
and (ii) that all real and personal property, constituting collateral for the
Loan, and the use thereof, will comply with all applicable governmental laws
and regulations, including, without limitation, laws and regulations relating
to usury, tidelands, wetlands, zoning, subdivision, building, and other
federal, state, country, and municipal laws, rules, regulations, and judicial
and administrative decisions applicable to the Mortgaged Property.

                           d.          Miscellaneous Documents.  The Lender shall be in receipt of:  (i) copies of all agreements which affect
the Mortgaged Property including, but not limited to, agreements for the
development, management, service, supply or operation of the Mortgaged Property
and (ii) an independent appraisal of the Mortgaged Property, by an appraiser
satisfactory to the Lender showing an aggregate appraised value satisfactory to
Lender.

                           e.          Permits and Approvals.  The Lender shall have (i) received a copy of
all variances, licenses, special permits, and any other permits and approvals
required for the Mortgaged Property (collectively, the “Approvals”) including,
without limitation, septic system approvals and building permits, and (ii)
Borrower shall have satisfied all of the terms and conditions of the
Approvals.  Further, Borrower shall have
provided the Lender with evidence that all gas, sewer, water, electrical,
telephone and any other utility services are available at the Mortgaged
Property in adequate supply.

                           f.
          Environmental Reports.  The Lender shall have received a certified
subsoil and structural investigation report and analysis, satisfactory to the
Lender, certifying to the absence of oil and hazardous materials on or
affecting the Mortgaged Property.

5.4.       Commitment
Fee.  Waived by Lender.

 

6.          Representations and Warranties.

6.1.       The
Borrower represents and warrants to the Lender that:  (a) UFP is a duly organized, validly existing corporation in good
standing under the laws of the State of Delaware and is duly qualified to do
business as a foreign corporation and in good standing under the laws of each
other jurisdiction in which its business conducted or properties owned requires
such qualification; (b) MFT is a duly organized, validly existing corporation
in good standing under the laws of the State of Maine and is duly qualified to
do business as a foreign corporation and in good standing under the laws of each
other jurisdiction in which its business conducted or properties owned requires
such qualification; (c)  Borrower has
full power to enter into and perform this Agreement, the Notes and other Loan
Documents and has taken all necessary corporate, partnership and other action
to authorize the execution, delivery and performance of this Agreement, the
Notes and the other Loan Documents; (d) this Agreement, the Notes and the Loan
Documents constitute the legal, valid and binding obligations of the Borrower, enforceable
in accordance with their respective terms; (e) the execution, delivery and
performance of this Agreement, the Notes and the Loan Documents will not
violate any provision of any existing law or regulation applicable to Borrower
or of its operating agreement or other governing documents or of any order or
decree of any court, arbitrator or governmental authority or of any contractual
undertaking to which it is a party or by which it may be bound; (f) no
consents, licenses, approvals or authorizations of, exemptions by or
registrations or declarations with, any governmental authority are required
with respect to this Agreement, the Notes or the Loan Documents; (g) the
Borrower has filed all Federal income and other material tax returns required
to be filed by it and has paid all taxes due under this Agreement or under any
assessment received by it, other than those being contested in good faith by
appropriate proceedings and where appropriate reserves have been established;
(h) there is no action, suit or proceeding pending against, or to the
Borrower’s knowledge threatened against or affecting Borrower before any court,
arbitrator or governmental authority in which there is a reasonable possibility
of an adverse decision which could affect materially the business or financial
condition of the Borrower or any of their ability to enter into and perform its
obligations under this Agreement, the Notes or the Loan Documents; and (i) the
Borrower’s balance sheet, if available, as of its last fiscal year end and the
related statements of operations for the fiscal period then ended, copies of
which have been provided to the Lender, fairly present the financial condition
and results of operations of the Borrower as of such date and for such period,
and there has occurred no Material Adverse Change since such date.

7.          Covenants of Borrower.

7.1.       The
Borrower covenants and agrees with the Lender as follows:

             a.          Loan Payments; Loan Proceeds.  Borrower shall pay all amounts due under the
Notes at the times and places and in the manner provided by the Notes and
promptly pay when due all other amounts owing to Lender with respect to fees
and otherwise as required by the Loan Documents.

             b.
         Financial Reporting by
Borrower.  Borrower shall furnish to
the Lender, from time to time promptly upon request, such information as to the
financial condition of the Borrower on a combined and consolidated basis, as
the Lender may reasonably request, including, without limitation, the
following:

                           (i)          within
45 days after the end of each of the first three (3) fiscal quarters of every
fiscal year of Borrower, management prepared financial statements of Borrower
and covenant compliance certificates;

                           (ii)
        within 21 days after the end of
each month, an updated accounts receivable aging report, inventory summary and
a borrowing base certificate each in form and substance satisfactory to the
Lender;

                           (iii)
       within 90 days after the end of
each fiscal year, financial statements for Borrower audited by an accounting
firm acceptable to Lender in its reasonable discretion;

                           (iv)
      within 90 days after the end of each
fiscal year of Borrower, Borrower prepared annual projections;

                           (v)
       within 90 days after the end of
each fiscal year of Borrower, a Borrower prepared annual summary of Borrower’s
Divisional performance; and

                           (vi)       in the event of any third party business
acquisition, such financial information as required by Lender to determine
pro-forma compliance with all covenants and conditions of this Agreement prior
to any funding under the Acquisition Loan for such acquisition.

             c.          Licenses etc.  Borrower shall preserve its existence as a
corporation and all licenses and franchises necessary or convenient for its
business; comply with all applicable laws and regulations; maintain all material
property necessary or useful in its business in good working order and repair;
pay when due all taxes and all lawful claims which otherwise might result in
liens on its property; and comply with all funding and other material
requirements under the Employee Retirement Income Security Act of 1976, as
amended.

             d.          Merger; Ownership.   Borrower shall not merge or consolidate
with any Person or sell any material assets except in the ordinary course of
business.  There shall be no Change of
Control with respect to the Borrower.

             e.          Indebtedness; Subordination
of Insider Debt.  Borrower shall not
incur or become liable for any Indebtedness for borrowed money (including under
capitalized leases) except Indebtedness (i) to the Lender, (ii) consented to in
writing by the Lender in advance or (iii) secured by liens permitted under
Section 7.1.f. below.  Borrower shall
obtain from any shareholders, principals, partners or members, as applicable,
the subordination of any outstanding indebtedness owed by Borrower to such
party to the Loans and the subordination of any other indebtedness to third
party creditors.

             f.           Liens. Borrower shall not
create, permit to be created or suffer to exist any security interest,
mortgage, lien or other encumbrance upon any material asset or property of the
Borrower, except (i) warehousemen’s, mechanics’, carriers’ and other similar
liens arising by operation of law in the ordinary course of the Borrower’s
business, (ii) liens in favor of the Lender and (iii) purchase money security interests
in tangible personal property purchased or leased, where the security interest
covers only such property and secures only the cost thereof.

             g.          Loans.  Borrower shall not make any loans or
advances to (or guaranty or become contingently liable for obligations of) any
person, except (i) endorsement of negotiable instruments for deposit or
collection in the ordinary course of business, (ii) customary advances for
reimbursable employee business expenses in the ordinary course of business,
(iii) loans to officers and directors to finance the purchase of common stock
of the Borrower or (iv) other loans to employees and stockholders not in excess
of $50,000.00 in the aggregate.

             h.          Investments. Borrower shall not
make any investments in securities or obligations of another person except
deposits with the Lender, U.S. Treasury securities or money market mutual funds
of nationally-recognized sponsors.

             i.           Event of Default. Borrower
shall immediately notify the Lender of the occurrence of any Event of Default
or any event which, with notice or lapse of time or both, would become such an
event.

             j.           Taxes. 
Borrower will pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it, or upon its income or profits, or upon any
properties belonging to it, prior to the date on which penalties or interest
would attach thereto, and all lawful claims which, if unpaid, might become a
Lien upon any property of the Borrower; provided that neither the
Borrower shall be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings which
serve as a matter of law to stay the enforcement of any remedy of the taxing
authority or claimant and as to which the Borrower shall have set aside on its
books adequate reserves.

             k.          Insurance.  Borrower shall maintain insurance with
responsible and reputable insurance companies or associations satisfactory to
Lender in such amounts and covering such risks as shall be satisfactory to
Lender from time to time, but in any event in amounts sufficient to prevent the
Borrower from becoming a co-insurer. 
The Borrower shall keep all inventory, equipment, furnishings and other
tangible personal property owned by the Borrower and kept or used therein fully
insured against fire, lightning and extended coverage perils and against such
other risks as the Lender may from time to time require, in an amount equal to
the aggregate full insurable value thereof. 
Borrower shall in addition ensure compliance with the requirements of
the Security Agreements and the Mortgage with respect to insurance.

             l.           Restricted Payments.  Borrower will not make: (i) any payment of
cash dividends or distributions with respect to its outstanding capital stock
during the term of the Loans if Borrower is not in compliance with all of the
covenants set forth in this Agreement, an Event of Default has occurred and is
continuing or such payments or distributions would cause the Borrower to not
comply with the covenants set forth in this Agreement ; (ii) any payment on
account of the purchase, redemption, retirement or acquisition of (a) any stock
interests; or (b) any rights to acquire stock interests in Borrower; or (iii)
any payment, loan, advance or other direct or indirect provision of funds or
credit by the Borrower to any member (other than salary payments and
reimbursement of usual and customary expenses in each case in the ordinary
course of business consistent with past practice).

             m.
        Debt Service Coverage Ratio.  The Borrower shall not permit its Debt
Service Coverage Ratio to be less than 1.15 to 1.0 at any time during
Borrower’s fiscal year 2001 and to be less than 1.25 to 1.0 commencing January
1, 2002 and continuing throughout the term of the Loans thereafter to be tested
quarterly on a rolling four-quarters basis pursuant to Borrower’s financial
statements.

             n.
         Maximum Senior Funded Debt/
EBITDA.  Borrower shall not permit
the ratio of its Senior Funded Debt to EBITDA. to be more 3.50 to 1.0 to be
tested on a quarterly basis, pursuant to Borrower’s financial statements.

             o.          Maximum Total Funded Debt/ EBITDA.  Borrower shall not permit the ratio of its
Total Funded Debt to EBITDA. to be more 4.50 to 1.0 to be tested on a quarterly
basis, pursuant to Borrower’s financial statements.

             p.
         Field Examinations.  At all times that any of the Loans are
outstanding, the Lender shall be entitled to conduct field audits at any time
within the Lender’s discretion upon reasonable prior notice to Borrower at
Borrower’s sole cost provided that, so long as no Event of Default has occurred
and is continuing, such audits shall occur no more frequently than
semi-annually.

             q.          Primary Banking Relationship.   At all times that any of the Loans are
outstanding, Borrower shall maintain its primary banking accounts and
relationships with Lender.

             r.           Other Information. Borrower
shall provide the Lender with such other information as the Lender may from
time to time reasonably request.

8.          Events of Default; Remedies.

8.1.       Events of Default.   The occurrence of any of the following
events shall constitute an “Event of Default” under this Agreement provided
such occurrence exceeds any applicable notice or cure periods:

             a.          The
Borrower shall fail to make any payment of principal or interest on the Notes
or any other payment obligation in respect of this Agreement within fifteen
(15) days after the date when due; or

             b.          Any material representation or
warranty of the Borrower contained herein or in any of the other Loan Documents
shall at any time prove to have been incorrect in any material respect when
made or any representation or warranty made by the Borrower in connection with
the execution and delivery of this Agreement or any other instrument, document,
certificate or statement executed and delivered in connection with any Loan
shall at any time prove to have been incorrect in any material respect when
made; or

             c.          The Borrower shall default in the
performance of any term, covenant or agreement contained in this Agreement
(other than as described in Section 8.1.a. above) and such default shall
continue unremedied for thirty (30) days after written notice thereof shall
have been given to the Borrower or such additional time as necessary to cure
such breach or default provided Borrower has diligently commenced to cure the
same and provided that such time period to cure shall not exceed sixty (60)
days.  The grace period set forth in
this Section 8.1(c) shall not apply to the other Events of Default set forth in
this Section 8.1; or

             d.          Any default on the part of the
Borrower shall exist, and shall remain unwaived or uncured beyond the
expiration of any applicable notice and/or grace period, under the Loan
Documents or any other contract, agreement or understanding now existing or
hereafter entered into with or for the benefit of  Lender in any capacity or capacities; or

             e.          Any default shall exist and remain
unwaived or uncured with respect to any Indebtedness for borrowed money of the
Borrower in excess of $50,000.00, or any such Indebtedness shall not have been
paid when due, whether by acceleration or otherwise, or shall have been
declared to be due and payable prior to its stated maturity, or any event or
circumstance shall occur which permits, or with the lapse of time or giving of
notice or both would permit, the acceleration of the maturity of any such
Indebtedness by the holder or holders thereof; or

             f.           The Borrower shall be dissolved, shall become insolvent or
bankrupt or shall cease paying its debts as they mature or shall make an
assignment for the benefit of creditors; or a trustee, receiver or liquidator
shall be appointed for the Borrower or for a substantial part of the property
of Borrower; or bankruptcy, reorganization, arrangement, insolvency or similar
proceedings shall be instituted by or against the Borrower under the laws of
any jurisdiction (provided that, if involuntary, such proceedings shall
not be an Event of Default unless they are not stayed or dismissed within sixty
(60) days); or

             g.          Any execution or similar process
claiming an amount in excess of $50,000.00 shall be issued or levied against
the Borrower or any of its property and such writ, attachment, execution or
similar process shall not be paid, released, vacated or fully bonded within
twenty (20) days after its issue or levy; or any writ of attachment or trustee
process shall be served upon the Lender relating to goods, effects or credits
of the Borrower in the possession of or maintained with the Lender; or

             h.          The Borrower shall fail to meet its
minimum funding requirements under ERISA with respect to any employee benefit
plan (or other class of benefit which the PBGC has elected to insure) or any
such plan shall be the subject of termination proceedings (whether voluntary or
involuntary) and there shall result from such termination proceedings a
liability of the Borrower to the PBGC which in the reasonable opinion of the
Lender may have a material adverse effect upon the business, operations or
financial condition of the Borrower; or

             i.           The Borrower shall suffer any
Material Adverse Change or shall suffer substantial loss, theft, taking, damage
or destruction to or of any of its property, not covered by insurance, which
would have a material adverse effect upon the business, prospects, operations
or financial condition of the Borrower; or

             j.           There shall be entered against the
Borrower any final judgment not covered by insurance in excess of $50,000.00
which, singly or with any other final judgment or judgments against the
Borrower not covered by insurance and which would have a Material Adverse
Change upon the business, prospects, operations or financial condition of the
Borrower; or

             k.          The Borrower shall become liable under
federal or state law for environmental remediation or other measures, the cost
of compliance with which is not covered by insurance and would have a material
adverse effect upon the business, prospects, operations or financial condition
of the Borrower; or

             l.           Entry of any court order against the
Borrower which enjoins, restrains or in any way prevents the Borrower from
conducting all or any part of its business activities or materially interferes
with the ownership, use or occupation of any if its assets which court order is
not rescinded or dismissed within twenty (20) days of its issuance;

             m.         The Borrower shall cease to be managed
by its present management or other senior management reasonably satisfactory to
the Lender or there is a Change in Control.

             For
purposes of clauses (i), (j) and (k) above, a loss or liability shall not be
deemed to be "not covered by insurance," notwithstanding that the
insurer has not paid the claim, if a claim has been submitted in writing and
the Borrower reasonably believes that it is covered by the relevant insurance, provided
that any claim not paid or agreed to be covered by the insurer within sixty
(60) days after it is submitted shall be deemed to be not covered by insurance.

8.2.       Rights and Remedies on
Default.  Upon the occurrence of any
Event of Default beyond any applicable notice or cure periods and at any time
thereafter, in addition to any other rights and remedies available to the
Lender under this Agreement or otherwise, the Lender may exercise any one or
more of the following rights and remedies (all of which shall be cumulative):

             a.          Declare the entire unpaid principal
amount of the Notes and the Obligations then outstanding, all interest accrued
and unpaid thereon and all other amounts payable under this Agreement, and all
other Indebtedness of the Borrower to the Lender, to be forthwith due and
payable, whereupon the same shall become forthwith due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by the Borrower.

             b.          Terminate either or both of the
revolving line of credit provided for in Section 2.1 and the acquisition line
of credit provided for in Section 2.2 without notice. If any of the Loans are
LIBOR Rate Loans, Bank may immediately terminate the LIBOR Rate Loan and
Borrower shall be liable for all LIBOR Breakage Costs resulting from such termination.

             c.
         Not permit any additional Letters
of Credit under this Agreement and require Borrower to deliver to Lender cash
collateral in an amount equal to the aggregate amounts then undrawn on all
Letters of Credit or outstanding on acceptances (if any) issued by Lender
for  Borrower's account

             d.          Enforce the provisions of this
Agreement or the other Loan Documents by legal proceedings for the specific
performance of any covenant or agreement contained herein or therein or for the
enforcement of any other appropriate legal or equitable remedy, and the Lender
may recover damages caused by any breach by the Borrower of the provisions of
this Agreement or the other Loan Documents, including court costs, reasonable
attorneys' fees and other costs and expenses incurred in the enforcement of the
obligations of the Borrower under this Agreement.

             e.          Exercise all rights and remedies under
this Agreement and/or under the Notes, the Loan Documents and any other
agreement with the Lender; and exercise all other rights and remedies which the
Lender may have under applicable law.

8.3.         Set-off.   In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, the Lender is
hereby authorized at any time or from time to time, without presentment,
demand, protest or other notice of any kind to the Borrower, all of which are
hereby expressly waived, to set off and to appropriate and apply any and all
deposits (general or special) and any other Indebtedness at any time held or
owing by the Lender to or for the credit or the account of the Borrower against
and on account of the obligations and liabilities of the Borrower to the Lender
under this Agreement or otherwise, irrespective of whether or not the Lender
shall have made any demand under this Agreement and although said obligations,
liabilities or claims, or any of them, may then be contingent or unmatured and
without regard for the availability or adequacy of other collateral.  The Borrower also grants to the Lender a
security interest with respect to all its deposits and all securities or other
property in the possession of the Lender from time to time, and, upon the
occurrence of any Event of Default or event which, with giving of notice or
lapse of time or both, could become an Event of Default, the Lender may
exercise all rights and remedies of a secured party under the Uniform
Commercial Code with respect thereto.

9.          Assignment.

             This
Agreement shall inure to the benefit of and be binding upon the parties’ respective
successors and assigns, provided that the Borrower may not assign any
rights or obligations under this Agreement without the prior written consent of
the Lender.  It is agreed that the
Lender may grant to other financial institutions participations in loans under
this Agreement.

10.        Interpretation,
Etc.

             This
Agreement, the Notes and the other Loan Documents constitute the entire
agreement of the parties with respect to the subject matter hereof and
supersede any prior correspondence or agreements relating thereto.  The headings herein are for convenience of
reference only and shall not affect the interpretation hereof.  No provision of this Agreement, the Notes or
the other Loan Documents may be amended or waived except by a written
instrument signed by the party or parties to be charged.  No failure or delay by the Lender in
exercising any right, power or privilege under this Agreement or under this
Agreement shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other right, power or privilege.  The rights and remedies herein and therein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.  If any provision
hereof or thereof is prohibited or unenforceable in any jurisdiction, the same
shall not affect the remaining provisions hereof and thereof nor affect the
validity or enforceability of such provision in any other jurisdiction.  This Agreement shall remain in effect as
long as there remains outstanding any sum under any of the Notes or prior to
demand for repayment by Lender or the maturity dates contained herein.  This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts and
shall take effect as a sealed instrument. Borrower irrevocably submits to the
jurisdiction of any Massachusetts court or any federal court sitting within the
Commonwealth of Massachusetts over any suit, action or proceeding arising out
of or relating to this Agreement. 
Borrower irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of venue of any such
suit, action or proceeding brought in such a court and any claim that any such
suit, action or proceeding has been brought in an inconvenient forum

11.        Waiver Of Jury Trial.

             THE
LENDER AND THE BORROWER AGREE THAT NEITHER OF THEM NOR ANY ASSIGNEE OR
SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM
OR ANY OTHER ACTION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT, ANY RELATED
INSTRUMENTS, ANY COLLATERAL OR THE DEALINGS OR THE RELATIONSHIP BETWEEN THEM,
OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. 
THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE LENDER
AND THE BORROWER AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.  NEITHER THE LENDER NOR THE BORROWER HAS
AGREED WITH OR REPRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS PARAGRAPH
WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

12.        Notices.

             Any
notice, request, demand or other communication required or permitted under this
Agreement shall be given in writing by delivering the same in person to the
intended addressee, by overnight courier service with guaranteed next day
delivery or by certified United States Mail, postage prepaid sent to the
intended addressee at the applicable address set forth on Page 1 hereof or to
such different address as either Borrower or Lender shall have designated by
written notice to the other sent in accordance herewith.  Copies of all notices to Lender shall also
be sent to Brian F. Plunkett, Esquire, Bartlett Hackett Feinberg, Ten High
Street,  Boston, MA  02110 and copies of all notices to Borrower
shall also be sent to Patrick J. Kinney, Jr., Esq., Lynch, Brewer, Hoffman
& Sands, P.C., 101 Federal Street, Boston, MA 02110.   Such notices shall be deemed given when
received or, if earlier, in the case of delivery by courier service with guaranteed
next day delivery, the next day or the day designated for delivery, or in the
case of delivery by certified United States Mail, two days after deposit
therein.

13.        Costs
and Expenses.

             Borrower
agrees to pay on demand all reasonable and customary costs and expenses
(including without limitation, reasonable legal fees) of Lender in connection
with the preparation, execution and delivery of this Agreement, the Notes and
the Loan Documents and any amendments or modifications of any of the foregoing,
or in connection with the examination, review or administration of any of the
foregoing, as well as the costs and expenses (including, without limitation,
the reasonable fees and out-of-pocket expenses of legal counsel and independent
public accountants) incurred by Lender in connection with interpreting,
administering, preserving, enforcing or exercising any rights or remedies under
this Agreement, the Notes and the Loan Documents, all whether or not legal
action is instituted.

 

[THIS SPACE
INTENTIONALLY LEFT BLANK]

EXECUTED under seal as of the date first
above written.

	 	 	LENDER:	 
	 	 	 	 	 
	 	 	CITIZENS
  BANK OF MASSACHUSETTS	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:
  	 	 
	

	 	 	

	 
	Witness	 	 	Bradford
  J. Buckley, Vice President	 
	 	 	 	 	 
	 	 	BORROWER:	 
	 	 	 	 	 
	 	 	UFP
  TECHNOLOGIES., INC.	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:
  	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Vice President,  Chief
  Financial Officer and Treasurer	 
	 	 	 	 	 
	 	 	MOULDED
  FIBRE TECHNOLOGY, INC.	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:
  	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Treasurer	 
	 	 	 	 	 
	 	 	SIMCO
  INDUSTRIES, INC.	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:
  	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Treasurer	 
	 	 	 	 	 
	 	 	SIMCO
  AUTOMOTIVE TRIM, INC.	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:
  	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Treasurer	 

 

Exhibit 10:45

ACQUISITION LINE OF
CREDIT PROMISSORY NOTE

1.          DEFINED TERMS.  As used in this Acquisition Line of Credit Note (the
"Note"), the following terms shall have the following meanings:

	1.1	Borrower:	UFP
  Technologies, Inc.
	 	 	a Delaware
  corporation,
	 	 	172 East Main
  Street
	 	 	Georgetown,
  MA 01833
	 	 	 
	 	 	Moulded Fibre
  Technology, Inc.
	 	 	a Maine
  corporation
	 	 	301 U.S.
  Route 1
	 	 	Scarborough,
  ME 04074
	 	 	 
	 	 	Simco
  Industries, Inc.
	 	 	a Michigan
  corporation
	 	 	51362
  Quadrate Drive
	 	 	Macomb
  Township, Michigan 48042
	 	 	 
	 	 	Simco
  Automotive Trim, Inc.
	 	 	a Michigan
  corporation
	 	 	51362
  Quadrate Drive
	 	 	Macomb Township,
  Michigan 48042
	 	 	 
	1.2	Lender:	Citizens Bank
  of Massachusetts
	 	 	28 State
  Street
	 	 	Boston, MA
  02109
	 	 	 
	1.3	Loan Amount:	Not to exceed
  $4,000,000.00
	 	 	 
	1.4	Interest Rate:	See Section 3
  below.
	 	 	 
	1.5	Maturity Date:	April 30,
  2003

             1.6        Loan
Agreement:        a certain
Revolving Line of Credit, Acquisition Line of Credit, Term Loan and Mortgage
Loan Agreement of even date herewith by and between Borrower and Lender.

             1.7        Security
Agreements:             certain
Security Agreements of even date herewith from each Borrower to Lender covering
all of the business assets of each Borrower as more particularly set forth
therein.

             1.8        Mortgage:        a
certain Mortgage and Security Agreement of even date from UFP Technologies,
Inc. to Lender covering property located at 172 East Main Street, Georgetown,
MA as more particularly described in the Mortgage.

             1.9        Loan,
Loan Documents and Event of Default shall have the same meanings as
in the Loan Agreement.  The Loan
Documents are incorporated herein by reference.  All capitalized terms used herein and not otherwise defined
herein shall have the meanings as set forth in the Loan Agreement.

1.10      Prepayment Period:    In accordance with Section
9 herein.

2.          DEBT: For value received, Borrower hereby
promises to pay to the order of Lender the Loan Amount, or so much as has been
advanced by Lender from time to time pursuant to the Loan Agreement, together
with interest on all unpaid balances from the date of such advances made under
this Note at the interest rate set forth in this Note, together with all other
amounts due hereunder or under the Loan Documents.  The Loan Amount is a revolving line of credit loan, such that,
prior to demand and provided no Events of Default exist under the Note or other
Loan Documents, Borrower may from time to time, borrow and re-borrow principal
under the Note so long as the outstanding Aggregate Revolving Loans do not
exceed the Loan Amount.

3.          INTEREST: Unless the Borrower has elected
and been granted a LIBOR Rate Option (as defined in the Loan Agreement) with
respect to this Loan (in which case interest shall be computed as provided in
the Loan Agreement), the Loan Amount shall accrue interest at a fluctuating per
annum rate of interest equal to the Prime Rate (as defined in the Loan
Agreement) plus the Applicable Margin (as defined and determined in the Loan
Agreement).  Interest shall be
calculated on the basis of the number of actual days elapsed and a 360-day
year.

4.          PAYMENTS: Borrower shall make payments of
interest only on the amounts advanced by Lender under this Note monthly in
arrears while any part of the indebtedness evidenced hereby is unpaid
commencing on the first day of the month following the date of the initial
advance under this Note (the “First Payment Date”) and thereafter on each monthly
anniversary of the First Payment Date or, in the event Borrower has elected and
been granted a LIBOR Rate Option, in accordance with Section 2.5(a) of the Loan
Agreement.

             Borrower
shall repay in full each advance under this Note within nine (9) months of the
date of such advance by Lender to Borrower under this Note.   Such repayment may occur through additional
term financing by Lender to Borrower for each advance under this Note as set
forth in the Loan Agreement.  On the
Maturity Date or on such earlier date as may be required under the terms of
this Note or any of the Loan Documents, Borrower shall pay to Lender the entire
then unpaid balance of principal and interest under this Note.

             Any
payments on this Note, whether such payment is of a regular installment or
represents a prepayment (if permitted hereunder), shall be made in coin and
currency of the United States of America which is legal tender for the payment
of public and private debts, in immediately available funds, to Lender at
Lender's address set forth or at such other address as Lender may from time to
time designate in writing.

5.          DEFAULT INTEREST: If any payment due hereunder or under any of
the Loan Documents is not paid within fifteen (15) days when due, either at
stated or accelerated maturity or pursuant to any of the terms hereof, then and
in such event, Borrower shall, in addition to any other payment due hereunder,
pay interest thereon from and after the date on which such payment first
becomes due at an annual interest rate equal to the Interest Rate plus four
percent (4.0%) and such interest shall be due and payable, on demand, at such
rate until the entire amount due is paid to Lender, whether or not any action
shall have been taken or proceeding commenced to recover the same or to
foreclose the Mortgage.  Nothing in this
Section 5 or in any other provision of this Note shall constitute an extension
of the time of payment of the indebtedness hereunder.

6.          DELINQUENCY CHARGES: 
If a regularly scheduled payment is more than fifteen (15)
days late, Borrower will be charged five percent (5%) of the unpaid portion of
the regularly scheduled payment.  The
amount thereof shall be secured by the Loan Documents and by any other
Collateral held by Lender to secure such indebtedness.  Borrower agrees that any such delinquency
charges shall not be deemed to be additional interest or penalty, but shall be
deemed to be liquidated damages because of the difficulty in computing the
actual amount of damages in advance.

7.          COSTS AND EXPENSES UPON DEFAULT: After
default, in addition to principal, interest and delinquency charges, Lender
shall be entitled to collect all costs of collection, including, but not
limited to, reasonable attorneys, fees and expenses, incurred in connection
with the protection or realization of collateral or in connection with any of
Lender's collection efforts, whether or not suit on this Note is filed, and all
such costs and expenses shall be payable on demand and until paid shall also be
secured by the Security Agreements and the other Loan Documents and by all
other Collateral held by Lender as security for Borrower's obligations to
Lender.

8.          APPLICATION OF PAYMENTS: Unless an Event of
Default has occurred, all payments hereunder shall be applied first to
delinquency charges, costs of collection and enforcement and other similar
amounts due, if any, under this Note and under the other Loan Documents, then
to interest which is due and payable under this Note and the remainder, if any,
to principal due and payable under this Note. 
If an Event of Default has occurred, such payments may be applied to
sums due under this Note or under the other Loan Documents in any order and
combination that Lender may, in its sole and absolute discretion, determine.

9.          PERMITTED PREPAYMENT:    Borrower shall have the right to prepay this Note in
whole or in part at anytime without payment of premium or penalty for Prime
Rate Loans.  In the event of repayment
of all or a portion of the Loan or conversion of the Loan from a LIBOR Rate
Loan to a Prime Rate Loan for any reason other than the expiration of an
Interest Period, the Borrower shall also pay to the Bank all applicable LIBOR
Breakage Costs (as defined in the Loan Agreement) and or interest rate hedge
agreement breakage costs, if applicable, associated with the repayment or
conversion of the Loan in accordance with the Loan Agreement.

10.        COSTS; ILLEGALITY OF LOAN: In addition to principal, interest
and delinquency charges, Borrower shall pay all reasonable costs and expenses,
including, without limitation, reasonable attorneys’ fees and all reasonable
expenses and disbursements of counsel, in connection with the protection,
realization or enforcement of any of Lender's rights against Borrower and
against any collateral given Lender to secure this Note or any other
liabilities of Borrower to Lender (whether or not suit or foreclosure is
instituted by or against Lender).

11.        WAIVERS: BORROWER SEVERALLY AND IRREVOCABLY
WAIVES ITS RIGHTS TO NOTICE AND HEARING TO THE EXTENT PERMITTED BY LAW OF ANY
STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH LENDER MAY
DESIRE TO USE, and, further, severally and irrevocably waive presentment for
payment, demand, notice of nonpayment, notice of intention to accelerate the
maturity of this Note, diligence in collection, commencement of suit against
any obligor, notice of protest, and protest of this Note and all other notices
in connection with the delivery, acceptance, performance, default or
enforcement of the payment of this Note, before or after the maturity of this
Note, with or without notice to Borrower, and agree that Borrower’s liability
shall not be in any manner affected by any indulgence, extension of time,
renewal, waiver or modification granted or consented to by Lender.  Borrower consents to any and all extensions
of time, renewals, waivers or modifications that may be granted by Lender with
respect to the payment or other provisions of this Note, and to any
substitution, exchange or release of the collateral for this Note, or any part thereof,
with or without substitution of said collateral.  Any delay on the part of Lender in exercising any right under
this Note shall not operate as a waiver of any such right, and any waiver
granted or consented to on one occasion shall not operate as a waiver in the
event of any subsequent default.

12.        NO USURY: Borrower shall not be obligated
to pay and Lender shall not collect interest at a rate higher than the maximum
permitted by law or the maximum that will notsubject the Lender to any civil or criminal penalties.  If, because of the acceleration of maturity
the payment of interest in advance or any other reason, Borrower is required,
under the provisions of any of the Loan Documents or to otherwise, to pay interest
at a rate in excess of such maximum rate, the rate of interest under such
provisions shall immediately and automatically be reduced to such maximum rate,
together with interest thereon at the rate provided herein from the date of
such payment, shall be immediately and automatically applied to the reduction
of the unpaid principal balance of Loans as of the date on which such excess
payment was made.   If the amount to be
so applied to reduction of the unpaid principal balance exceeds the unpaid principal
balance, the amount of such excess shall be refunded by Lender to Borrower.

13.        ACCELERATION AND OTHER REMEDIES: If:

             (a)         Borrower fails to pay any sum within
fifteen (15) days of when due under this Note; or

             (b)         an "Event of Default", as
said term is defined in the Loan Agreement or any other Loan Document, occurs;

then, and in any such event, Lender may, at its option, declare the entire
unpaid balance of this Note together with interest accrued thereon, to be
immediately due and payable and Lender may proceed to exercise any rights or remedies
that it may have under this Note, the Loan Agreement, the other Loan Documents
or such other rights and remedies which Lender may have at law, equity or
otherwise.

14.        JOINT
AND SEVERAL LIABILITY: The liabilities of Borrower are joint
and several; provided, however, the release by Lender of either Borrower shall
not release any other person obligated on account of this Note.   No person obligated on account of this Note
may seek contribution from any other person also obligated unless and until all
liabilities to Lender from the person from whom contribution is sought have
been satisfied in full.

15.        SUCCESSORS
AND ASSIGNS: This Note shall be binding upon Borrower and
upon its respective heirs, successors, assigns and representatives, and shall
inure to the benefit of Lender and its successors, endorsees, and assigns.

16.        SECURITY: This Note is secured by the
Security Agreements, the Mortgage and the other Loan Documents, and all
amendments, modifications, supplements, substitutions, additions, renewals,
replacements and extensions thereof. 
Any and all deposits or other sums at any time credited by or due from
Lender to Borrower and any cash, securities, instruments, or other property of
Borrower which now or hereafter are at any time in the possession or control of
Lender, constitute additional security to Lender for the liabilities of
Borrower to Lender including, without limitation, the liability evidenced
hereby, and may be applied or set off by Lender against such liabilities at any
time from and after an Event of Default hereunder whether or not other
collateral is available to Lender.

17.        COLLECTION: Any check, draft, money order
or other instrument given in payment of all or any portion hereof may be
accepted by Lender and handled by collection in the customary manner, but the
same shall not constitute payment hereunder or diminish any rights of Lender
except to the extent that actual cash proceeds of such instrument are
unconditionally received by Lender and applied to this indebtedness in the manner
elsewhere herein provided.

18.        AMENDMENTS: This Note may be changed or
amended only by an agreement in writing signed by the party against whom
enforcement is sought.

19.        GOVERNING LAW; SUBMISSION TO JURISDICTION: This
Note is given to evidence debt for business or commercial purposes, is being
delivered to Lender at one of its offices in The Commonwealth of Massachusetts
and shall be governed by and construed under the laws of said
Commonwealth.  Borrower hereby submits
to personal jurisdiction in said Commonwealth for the enforcement of Borrower's
obligations hereunder, under the Loan Agreement and under the other Loan
Documents, and waives any and all personal rights under the law of any other
state to object to jurisdiction within such Commonwealth for the purposes of
litigation to enforce such obligations of Borrower.  In the event such litigation is commenced, Borrower agrees that
service of process may be made, and personal jurisdiction over Borrower obtained,
by service of a copy of the summons, complaint and other pleadings required to
commence such litigation upon Borrower at the address set forth in the preamble
to this Note.

20.        CAPTIONS: All paragraph and subparagraph
captions are for convenience of reference only and shall not affect the construction
of any provision herein.

             IN
WITNESS WHEREOF, this Note has been executed and delivered under seal this ___
day of June, 2001.

	 	 	BORROWER:	 
	 	 	 	 
	 	 	UFP
  TECHNOLOGIES, INC.	 
	 	 	 	 
	 	 	 	 	 
	 	 	By:	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Vice President,

  Chief Financial Officer and Treasurer	 
	 	 	 	 	 
	 	 	MOULDED
  FIBRE TECHNOLOGY, INC	.
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Treasurer	 
	 	 	 	 	 
	 	 	SIMCO
  INDUSTRIES, INC.	 
	 	 	 	 
	 	 	 	 
	 	 	By:
  	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Treasurer	 
	 	 	 	 	 
	 	 	SIMCO
  AUTOMOTIVE TRIM, INC.	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:
  	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Treasurer	 

 

Exhibit 10:45

MORTGAGE PROMISSORY NOTE

1.          DEFINED TERMS.  As used in this Term Promissory Note (the "Note"), the
following terms shall have the following meanings:

	1.1	Borrower:	UFP
  Technologies, Inc.
	 	 	a Delaware
  corporation,
	 	 	172 East Main
  Street
	 	 	Georgetown,
  MA 01833
	 	 	 
	 	 	Moulded Fibre
  Technology, Inc.
	 	 	a Maine
  corporation
	 	 	301 U.S.
  Route 1
	 	 	Scarborough,
  ME 04074
	 	 	 
	 	 	Simco Industries,
  Inc.
	 	 	a Michigan
  corporation
	 	 	51362
  Quadrate Drive
	 	 	Macomb
  Township, Michigan 48042
	 	 	 
	 	 	Simco
  Automotive Trim, Inc.
	 	 	a Michigan
  corporation
	 	 	51362
  Quadrate Drive
	 	 	Macomb
  Township, Michigan 48042
	 	 	 
	1.2	Lender:	Citizens Bank
  of Massachusetts
	 	 	28 State
  Street
	 	 	Boston, MA
  02109
	 	 	 
	1.3	Loan Amount:	$2,500,000.00
	 	 	 
	1.4	Interest Rate:	See Section 3
  below.
	 	 	 
	1.5	Maturity Date:	June 4, 2006

             1.6        Loan
Agreement:        a certain
Revolving Line of Credit, Acquisition Line of Credit, Term Loan and Mortgage
Loan Agreement of even date herewith by and between Borrower and Lender.

             1.7        Security
Agreements:             certain
Security Agreements of even date herewith from each Borrower to Lender covering
all of the business assets of each Borrower as more particularly set forth
therein.

             1.8        Mortgage:        a
certain Mortgage and Security Agreement of even date from UFP Technologies,
Inc. to Lender covering property located at 172 East Main Street, Georgetown,
MA as more particularly described in the Mortgage.

             1.9        Loan,
Loan Documents and Event of Default shall have the same meanings as
in the Loan Agreement.  The Loan
Documents are incorporated herein by reference.  All capitalized terms used herein and not otherwise defined herein
shall have the meanings as set forth in the Loan Agreement.

1.10      Prepayment Period:    In accordance with Section
9 herein.

2.          DEBT: For value received, Borrower hereby
promises to pay to the order of Lender the Loan Amount, together with interest
on all unpaid balances from the date of such advances made under this Note at
the interest rate set forth in this Note, together with all other amounts due
hereunder or under the Loan Documents.

3.          INTEREST:  Unless
the Borrower has elected and been granted a LIBOR Rate Option (as defined in
the Loan Agreement) with respect to this Loan (in which case interest shall be
computed as provided in the Loan Agreement), the Loan Amount shall accrue
interest at a fluctuating per annum rate of interest equal to the Prime Rate
(as defined in the Loan Agreement) plus the Applicable Margin (as defined and
determined in the Loan Agreement). 
Interest shall be calculated on the basis of the number of actual days
elapsed and a 360-day year.

4.          PAYMENTS: Borrower shall make payments of
interest on the amounts advanced by Lender under this Note monthly in arrears
while any part of the indebtedness evidenced hereby is unpaid commencing on the
first day of the month following the date of this Note (the “First Payment
Date”) and thereafter on each monthly anniversary of the First Payment Date or,
in the event Borrower has elected and been granted a LIBOR Rate Option, in
accordance with Section 2.5(a) of the Loan Agreement.  In addition to interest payments, Borrower shall make monthly
principal payments under the Note based upon a fifteen (15) year straight-line
amortization schedule in the amount of $13,889.00.  On the Maturity Date or on such earlier date as may be required
under the terms of this Note or any of the Loan Documents, Borrower shall pay
to Lender the entire then unpaid balance of principal and interest due under
this Note.

             Any
payments on this Note, whether such payment is of a regular installment or
represents a prepayment (if permitted hereunder), shall be made in coin and
currency of the United States of America which is legal tender for the payment
of public and private debts, in immediately available funds, to Lender at
Lender's address set forth or at such other address as Lender may from time to
time designate in writing.

5.          DEFAULT INTEREST: If any payment due
hereunder or under any of the Loan Documents is not paid within fifteen (15)
days when due, either at stated or accelerated maturity or pursuant to any of
the terms hereof, then and in such event, Borrower shall, in addition to any
other payment due hereunder, pay interest thereon from and after the date on
which such payment first becomes due at an annual interest rate equal to the
Interest Rate plus four percent (4.0%) and such interest shall be due and
payable, on demand, at such rate until the entire amount due is paid to Lender,
whether or not any action shall have been taken or proceeding commenced to
recover the same or to foreclose the Mortgage. 
Nothing in this Section 5 or in any other provision of this Note shall
constitute an extension of the time of payment of the indebtedness hereunder.

6.          DELINQUENCY CHARGES:  If
a regularly scheduled payment is more than fifteen (15)  days late, Borrower will be charged five
percent (5%) of the unpaid portion of the regularly scheduled payment.  The amount thereof shall be secured by the
Loan Documents and by any other Collateral held by Lender to secure such
indebtedness.  Borrower agrees that any
such delinquency charges shall not be deemed to be additional interest or
penalty, but shall be deemed to be liquidated damages because of the difficulty
in computing the actual amount of damages in advance.

7.          COSTS AND EXPENSES UPON DEFAULT: After
default, in addition to principal, interest and delinquency charges, Lender
shall be entitled to collect all costs of collection, including, but not
limited to, reasonable attorneys, fees and expenses, incurred in connection
with the protection or realization of collateral or in connection with any of
Lender's collection efforts, whether or not suit on this Note is filed, and all
such costs and expenses shall be payable on demand and until paid shall also be
secured by the Security Agreements and the other Loan Documents and by all
other Collateral held by Lender as security for Borrower's obligations to Lender.

8.          APPLICATION OF PAYMENTS: Unless an Event of
Default has occurred, all payments hereunder shall be applied first to
delinquency charges, costs of collection and enforcement and other similar
amounts due, if any, under this Note and under the other Loan Documents, then
to interest which is due and payable under this Note and the remainder, if any,
to principal due and payable under this Note. 
If an Event of Default has occurred, such payments may be applied to
sums due under this Note or under the other Loan Documents in any order and
combination that Lender may, in its sole and absolute discretion, determine.

9.          PERMITTED PREPAYMENT:    Borrower shall have the right to prepay this Note in
whole or in part at anytime without payment of premium or penalty for Prime
Rate Loans.  In the event of repayment
of all or a portion of the Loan or conversion of the Loan from a LIBOR Rate
Loan to a Prime Rate Loan for any reason other than the expiration of an
Interest Period, the Borrower shall also pay to the Bank all applicable LIBOR
Breakage Costs (as defined in the Loan Agreement) and or interest rate hedge
agreement breakage costs, if applicable, associated with the repayment or
conversion of the Loan in accordance with the Loan Agreement.

10.        COSTS; ILLEGALITY OF LOAN: In addition to
principal, interest and delinquency charges, Borrower shall pay all reasonable
costs and expenses, including, without limitation, reasonable attorneys’ fees
and all reasonable expenses and disbursements of counsel, in connection with
the protection, realization or enforcement of any of Lender's rights against
Borrower and against any collateral given Lender to secure this Note or any
other liabilities of Borrower to Lender (whether or not suit or foreclosure is
instituted by or against Lender).

11.        WAIVERS: BORROWER SEVERALLY AND IRREVOCABLY WAIVES ITS RIGHTS
TO NOTICE AND HEARING TO THE EXTENT PERMITTED BY LAW OF ANY STATE OR FEDERAL
LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH LENDER MAY DESIRE TO USE, and,
further, severally and irrevocably waive presentment for payment, demand,
notice of nonpayment, notice of intention to accelerate the maturity of this
Note, diligence in collection, commencement of suit against any obligor, notice
of protest, and protest of this Note and all other notices in connection with
the delivery, acceptance, performance, default or enforcement of the payment of
this Note, before or after the maturity of this Note, with or without notice to
Borrower, and agree that Borrower’s liability shall not be in any manner
affected by any indulgence, extension of time, renewal, waiver or modification
granted or consented to by Lender. 
Borrower consents to any and all extensions of time, renewals, waivers
or modifications that may be granted by Lender with respect to the payment or
other provisions of this Note, and to any substitution, exchange or release of
the collateral for this Note, or any part thereof, with or without substitution
of said collateral.  Any delay on the
part of Lender in exercising any right under this Note shall not operate as a
waiver of any such right, and any waiver granted or consented to on one
occasion shall not operate as a waiver in the event of any subsequent default.

12.        NO USURY: Borrower shall not be obligated
to pay and Lender shall not collect interest at a rate higher than the maximum
permitted by law or the maximum that will notsubject the Lender to any civil or criminal penalties.  If, because of the acceleration of maturity
the payment of interest in advance or any other reason, Borrower is required,
under the provisions of any of the Loan Documents or to otherwise, to pay
interest at a rate in excess of such maximum rate, the rate of interest under
such provisions shall immediately and automatically be reduced to such maximum
rate, together with interest thereon at the rate provided herein from the date
of such payment, shall be immediately and automatically applied to the
reduction of the unpaid principal balance of Loans as of the date on which such
excess payment was made.   If the amount
to be so applied to reduction of the unpaid principal balance exceeds the
unpaid principal balance, the amount of such excess shall be refunded by Lender
to Borrower.

13.        ACCELERATION AND OTHER REMEDIES: If:

             (a)         Borrower fails to pay any sum within
fifteen (15) days of when due under this Note; or

             (b)         an "Event of Default", as
said term is defined in the Loan Agreement or any other Loan Document, occurs;

then, and in any such event, Lender may,
at its option, declare the entire unpaid balance of this Note together with
interest accrued thereon, to be immediately due and payable and Lender may
proceed to exercise any rights or remedies that it may have under this Note,
the Loan Agreement, the other Loan Documents or such other rights and remedies
which Lender may have at law, equity or otherwise.

14.        JOINT
AND SEVERAL LIABILITY: The liabilities of Borrower are joint
and several; provided, however, the release by Lender of either Borrower shall
not release any other person obligated on account of this Note.   No person obligated on account of this Note
may seek contribution from any other person also obligated unless and until all
liabilities to Lender from the person from whom contribution is sought have
been satisfied in full.

15.        SUCCESSORS
AND ASSIGNS: This Note shall be binding upon Borrower and
upon its respective heirs, successors, assigns and representatives, and shall
inure to the benefit of Lender and its successors, endorsees, and assigns.

16.        SECURITY: This Note is secured by the
Security Agreements, the Mortgage and the other Loan Documents, and all
amendments, modifications, supplements, substitutions, additions, renewals,
replacements and extensions thereof. 
Any and all deposits or other sums at any time credited by or due from
Lender to Borrower and any cash, securities, instruments, or other property of
Borrower which now or hereafter are at any time in the possession or control of
Lender, constitute additional security to Lender for the liabilities of
Borrower to Lender including, without limitation, the liability evidenced
hereby, and may be applied or set off by Lender against such liabilities at any
time from and after an Event of Default hereunder whether or not other
collateral is available to Lender.

17.        COLLECTION: Any check, draft, money order
or other instrument given in payment of all or any portion hereof may be
accepted by Lender and handled by collection in the customary manner, but the
same shall not constitute payment hereunder or diminish any rights of Lender
except to the extent that actual cash proceeds of such instrument are
unconditionally received by Lender and applied to this indebtedness in the
manner elsewhere herein provided.

18.        AMENDMENTS: This Note may be changed or
amended only by an agreement in writing signed by the party against whom
enforcement is sought.

19.        GOVERNING LAW; SUBMISSION TO JURISDICTION: This
Note is given to evidence debt for business or commercial purposes, is being
delivered to Lender at one of its offices in The Commonwealth of Massachusetts
and shall be governed by and construed under the laws of said
Commonwealth.  Borrower hereby submits
to personal jurisdiction in said Commonwealth for the enforcement of Borrower's
obligations hereunder, under the Loan Agreement and under the other Loan
Documents, and waives any and all personal rights under the law of any other
state to object to jurisdiction within such Commonwealth for the purposes of
litigation to enforce such obligations of Borrower.  In the event such litigation is commenced, Borrower agrees that
service of process may be made, and personal jurisdiction over Borrower
obtained, by service of a copy of the summons, complaint and other pleadings
required to commence such litigation upon Borrower at the address set forth in
the preamble to this Note.

20.        CAPTIONS: All paragraph and subparagraph
captions are for convenience of reference only and shall not affect the
construction of any provision herein.

             IN
WITNESS WHEREOF, this Note has been executed and delivered under seal this ___
day of June, 2001.

	 	 	BORROWER:	 
	 	 	 	 
	 	 	UFP
  TECHNOLOGIES, INC.	 
	 	 	 	 
	 	 	 	 	 
	 	 	By:	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Vice President,

  Chief Financial Officer and Treasurer	 
	 	 	 	 	 
	 	 	MOULDED
  FIBRE TECHNOLOGY, INC	.
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Treasurer	 
	 	 	 	 	 
	 	 	SIMCO
  INDUSTRIES, INC.	 
	 	 	 	 
	 	 	 	 
	 	 	By:
  	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Treasurer	 
	 	 	 	 	 
	 	 	SIMCO
  AUTOMOTIVE TRIM, INC.	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:
  	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Treasurer	 

Exhibit 10:45

REVOLVING LINE OF CREDIT
PROMISSORY NOTE

1.          DEFINED TERMS.  As used in this Revolving Line of Credit Note (the
"Note"), the following terms shall have the following meanings:

	1.1	Borrower:	UFP
  Technologies, Inc.
	 	 	a Delaware
  corporation,
	 	 	172 East Main
  Street
	 	 	Georgetown,
  MA 01833
	 	 	 
	 	 	Moulded Fibre
  Technology, Inc.
	 	 	a Maine
  corporation
	 	 	301 U.S.
  Route 1
	 	 	Scarborough,
  ME 04074
	 	 	 
	 	 	Simco
  Industries, Inc.
	 	 	a Michigan
  corporation
	 	 	51362
  Quadrate Drive
	 	 	Macomb
  Township, Michigan 48042
	 	 	 
	 	 	Simco
  Automotive Trim, Inc.
	 	 	a Michigan
  corporation
	 	 	51362
  Quadrate Drive
	 	 	Macomb
  Township, Michigan 48042
	 	 	 
	1.2	Lender:	Citizens Bank
  of Massachusetts
	 	 	28 State
  Street
	 	 	Boston, MA
  02109
	 	 	 
	1.3	Loan Amount:	Not to exceed
  $10,000,000.00
	 	 	 
	1.4	Interest Rate:	See Section 3
  below.
	 	 	 
	1.5	Maturity Date:	April 30,
  2003

             1.6        Loan
Agreement:        a certain
Revolving Line of Credit, Acquisition Line of Credit, Term Loan and Mortgage
Loan Agreement of even date herewith by and between Borrower and Lender.

             1.7        Security
Agreements:             certain
Security Agreements of even date herewith from each Borrower to Lender covering
all of the business assets of each Borrower as more particularly set forth
therein.

             1.8        Mortgage:        a certain Mortgage and Security
Agreement of even date from UFP Technologies, Inc. to Lender covering property
located at 172 East Main Street, Georgetown, MA as more particularly described
in the Mortgage.

             1.9        Loan,
Loan Documents and Event of Default shall have the same meanings as
in the Loan Agreement.  The Loan
Documents are incorporated herein by reference.  All capitalized terms used herein and not otherwise defined
herein shall have the meanings as set forth in the Loan Agreement.

             1.10      Prepayment
Period:    In accordance with Section 9 herein.

2.          DEBT: For value received, Borrower hereby
promises to pay to the order of Lender the Loan Amount, or so much as has been
advanced by Lender from time to time pursuant to the Loan Agreement, together
with interest on all unpaid balances from the date of such advances made under
this Note at the interest rate set forth in this Note, together with all other
amounts due hereunder or under the Loan Documents.  The Loan Amount is a revolving line of credit loan, such that,
prior to demand and provided no Events of Default exist under the Note or other
Loan Documents, Borrower may from time to time, borrow and re-borrow principal
under the Note so long as the outstanding Aggregate Revolving Loans do not
exceed the Loan Amount.

3.          INTEREST: Unless the Borrower has elected
and been granted a LIBOR Rate Option (as defined in the Loan Agreement) with
respect to this Loan (in which case interest shall be computed as provided in
the Loan Agreement), the Loan Amount shall accrue interest at a fluctuating per
annum rate of interest equal to the Prime Rate (as defined in the Loan
Agreement) plus the Applicable Margin (as defined and determined in the Loan
Agreement).  Interest shall be
calculated on the basis of the number of actual days elapsed and a 360-day
year.

4.          PAYMENTS: Borrower shall make payments of
interest only on the amounts advanced by Lender under this Note monthly in
arrears while any part of the indebtedness evidenced hereby is unpaid
commencing on the first day of the month following the date of the initial
advance under this Note (the “First Payment Date”) and thereafter on each
monthly anniversary of the First Payment Date or, in the event Borrower has
elected and been granted a LIBOR Rate Option, in accordance with Section 2.5(a)
of the Loan Agreement..

             On
the Maturity Date or on such earlier date as may be required under the terms of
this Note or any of the Loan Documents, Borrower shall pay to Lender the entire
then unpaid balance of principal and interest under this Note.

             Any
payments on this Note, whether such payment is of a regular installment or
represents a prepayment (if permitted hereunder), shall be made in coin and
currency of the United States of America which is legal tender for the payment
of public and private debts, in immediately available funds, to Lender at
Lender's address set forth or at such other address as Lender may from time to
time designate in writing.

5.          DEFAULT INTEREST: If any payment due
hereunder or under any of the Loan Documents is not paid within fifteen (15)
days when due, either at stated or accelerated maturity or pursuant to any of
the terms hereof, then and in such event, Borrower shall, in addition to any
other payment due hereunder, pay interest thereon from and after the date on which
such payment first becomes due at an annual interest rate equal to the Interest
Rate plus four percent (4.0%) and such interest shall be due and payable, on
demand, at such rate until the entire amount due is paid to Lender, whether or
not any action shall have been taken or proceeding commenced to recover the
same or to foreclose the Mortgage. 
Nothing in this Section 5 or in any other provision of this Note shall
constitute an extension of the time of payment of the indebtedness hereunder.

6.          DELINQUENCY CHARGES: 
If a regularly scheduled payment is more than fifteen (15)
days late, Borrower will be charged five percent (5%) of the unpaid portion of
the regularly scheduled payment.  The
amount thereof shall be secured by the Loan Documents and by any other
Collateral held by Lender to secure such indebtedness.  Borrower agrees that any such delinquency
charges shall not be deemed to be additional interest or penalty, but shall be
deemed to be liquidated damages because of the difficulty in computing the
actual amount of damages in advance.

7.          COSTS AND EXPENSES UPON DEFAULT: After
default, in addition to principal, interest and delinquency charges, Lender
shall be entitled to collect all costs of collection, including, but not
limited to, reasonable attorneys, fees and expenses, incurred in connection
with the protection or realization of collateral or in connection with any of
Lender's collection efforts, whether or not suit on this Note is filed, and all
such costs and expenses shall be payable on demand and until paid shall also be
secured by the Security Agreements and the other Loan Documents and by all
other Collateral held by Lender as security for Borrower's obligations to
Lender.

8.          APPLICATION OF PAYMENTS: Unless an Event of
Default has occurred, all payments hereunder shall be applied first to
delinquency charges, costs of collection and enforcement and other similar
amounts due, if any, under this Note and under the other Loan Documents, then
to interest which is due and payable under this Note and the remainder, if any,
to principal due and payable under this Note. 
If an Event of Default has occurred, such payments may be applied to
sums due under this Note or under the other Loan Documents in any order and
combination that Lender may, in its sole and absolute discretion, determine.

9.          PERMITTED PREPAYMENT:    Borrower shall have the right to prepay this Note in
whole or in part at anytime without payment of premium or penalty for Prime
Rate Loans.  In the event of repayment
of all or a portion of the Loan or conversion of the Loan from a LIBOR Rate
Loan to a Prime Rate Loan for any reason other than the expiration of an
Interest Period, the Borrower shall also pay to the Bank all applicable LIBOR
Breakage Costs (as defined in the Loan Agreement) and or interest rate hedge
agreement breakage costs, if applicable, associated with the repayment or
conversion of the Loan in accordance with the Loan Agreement.

10.        COSTS; ILLEGALITY OF LOAN: In addition to
principal, interest and delinquency charges, Borrower shall pay all reasonable
costs and expenses, including, without limitation, reasonable attorneys’ fees
and all reasonable expenses and disbursements of counsel, in connection with
the protection, realization or enforcement of any of Lender's rights against
Borrower and against any collateral given Lender to secure this Note or any
other liabilities of Borrower to Lender (whether or not suit or foreclosure is
instituted by or against Lender).

11.        WAIVERS: BORROWER SEVERALLY AND IRREVOCABLY
WAIVES ITS RIGHTS TO NOTICE AND HEARING TO THE EXTENT PERMITTED BY LAW OF ANY
STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH LENDER MAY
DESIRE TO USE, and, further, severally and irrevocably waive presentment for
payment, demand, notice of nonpayment, notice of intention to accelerate the
maturity of this Note, diligence in collection, commencement of suit against
any obligor, notice of protest, and protest of this Note and all other notices
in connection with the delivery, acceptance, performance, default or
enforcement of the payment of this Note, before or after the maturity of this
Note, with or without notice to Borrower, and agree that Borrower’s liability
shall not be in any manner affected by any indulgence, extension of time,
renewal, waiver or modification granted or consented to by Lender.  Borrower consents to any and all extensions
of time, renewals, waivers or modifications that may be granted by Lender with
respect to the payment or other provisions of this Note, and to any substitution,
exchange or release of the collateral for this Note, or any part thereof, with
or without substitution of said collateral. 
Any delay on the part of Lender in exercising any right under this Note
shall not operate as a waiver of any such right, and any waiver granted or
consented to on one occasion shall not operate as a waiver in the event of any
subsequent default.

12.        NO USURY: Borrower shall not be obligated
to pay and Lender shall not collect interest at a rate higher than the maximum
permitted by law or the maximum that will notsubject the Lender to any civil or criminal penalties.  If, because of the acceleration of maturity
the payment of interest in advance or any other reason, Borrower is required,
under the provisions of any of the Loan Documents or to otherwise, to pay
interest at a rate in excess of such maximum rate, the rate of interest under
such provisions shall immediately and automatically be reduced to such maximum
rate, together with interest thereon at the rate provided herein from the date
of such payment, shall be immediately and automatically applied to the
reduction of the unpaid principal balance of Loans as of the date on which such
excess payment was made.   If the amount
to be so applied to reduction of the unpaid principal balance exceeds the
unpaid principal balance, the amount of such excess shall be refunded by Lender
to Borrower.

13.        ACCELERATION AND OTHER REMEDIES: If:

             (a)         Borrower fails to pay any sum within
fifteen (15) days of when due under this Note; or

             (b)         an "Event of Default", as
said term is defined in the Loan Agreement or any other Loan Document, occurs;

then, and in any such event, Lender may,
at its option, declare the entire unpaid balance of this Note together with
interest accrued thereon, to be immediately due and payable and Lender may
proceed to exercise any rights or remedies that it may have under this Note,
the Loan Agreement, the other Loan Documents or such other rights and remedies
which Lender may have at law, equity or otherwise.

14.        JOINT
AND SEVERAL LIABILITY: The liabilities of Borrower are joint
and several; provided, however, the release by Lender of either Borrower shall
not release any other person obligated on account of this Note.   No person obligated on account of this Note
may seek contribution from any other person also obligated unless and until all
liabilities to Lender from the person from whom contribution is sought have
been satisfied in full.

15.        SUCCESSORS
AND ASSIGNS: This Note shall be binding upon Borrower and
upon its respective heirs, successors, assigns and representatives, and shall
inure to the benefit of Lender and its successors, endorsees, and assigns.

16.        SECURITY: This Note is secured by the
Security Agreements, the Mortgage and the other Loan Documents, and all amendments,
modifications, supplements, substitutions, additions, renewals, replacements
and extensions thereof.  Any and all
deposits or other sums at any time credited by or due from Lender to Borrower
and any cash, securities, instruments, or other property of Borrower which now
or hereafter are at any time in the possession or control of Lender, constitute
additional security to Lender for the liabilities of Borrower to Lender
including, without limitation, the liability evidenced hereby, and may be applied
or set off by Lender against such liabilities at any time from and after an
Event of Default hereunder whether or not other collateral is available to
Lender.

17.        COLLECTION: Any check, draft, money order
or other instrument given in payment of all or any portion hereof may be
accepted by Lender and handled by collection in the customary manner, but the
same shall not constitute payment hereunder or diminish any rights of Lender
except to the extent that actual cash proceeds of such instrument are unconditionally
received by Lender and applied to this indebtedness in the manner elsewhere
herein provided.

18.        AMENDMENTS: This Note may be changed or
amended only by an agreement in writing signed by the party against whom
enforcement is sought.

19.        GOVERNING LAW; SUBMISSION TO JURISDICTION: This
Note is given to evidence debt for business or commercial purposes, is being
delivered to Lender at one of its offices in The Commonwealth of Massachusetts
and shall be governed by and construed under the laws of said
Commonwealth.  Borrower hereby submits
to personal jurisdiction in said Commonwealth for the enforcement of Borrower's
obligations hereunder, under the Loan Agreement and under the other Loan
Documents, and waives any and all personal rights under the law of any other
state to object to jurisdiction within such Commonwealth for the purposes of
litigation to enforce such obligations of Borrower.  In the event such litigation is commenced, Borrower agrees that
service of process may be made, and personal jurisdiction over Borrower
obtained, by service of a copy of the summons, complaint and other pleadings
required to commence such litigation upon Borrower at the address set forth in
the preamble to this Note.

20.        CAPTIONS: All
paragraph and subparagraph captions are for convenience of reference only and
shall not affect the construction of any provision herein.

             IN
WITNESS WHEREOF, this Note has been executed and delivered under seal this ___
day of June, 2001.

	 	 	BORROWER:	 
	 	 	 	 
	 	 	UFP
  TECHNOLOGIES, INC.	 
	 	 	 	 
	 	 	 	 	 
	 	 	By:	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Vice President,

  Chief Financial Officer and Treasurer	 
	 	 	 	 	 
	 	 	MOULDED
  FIBRE TECHNOLOGY, INC	.
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Treasurer	 
	 	 	 	 	 
	 	 	SIMCO
  INDUSTRIES, INC.	 
	 	 	 	 
	 	 	 	 
	 	 	By:
  	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Treasurer	 
	 	 	 	 	 
	 	 	SIMCO
  AUTOMOTIVE TRIM, INC.	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:
  	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Treasurer	 

 

Exhibit 10:45

TERM PROMISSORY NOTE

1.          DEFINED TERMS.  As used in this Term Promissory Note (the "Note"), the
following terms shall have the following meanings:

	1.1	Borrower:	UFP
  Technologies, Inc.
	 	 	a Delaware
  corporation,
	 	 	172 East Main
  Street
	 	 	Georgetown,
  MA 01833
	 	 	 
	 	 	Moulded Fibre
  Technology, Inc.
	 	 	a Maine corporation
	 	 	301 U.S.
  Route 1
	 	 	Scarborough,
  ME 04074
	 	 	 
	 	 	Simco
  Industries, Inc.
	 	 	a Michigan
  corporation
	 	 	51362
  Quadrate Drive
	 	 	Macomb
  Township, Michigan 48042
	 	 	 
	 	 	Simco
  Automotive Trim, Inc.
	 	 	a Michigan
  corporation
	 	 	51362
  Quadrate Drive
	 	 	Macomb
  Township, Michigan 48042
	 	 	 
	1.2	Lender:	Citizens Bank
  of Massachusetts
	 	 	28 State
  Street
	 	 	Boston, MA
  02109
	 	 	 
	1.3	Loan Amount:	$6,500,000.00
	 	 	 
	1.4	Interest Rate:	See Section 3
  below.
	 	 	 
	1.5	Maturity Date:	June 4, 2006

             1.6        Loan
Agreement:        a certain
Revolving Line of Credit, Acquisition Line of Credit, Term Loan and Mortgage
Loan Agreement of even date herewith by and between Borrower and Lender.

             1.7        Security
Agreements:             certain
Security Agreements of even date herewith from each Borrower to Lender covering
all of the business assets of each Borrower as more particularly set forth
therein.

             1.8        Mortgage:        a
certain Mortgage and Security Agreement of even date from UFP Technologies,
Inc. to Lender covering property located at 172 East Main Street, Georgetown,
MA as more particularly described in the Mortgage.

             1.9        Loan,
Loan Documents and Event of Default shall have the same meanings as
in the Loan Agreement.  The Loan
Documents are incorporated herein by reference.  All capitalized terms used herein and not otherwise defined
herein shall have the meanings as set forth in the Loan Agreement.

1.10      Prepayment Period:    In accordance with Section
9 herein.

2.          DEBT: For value received, Borrower hereby
promises to pay to the order of Lender the Loan Amount, together with interest
on all unpaid balances from the date of such advances made under this Note at
the interest rate set forth in this Note, together with all other amounts due
hereunder or under the Loan Documents.

3.          INTEREST:   Unless the Borrower has elected and been granted a LIBOR Rate
Option (as defined in the Loan Agreement) with respect to this Loan (in which
case interest shall be computed as provided in the Loan Agreement), the Loan
Amount shall accrue interest at a fluctuating per annum rate of interest equal
to the Prime Rate (as defined in the Loan Agreement) plus the Applicable Margin
(as defined and determined in the Loan Agreement).  Interest shall be calculated on the basis of the number of actual
days elapsed and a 360-day year.

4.          PAYMENTS: Borrower shall make payments of
interest on the amounts advanced by Lender under this Note monthly in arrears
while any part of the indebtedness evidenced hereby is unpaid commencing on the
first day of the month following the date of this Note (the “First Payment
Date”) and thereafter on each monthly anniversary of the First Payment Date or,
in the event Borrower has elected and been granted a LIBOR Rate Option, in
accordance with Section 2.5(a) of the Loan Agreement.  In addition to interest payments, Borrower shall make monthly
principal payments under the Note based upon a five (5) year straight-line
amortization schedule in the amount of $108,333.00 .  On the Maturity Date or on such earlier date as may be required
under the terms of this Note or any of the Loan Documents, Borrower shall pay
to Lender the entire then unpaid balance of principal and interest due under
this Note.

             Any
payments on this Note, whether such payment is of a regular installment or
represents a prepayment (if permitted hereunder), shall be made in coin and
currency of the United States of America which is legal tender for the payment
of public and private debts, in immediately available funds, to Lender at
Lender's address set forth or at such other address as Lender may from time to
time designate in writing.

5.          DEFAULT INTEREST: If any payment due
hereunder or under any of the Loan Documents is not paid within fifteen (15)
days when due, either at stated or accelerated maturity or pursuant to any of
the terms hereof, then and in such event, Borrower shall, in addition to any
other payment due hereunder, pay interest thereon from and after the date on
which such payment first becomes due at an annual interest rate equal to the
Interest Rate plus four percent (4.0%) and such interest shall be due and
payable, on demand, at such rate until the entire amount due is paid to Lender,
whether or not any action shall have been taken or proceeding commenced to
recover the same or to foreclose the Mortgage. 
Nothing in this Section 5 or in any other provision of this Note shall
constitute an extension of the time of payment of the indebtedness hereunder.

6.          DELINQUENCY CHARGES: 
If a regularly scheduled payment is more than fifteen (15)
days late, Borrower will be charged five percent (5%) of the unpaid portion of
the regularly scheduled payment.  The
amount thereof shall be secured by the Loan Documents and by any other
Collateral held by Lender to secure such indebtedness.  Borrower agrees that any such delinquency
charges shall not be deemed to be additional interest or penalty, but shall be
deemed to be liquidated damages because of the difficulty in computing the
actual amount of damages in advance.

7.          COSTS AND EXPENSES UPON DEFAULT: After
default, in addition to principal, interest and delinquency charges, Lender
shall be entitled to collect all costs of collection, including, but not
limited to, reasonable attorneys, fees and expenses, incurred in connection
with the protection or realization of collateral or in connection with any of
Lender's collection efforts, whether or not suit on this Note is filed, and all
such costs and expenses shall be payable on demand and until paid shall also be
secured by the Security Agreements and the other Loan Documents and by all other
Collateral held by Lender as security for Borrower's obligations to Lender.

8.          APPLICATION OF PAYMENTS: Unless an Event of
Default has occurred, all payments hereunder shall be applied first to
delinquency charges, costs of collection and enforcement and other similar
amounts due, if any, under this Note and under the other Loan Documents, then
to interest which is due and payable under this Note and the remainder, if any,
to principal due and payable under this Note. 
If an Event of Default has occurred, such payments may be applied to
sums due under this Note or under the other Loan Documents in any order and
combination that Lender may, in its sole and absolute discretion, determine.

9.          PERMITTED PREPAYMENT:    Borrower shall have the right to prepay this Note in
whole or in part at anytime without payment of premium or penalty for Prime
Rate Loans.  In the event of repayment
of all or a portion of the Loan or conversion of the Loan from a LIBOR Rate
Loan to a Prime Rate Loan for any reason other than the expiration of an
Interest Period, the Borrower shall also pay to the Bank all applicable LIBOR
Breakage Costs (as defined in the Loan Agreement) and or interest rate hedge
agreement breakage costs, if applicable, associated with the repayment or
conversion of the Loan in accordance with the Loan Agreement.

10.        COSTS; ILLEGALITY OF LOAN: In addition to
principal, interest and delinquency charges, Borrower shall pay all reasonable
costs and expenses, including, without limitation, reasonable attorneys’ fees and
all reasonable expenses and disbursements of counsel, in connection with the
protection, realization or enforcement of any of Lender's rights against
Borrower and against any collateral given Lender to secure this Note or any
other liabilities of Borrower to Lender (whether or not suit or foreclosure is
instituted by or against Lender).

11.        WAIVERS: BORROWER SEVERALLY AND IRREVOCABLY
WAIVES ITS RIGHTS TO NOTICE AND HEARING TO THE EXTENT PERMITTED BY LAW OF ANY
STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH LENDER MAY
DESIRE TO USE, and, further, severally and irrevocably waive presentment for
payment, demand, notice of nonpayment, notice of intention to accelerate the
maturity of this Note, diligence in collection, commencement of suit against
any obligor, notice of protest, and protest of this Note and all other notices
in connection with the delivery, acceptance, performance, default or
enforcement of the payment of this Note, before or after the maturity of this
Note, with or without notice to Borrower, and agree that Borrower’s liability
shall not be in any manner affected by any indulgence, extension of time,
renewal, waiver or modification granted or consented to by Lender.  Borrower consents to any and all extensions
of time, renewals, waivers or modifications that may be granted by Lender with
respect to the payment or other provisions of this Note, and to any
substitution, exchange or release of the collateral for this Note, or any part
thereof, with or without substitution of said collateral.  Any delay on the part of Lender in
exercising any right under this Note shall not operate as a waiver of any such
right, and any waiver granted or consented to on one occasion shall not operate
as a waiver in the event of any subsequent default.

12.        NO USURY: Borrower shall not be obligated
to pay and Lender shall not collect interest at a rate higher than the maximum
permitted by law or the maximum that will not subject the Lender to any civil
or criminal penalties.  If, because of
the acceleration of maturity the payment of interest in advance or any other
reason, Borrower is required, under the provisions of any of the Loan Documents
or to otherwise, to pay interest at a rate in excess of such maximum rate, the
rate of interest under such provisions shall immediately and automatically be
reduced to such maximum rate, together with interest thereon at the rate
provided herein from the date of such payment, shall be immediately and
automatically applied to the reduction of the unpaid principal balance of Loans
as of the date on which such excess payment was made.   If the amount to be so applied to reduction of the unpaid
principal balance exceeds the unpaid principal balance, the amount of such
excess shall be refunded by Lender to Borrower.

13.        ACCELERATION AND OTHER REMEDIES: If:

             (a)         Borrower fails to pay any sum within
fifteen (15) days of when due under this Note; or

             (b)         an "Event of Default", as
said term is defined in the Loan Agreement or any other Loan Document, occurs;

then, and in any such event, Lender may,
at its option, declare the entire unpaid balance of this Note together with
interest accrued thereon, to be immediately due and payable and Lender may
proceed to exercise any rights or remedies that it may have under this Note,
the Loan Agreement, the other Loan Documents or such other rights and remedies
which Lender may have at law, equity or otherwise.

14.        JOINT AND SEVERAL LIABILITY: The
liabilities of Borrower are joint and several; provided, however, the release
by Lender of either Borrower shall not release any other person obligated on
account of this Note.   No person
obligated on account of this Note may seek contribution from any other person
also obligated unless and until all liabilities to Lender from the person from
whom contribution is sought have been satisfied in full.

15.        SUCCESSORS AND ASSIGNS: This Note shall be
binding upon Borrower and upon its respective heirs, successors, assigns and
representatives, and shall inure to the benefit of Lender and its successors,
endorsees, and assigns.

16.        SECURITY: This Note is secured by the
Security Agreements, the Mortgage and the other Loan Documents, and all
amendments, modifications, supplements, substitutions, additions, renewals,
replacements and extensions thereof. 
Any and all deposits or other sums at any time credited by or due from
Lender to Borrower and any cash, securities, instruments, or other property of
Borrower which now or hereafter are at any time in the possession or control of
Lender, constitute additional security to Lender for the liabilities of
Borrower to Lender including, without limitation, the liability evidenced
hereby, and may be applied or set off by Lender against such liabilities at any
time from and after an Event of Default hereunder whether or not other
collateral is available to Lender.

17.        COLLECTION: Any check, draft, money order
or other instrument given in payment of all or any portion hereof may be
accepted by Lender and handled by collection in the customary manner, but the
same shall not constitute payment hereunder or diminish any rights of Lender
except to the extent that actual cash proceeds of such instrument are
unconditionally received by Lender and applied to this indebtedness in the
manner elsewhere herein provided.

18.        AMENDMENTS: This Note may be changed or
amended only by an agreement in writing signed by the party against whom
enforcement is sought.

19.        GOVERNING LAW; SUBMISSION TO JURISDICTION: This
Note is given to evidence debt for business or commercial purposes, is being
delivered to Lender at one of its offices in The Commonwealth of Massachusetts
and shall be governed by and construed under the laws of said
Commonwealth.  Borrower hereby submits
to personal jurisdiction in said Commonwealth for the enforcement of Borrower's
obligations hereunder, under the Loan Agreement and under the other Loan
Documents, and waives any and all personal rights under the law of any other
state to object to jurisdiction within such Commonwealth for the purposes of
litigation to enforce such obligations of Borrower.  In the event such litigation is commenced, Borrower agrees that
service of process may be made, and personal jurisdiction over Borrower
obtained, by service of a copy of the summons, complaint and other pleadings
required to commence such litigation upon Borrower at the address set forth in
the preamble to this Note.

20.        CAPTIONS: All paragraph and subparagraph
captions are for convenience of reference only and shall not affect the
construction of any provision herein.

             IN
WITNESS WHEREOF, this Note has been executed and delivered under seal this ___
day of June, 2001.

	 	 	BORROWER:	 
	 	 	 	 
	 	 	UFP
  TECHNOLOGIES, INC.	 
	 	 	 	 
	 	 	 	 	 
	 	 	By:	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Vice President,

  Chief Financial Officer and Treasurer	 
	 	 	 	 	 
	 	 	MOULDED
  FIBRE TECHNOLOGY, INC	.
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Treasurer	 
	 	 	 	 	 
	 	 	SIMCO
  INDUSTRIES, INC.	 
	 	 	 	 
	 	 	 	 
	 	 	By:
  	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, Treasurer	 
	 	 	 	 	 
	 	 	SIMCO
  AUTOMOTIVE TRIM, INC.	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:
  	 	 
	

	 	 	

	 
	Witness	 	 	Ronald
  J. Lataille, TreasurerPrepared by MerrillDirect

As
amended

July 13, 2001

 

 

 

2001 Incentive and Non-Statutory Stock Option Plan

of

THE J.
JILL GROUP, INC.

 

TABLE
OF CONTENTS

	SECTION 1 	 	PURPOSE

	 
	SECTION 2 	 	ADMINISTRATION

	 
	2.1	 	The
  Committee.

	 
	2.2	 	Powers of the Committee.

	 
	SECTION 3 	 	STOCK

	 
	3.1	 	Stock
  to be Issued.

	 
	3.2	 	Expiration,
  Cancellation or Termination of Option.

	 
	3.3	 	Limitation
  on Grants.

	 
	SECTION
  4 	 	ELIGIBILITY

	 
	4.1	 	Persons
  Eligible.

	 
	4.2	 	Greater-Than-Ten-Percent
  Stockholders.

	 
	4.3	 	Maximum
  Aggregate Fair Market Value.

	 
	4.4	 	Option Grants
  to Eligible Directors.

	 
	SECTION
  5 	 	TERMINATION
  OF EMPLOYMENT OR DEATH OF OPTIONEE

	 
	5.1	 	Termination of
  Employment.

	 
	5.2	 	Death or
  Retirement of Optionee.

	 
	SECTION 6 	 	TERMS OF THE
  OPTION AGREEMENTS

	 
	6.1	 	Expiration
  of Option.

	 
	6.2	 	Exercise.

	 
	6.3	 	Purchase
  Price.

	 
	6.4	 	Transferability of
  Options.

	 
	6.5	 	Rights
  of Optionees.

	 
	6.6	 	Repurchase
  Right.

	 
	6.7	 	"Lockup"
  Agreement.

	 
	SECTION
  7	 	METHOD
  OF EXERCISE, PAYMENT OF PURCHASE PRICE

	 
	7.1	 	Method
  of Exercise.

	 
	7.2	 	Payment of Purchase
  Price.

	 
	SECTION
  8 	 	CHANGES
  IN COMPANY’S CAPITAL STRUCTURE

	 
	8.1	 	Rights
  of Company.

	 
	8.2	 	Recapitalization,
  Stock Splits and Dividends.

	 
	8.3	 	Merger without
  Change of Control.

	 
	8.4	 	Sale or
  Merger with Change of Control.

	 
	8.5	 	Adjustments
  to Common Stock Subject to Options.

	 
	8.6	 	Miscellaneous.

	 
	SECTION 9 	 	GENERAL RESTRICTION

	 
	9.1	 	Investment Representations.

	 
	9.2	 	Compliance with
  Securities Laws.

	 
	9.3	 	Employment Obligation.

	 
	9.4	 	Withholding
  Tax.

	 
	SECTION
  10 	 	AMENDMENT
  OR TERMINATION OF THE PLAN

	 
	SECTION 11 	 	NONEXCLUSIVITY
  OF THE PLAN

	 
	SECTION
  12 	 	EFFECTIVE
  DATE AND DURATION OF THE PLAN	 

 

 

2001 Incentive and
Non-Statutory Stock Option Plan

of

The J. Jill Group, Inc.

Section
1. Purpose

             This 2001 Incentive and
Non-Statutory Stock Option Plan (the “Plan”) of The J. Jill Group, Inc. (the
"Company"), is designed to provide additional incentive to executives
and other key employees of the Company, and any parent or subsidiary of the
Company, and for certain other individuals providing services to or acting as
directors of the Company or any such parent or subsidiary.  The Company intends that this purpose will
be effected by the granting of incentive stock options ("Incentive Stock
Options") as defined in Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), and Non-Statutory stock options
("Non-Statutory Options") under the Plan which afford such
executives, key employees or other individuals an opportunity to acquire or
increase their proprietary interest in the Company through the acquisition of
shares of its Common Stock.  The Company
intends that Incentive Stock Options issued under the Plan will qualify as
"incentive stock options" as defined in Section 422 of the Code and
the terms of the Plan shall be interpreted in accordance with this
intention.  The terms "parent"
and "subsidiary" shall have the respective meanings set forth in
Section 424 of the Code.

Section 2. Administration

             2.1 The Committee.  The Plan shall be
administered by the Compensation Committee of the Board of Directors (the
"Board") or another committee consisting of at least two members of
the Company's Board (in either case, the "Committee").  None of the members of the Committee shall
be an officer or other employee of the Company.  It is the intention of the Company that the members of the
Committee shall each be a "Non-Employee Director" within the meaning
of Rule 16b-3 under the Securities Exchange Act of 1934 and an "Outside
Director ” (as such term is defined below), but the authority and validity of
any act taken or not taken by the Committee shall not be affected if any person
administering the Plan is not a "Non-Employee Director" or
"outside director."  Except as
specifically reserved to the Board under the terms of the Plan, the Committee
shall have full and final authority to operate, manage and administer the Plan
on behalf of the Company.  Action by the
Committee shall require the affirmative vote of a majority of all members
thereof.  The term “Outside Director” as
used in the Plan (1) shall mean a director who (i) is not an employee of
the Company or of any “affiliated group,” as such term is defined in
Section 1504(a) of the Code, which includes the Company (an “Affiliate”),
(ii) is not a former employee of the Company or any Affiliate who is receiving
compensation for prior services (other than benefits under a tax-qualified
retirement plan) during the Company’s or any Affiliate’s taxable year, (iii)
has not been an officer of the Company or any Affiliate and (iv) does not
receive remuneration from the Company or any Affiliate, either directly or
indirectly, in any capacity other than as a director, and (2) shall be
determined, and amended where necessary, in accordance with Section 162(m)
of the Code and the Treasury regulations issued thereunder.

             2.2 Powers of the
Committee.  Subject to the
terms and conditions of the Plan, the Committee shall have the power:

             (a)         To
determine from time to time the persons eligible to receive options and the
options to be granted to such persons under the Plan and to prescribe the
terms, conditions, restrictions, if any, and provisions (which need not be
identical) of each option granted under the Plan to such persons;

             (b)        To
construe and interpret the Plan and options granted thereunder and to
establish, amend, and revoke rules and regulations for administration of the
Plan.  In this connection, the Committee
may correct any defect or supply any omission, or reconcile any inconsistency
in the Plan, or in any option agreement, in the manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective.  All decisions and determinations by the
Committee in the exercise of this power shall be final and binding upon the
Company and optionees;

             (c)         To
make, in its sole discretion, changes to any outstanding option granted under
the Plan, including:

                           (i)             to accelerate the vesting schedule;
or

                           (ii)             to extend the expiration date;

provided, however, that the
Committee shall not have the power to reprice any options issued under the
Plan, whether by reducing their exercise price or canceling them and issuing
replacement options in their stead.

             (d)             Generally,
to exercise such powers and to perform such acts as are deemed necessary or
expedient to promote the best interests of the Company with respect to the
Plan.

Section 3. Stock

             3.1 Stock to be
Issued.  The stock
subject to the options granted under the Plan shall be shares of the Company's
authorized but unissued common stock, $.01 par value (the "Common
Stock"), or shares of the Company's Common Stock held in treasury.  The total number of shares that may be
issued pursuant to options granted under the Plan shall not exceed an aggregate
of 1,000,000 shares of Common Stock; provided,
however, that the class and aggregate number of shares which may be subject to
options granted under the Plan shall be subject to adjustment as provided in
Section 8 hereof.

             3.2 Expiration,
Cancellation or Termination of Option.  Whenever any
outstanding option under the Plan expires, is cancelled or is otherwise
terminated (other than by exercise), the shares of Common Stock allocable to the
unexercised portion of such option may again be the subject of options under
the Plan.

             3.3 Limitation on
Grants.  In no event may
any person be granted options under the Plan in any calendar year to purchase
more than 250,000 shares of Common Stock. 
The number of shares of Common Stock issuable pursuant to an option
granted under the Plan that is subsequently forfeited, cancelled or otherwise
terminated shall continue to count toward the foregoing limitation in the
calendar year of grant.

Section 4. Eligibility

             4.1 Persons Eligible.  Incentive Stock
Options under the Plan may be granted only to officers and other employees of
the Company or any parent or subsidiary of the Company.  Non-Statutory Options may be granted to
officers or other employees of the Company or any parent or subsidiary of the
Company, and to members of the Board and consultants or other persons who
render services to the Company or any such parent or subsidiary (regardless of
whether they are also employees), provided,
however, that options may be granted to members of the Board who are not
employees of the Company or any such parent or subsidiary ("Eligible
Directors") only as provided in Section 4.4.

             4.2 Greater-Than-Ten-Percent
Stockholders.  Except as may
otherwise be permitted by the Code or other applicable law or regulation, no
Incentive Stock Option shall be granted to an individual who, at the time the
option is granted, owns (including ownership attributed pursuant to Section 425
of the Code) more than ten percent of the total combined voting power of all
classes of stock of the Company or any parent or subsidiary (a
"greater-than-ten-percent stockholder"), unless such Incentive Stock
Option provides that (i) the purchase price per share shall not be less than one
hundred ten percent of the fair market value of the Common Stock at the time
such option is granted, and (ii) that such option shall not be exercisable to
any extent after the expiration of five years from the date it is granted.

             4.3 Maximum Aggregate
Fair Market Value.  The aggregate fair
market value (determined at the time the option is granted) of the Common Stock
with respect to which Incentive Stock Options are exercisable for the first
time by any optionee during any calendar year (under the Plan and any other
plans of the Company or any parent or subsidiary for the issuance of incentive
stock options) shall not exceed $100,000 (or such greater amount as may from
time to time be permitted with respect to incentive stock options by the Code
or any other applicable law or regulation).

             4.4 Option Grants to Eligible Directors.

             (a)             Relation
to Prior Plans.  After the
date of the meeting of stockholders at which this Plan is approved, the
provisions of this Section 4.4 shall supersede those of Section 4.4 of the Company’s
Amended and Restated 1993 Incentive and Non-Qualified Stock Option Plan.

             (b)             Grant
of Options.

                           (i)             On the date each new Eligible
Director first joins the Board, such Eligible Director shall automatically be
granted a Non-Statutory Option to purchase 20,000 shares of Common Stock.  Such Non-Statutory Option shall be
immediately vested in full unless otherwise determined by the Committee prior
to the grant of such Non-Statutory Option.

                           (ii)             On the date of each annual meeting
of the Company's stockholders or special meeting in lieu thereof, each Eligible
Director who has served for at least six months and continues to serve at that
meeting shall automatically be granted a Non-Statutory Option to purchase 7,500
shares of Common Stock.  Such Non-Statutory
Option shall be immediately vested in full.

             (c)             Purchase Price.  The purchase price per share of Common Stock under each
Non-Statutory Option granted pursuant to this Section 4.4 shall be equal to the
fair market value of the Common Stock on the date the Non-Statutory Option is
granted, such fair market value to be determined in accordance with the
provisions of Section 6.3.

             (d)             Expiration.  Each
Non-Statutory Option granted to an Eligible Director under this Section 4.4
shall expire on the tenth anniversary of the date of grant.

Section 5. Termination of Employment or Death of Optionee

             5.1 Termination of
Employment.  Except as may
be otherwise expressly provided herein, options shall terminate on the earlier
of:

             (a)             the
date of expiration thereof;

             (b)             immediately
upon the termination of the optionee's employment with or performance of
services for the Company (or any parent or subsidiary of the Company) by the
Company (or any such parent or subsidiary) for cause (as determined by the
Company or such parent or subsidiary); or

             (c)             thirty
days after the date of termination of the optionee's employment with or
performance of services for the Company (or any parent or subsidiary of the
Company) by the Company (or any such parent or subsidiary) without cause or
voluntarily by the optionee;

provided, that
Non-Statutory Options granted to persons who are not employees of the Company
(or any parent or subsidiary of the Company) need not, unless the Committee
determines otherwise, be subject to the provisions set forth in clauses (b) and
(c) above.

             An employment relationship between
the Company (or any parent or subsidiary of the Company) and the optionee shall
be deemed to exist during any period in which the optionee is employed by the
Company (or any such parent or subsidiary). 
Whether authorized leave of absence, or absence on military or
government service, shall constitute termination of the employment relationship
between the Company (or any parent or subsidiary of the Company) and the
optionee shall be determined by the Committee at the time thereof.  As used herein, "cause" shall mean
(x) any material breach by the optionee of any agreement to which the optionee
and the Company (or any parent or subsidiary of the Company) are both parties,
(y) any act or omission to act by the optionee which may have a material and
adverse effect on the business of the Company (or any such parent or
subsidiary) or on the optionee's ability to perform services for the Company
(or any such parent or subsidiary), including, without limitation, the
commission of any crime (other than ordinary traffic violations), or (z) any
material misconduct or material neglect of duties by the optionee in connection
with the business or affairs of the Company (or any such parent or subsidiary)
or any affiliate of the Company (or any such parent or subsidiary).

             5.2 Death or
Retirement of Optionee.  In the event of the
death of the holder of an option that is subject to clause (b) or (c) of
Section 5.1 above prior to termination of the optionee's employment with or
performance of services for the Company (or any parent or subsidiary of the
Company) and before the date of expiration of such option, such option shall
terminate on the earlier of such date of expiration or one year following the
date of such death.  After the death of
the optionee, his executors, administrators or any person or persons to whom
his option may be transferred by will or by the laws of descent and
distribution, shall have the right, at any time prior to such termination, to
exercise the option to the extent the optionee was entitled to exercise such
option at the time of his death.

             If, before the date of the
expiration of an option that is subject to clause (b) or (c) of Section 5.1
above, the optionee shall be retired in good standing from the Company for
reasons of age or disability under the then established rules of the Company,
the option shall terminate on the earlier of such date of expiration or ninety
(90) days after the date of such retirement. 
In the event of such retirement, the optionee shall have the right prior
to the termination of such option to exercise the option to the extent to which
he was entitled to exercise such option immediately prior to such retirement.

Section 6. Terms of the Option Agreements

             Each option agreement shall be in
writing and shall contain such terms, conditions, restrictions, if any, and
provisions as the Committee shall from time to time deem appropriate.  Such provisions or conditions may include
without limitation restrictions on transfer, repurchase rights, or such other
provisions as shall be determined by the Committee; provided that such
additional provisions shall not be inconsistent with any other term or
condition of the Plan and such additional provisions shall not cause any
Incentive Stock Option granted under the Plan to fail to qualify as an
incentive option within the meaning of Section 422 of the Code.  The shares of stock issuable upon exercise
of an option by any executive officer, director or beneficial owner of more
than ten percent of the Common Stock of the Company may not be sold or
transferred (except that such shares may be issued upon exercise of such
option) by such officer, director or beneficial owner for a period of six
months following the grant of such option.

             Option agreements need not be
identical, but each option agreement by appropriate language shall include the
substance of all of the following provisions:

             6.1 Expiration of Option.  Notwithstanding any
other provision of the Plan or of any option agreement, each option shall
expire on the date specified in the option agreement, which date shall not, in
the case of an Incentive Stock Option, be later than the tenth anniversary
(fifth anniversary in the case of a greater-than-ten-percent stockholder) of
the date on which the option was granted, or as specified in Section 5 of this
Plan.

             6.2 Exercise.  Each option may be
exercised, so long as it is valid and outstanding, from time to time in part or
as a whole, subject to any limitations with respect to the number of shares for
which the option may be exercised at a particular time and to such other
conditions as the Committee in its discretion may specify upon granting the
option.

             6.3 Purchase Price.  The purchase
price per share under  each option shall
be determined by the Committee at the time the option is granted; provided,
however, that the option price of any option shall not, unless otherwise
permitted by the Code or other applicable law or regulation, be less than the
fair market value of the Common Stock on the date the option is granted (110%
of the fair market value in the case of the grant of an Incentive Stock Option
to a greater-than-ten-percent stockholder). 
For the purpose of the Plan the fair market value of the Common Stock
shall be the closing price per share on the date of grant of the option as
reported by a nationally recognized stock exchange, or, if the Common Stock is
not listed on such an exchange, as reported by the National Association of
Securities Dealers Automated Quotation System ("Nasdaq") National
Market System or, if the Common Stock is not listed on the Nasdaq National
Market System, the mean of the bid and asked prices per share on the date of
grant of the option or, if the Common Stock is not traded over the counter, the
fair market value as determined by the Committee.

             6.4 Transferability
of Options.  Options shall
not be transferable by the optionee otherwise than by will or under the laws of
descent and distribution, and shall be exercisable, during his lifetime, only
by him/her.

             6.5 Rights of Optionees. No optionee shall be deemed for any purpose
to be the owner of any shares of Common Stock subject to any option unless and
until the option shall have been exercised pursuant to the terms thereof, and
the Company shall have issued and delivered the shares to the optionee.

             6.6 Repurchase Right.  The Committee may in
its discretion provide upon the grant of any option hereunder that the Company
shall have an option to repurchase upon such terms and conditions as determined
by the Committee all or any number of shares purchased upon exercise of such
option.  The repurchase price per share
payable by the Company shall be such amount or be determined by such formula as
is fixed by the Committee at the time the option for the shares subject to
repurchase is granted.  In the event the
Committee shall grant options subject to the Company's repurchase option, the
certificates representing the shares purchased pursuant to such option shall
carry a legend satisfactory to counsel for the Company referring to the
Company's repurchase option.

             6.7 "Lockup" Agreement.  The Committee may in
its discretion specify upon granting an option that the optionee shall agree
for a period of time (not to exceed 180 days) from the effective date of any
registration of securities of the Company (upon request of the Company or the
underwriters managing any underwritten offering of the Company's securities),
not to sell, make any short sale of, loan, grant any option for the purchase
of, or otherwise dispose of any shares issued pursuant to the exercise of such
option, without the prior written consent of the Company or such underwriters,
as the case may be.

Section 7. Method of Exercise, Payment of Purchase Price

             7.1 Method of Exercise.  Any option granted
under the Plan may be exercised by the optionee by delivering to the Company on
any business day a written notice specifying the number of shares of Common
Stock the optionee then desires to purchase and specifying the address to which
the certificates for such shares are to be mailed (the "Notice"),
accompanied by payment for such shares.

             7.2 Payment of Purchase Price.  Payment for the shares
of Common Stock purchased pursuant to the exercise of an option shall be made
by one or more of the following methods: (i) in cash, by certified or bank
check or other instrument acceptable to the Committee; (ii) by the optionee
delivering to the Company a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Company cash or
a check payable and acceptable to the Company to pay the purchase price; provided
that in the event the optionee chooses to pay the purchase price as so
provided, the optionee and the broker shall comply with such procedures and
enter into such agreements of indemnity and other agreements as the Committee
shall prescribe as a condition of such payment procedure; and provided
further that the Company need not act upon such exercise notice
until the Company receives full payment of the exercise price; or (iii) by any
other means (including, without limitation, by delivery of a promissory note of
the optionee payable on such terms as are specified by the Committee; provided,
however, that the interest rate borne by such note shall not be less than the
lowest applicable federal rate, as defined in Section 1247(d) of the Code)
which the Committee determines are consistent with the purpose of the Plan and
with applicable laws and regulations. 
As promptly as practicable after receipt of the Notice and accompanying
payment, the Company shall deliver to the optionee certificates for the number
of shares with respect to which such option has been so exercised, issued in
the optionee's name; provided, however, that such delivery
shall be deemed effected for all purposes when the Company or a stock transfer
agent of the Company shall have deposited such certificates in the United
States mail, addressed to the optionee, at the address specified in the Notice.

Section 8. Changes in Company’s Capital Structure

             8.1 Rights of Company.  The existence of
outstanding options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize, without limitation, any or
all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of Common Stock, or any issue of bonds, debentures,
preferred or prior preference stock or other capital stock ahead of or
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any  sale
or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.

             8.2 Recapitalization,
Stock Splits and Dividends.  If the Company
shall effect a subdivision or consolidation of shares or other capital
readjustment, the payment of a stock dividend, or other increase or reduction
of the number of shares of the Common Stock outstanding, in any such case
without receiving compensation therefor in money, services or property, then
(i) the number, class, and price per share of shares of stock subject to
outstanding options hereunder shall automatically be appropriately adjusted in
such a manner as to entitle an optionee to receive upon exercise of an option,
for the same aggregate cash consideration, the same total number and class of
shares as he would have received as a result of the event requiring the adjustment
had he exercised his option in full immediately prior to such event; and (ii)
the number and class of shares set forth in Sections 3.1, 3.3 and 4.4 shall be
adjusted by substituting therefor that number and class of shares of stock that
the owner of an equal number of outstanding shares of Common Stock would own as
the result of the event requiring the adjustment.

             8.3 Merger without
Change of Control.  After a merger of one
or more corporations into the Company, or after a consolidation of the Company
and one or more corporations in which (i) the Company shall be the surviving
corporation, and (ii) the stockholders of the Company immediately prior to such
merger or consolidation own after such merger or consolidation shares
representing at least fifty percent of the voting power of the Company, each
holder of an outstanding option shall, at no additional cost, be entitled upon
exercise of such option to receive in lieu of the number of shares as to which
such option shall then be so exercisable, the number and class of shares of
stock or other securities to which such holder would have been entitled
pursuant to the terms of the agreement of merger or consolidation if,
immediately prior to such merger or consolidation, such holder had been the
holder of record of a number of shares of Common Stock equal to the number of
shares for which such option was exercisable.

             8.4 Sale or Merger
with Change of Control.  If the Company is
merged into or consolidated with another corporation under circumstances where
the Company is not the surviving corporation, or if there is a merger or
consolidation where the Company is the surviving corporation but the
stockholders of the Company immediately prior to such merger or consolidation
do not own after such merger or consolidation shares representing at least
fifty percent of the voting power of the Company, or if the Company is
liquidated, or sells or otherwise disposes of substantially all of its assets
to another corporation while unexercised options remain outstanding under the
Plan, (i) subject to the provisions of clause (iii) below, after the  effective date of such merger,
consolidation, liquidation, sale or disposition, as the case may be, each
holder of an outstanding option shall be entitled, upon exercise of such
option, to receive, in lieu of shares of Common Stock, shares of such stock or
other securities, cash or property as the holders of shares of Common Stock
received pursuant to the terms of the merger, consolidation, liquidation, sale
or disposition; (ii) the Committee may accelerate the time for exercise of all
unexercised and unexpired options to and after a date prior to the effective
date of such merger, consolidation, liquidation, sale or disposition, as the
case may be, specified by the Committee; or (iii) all outstanding options may
be cancelled by the Committee as of the effective date of any such merger,
consolidation, liquidation, sale or disposition, provided that (x) notice of
such cancellation shall be given to each holder of an option and (y) each
holder of an option shall have the right to exercise such option to the extent
that the same is then exercisable or, if the Committee shall have accelerated
the time for exercise of all unexercised and unexpired options, in full during
the 30-day period preceding the effective date of such merger, consolidation,
liquidation, sale or disposition.

             8.5 Adjustments to
Common Stock Subject to Options.  Except as
hereinbefore expressly provided, the issue by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, for
cash or property, or for labor or services, either upon direct sale or upon the
exercise of  rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock then subject to outstanding options.

             8.6 Miscellaneous.  Adjustments under this
Section 8 shall be determined by the Committee, and such determinations shall
be conclusive.  No fractional shares of
Common Stock shall be issued under the Plan on account of any adjustment
specified above.

Section 9. General Restriction

             9.1 Investment
Representations.  The Company may
require any person to whom an option is granted, as a condition of exercising
such option, to give written assurances in substance and form satisfactory to
the Company to the effect that such person is acquiring the Common Stock
subject to the option for his own account for investment and not with any
present intention of selling or otherwise distributing the same, and to such
other effects as the Company deems necessary or appropriate in order to comply
with federal and applicable state securities laws.

             9.2 Compliance with
Securities Laws.  The Company
shall not be required to sell or issue any shares under any option if the
issuance of such shares shall constitute a violation by the optionee or by the
Company of any provisions of any law or regulation of any governmental
authority.  In addition, in  connection with the Securities Act of 1933,
as now in effect or hereafter amended (the "Act"), upon exercise of
any option, the Company shall not be required to issue such shares unless the
Committee has received evidence satisfactory to it to the effect that the
holder of such option will not transfer such shares except pursuant to a
registration statement in effect under such Act or unless an opinion of counsel
satisfactory to the Company has been received by the Company to the effect that
such registration is not required.  Any
determination in this connection by the Committee shall be final, binding and
conclusive.  In the event the shares
issuable on exercise of an option are not registered under the Act, the Company
may imprint upon any certificate representing shares so issued the following
legend or any other legend which counsel for the Company considers necessary or
advisable to comply with the Act and with applicable state securities laws:

The shares of stock represented by this
certificate have not been registered under the Securities Act of 1933 or under
the securities laws of any State and may not be sold or transferred except upon
such registration or upon receipt by the Corporation of an opinion of counsel
satisfactory to the Corporation, in form and substance satisfactory to the
Corporation, that registration is not required for such sale or transfer.

             The Company may, but shall in no
event be obligated to, register any securities covered hereby pursuant to the
Act; and in the event any shares are so registered the Company may remove any
legend on certificates representing such shares.  The Company shall not be obligated to take any other affirmative
action in  order to cause the exercise
of an option or the issuance of shares pursuant thereto to comply with any law
or regulation of any governmental authority.

             9.3 Employment Obligation.  The granting of any
option shall not impose upon the Company (or any parent or subsidiary of the
Company) any obligation to employ or continue to employ any optionee; and the
right of the Company (or any such parent or subsidiary) to terminate the
employment of any officer or other employee shall not be diminished or affected
by reason of the fact that an option has been granted to him/her.

             9.4 Withholding Tax.  Whenever under the
Plan shares of Common Stock are to be delivered upon exercise of an option, the
Company shall be entitled to require as a condition of delivery that the
optionee remit an amount sufficient to satisfy all federal, state and other
governmental withholding tax requirements related thereto.

Section 10. Amendment or Termination of the Plan

             The Board of Directors may modify,
revise or terminate this Plan at any time and from time to time, except that
(i) the class of persons eligible to receive options and the aggregate number
of shares issuable pursuant to this Plan shall not be changed or increased,
other than by operation of Section 8 hereof, without the consent of the
stockholders of the Company, other than to comport with changes in the Code,
the Employee Retirement Income Security Act, or the rules thereunder.

Section 11. Nonexclusivity of the Plan

             Neither the adoption of the Plan by
the Board of Directors nor the submission of the Plan to the stockholders of
the Company for approval shall be construed as creating any limitations on the
power of the Board of Directors to adopt such other incentive arrangements as
it may deem desirable, including, without 
limitation, the granting of stock options otherwise than under the Plan,
and such arrangements may be either applicable generally or only in specific
cases.

Section 12. Effective Date and Duration of the Plan

             The Plan shall become effective
upon its adoption by the Board of Directors, provided that the
stockholders of the Company shall have approved the Plan within twelve months
prior to or following the adoption of the Plan by the Board.  No option may be granted under the Plan
after the tenth anniversary of the effective date.  The Plan shall terminate (i) when the total amount of Common
Stock with respect to which options may be granted shall have been issued upon
the exercise of options or (ii) by action of the Board of Directors pursuant to
Section 10 hereof, whichever shall first occur.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}]]