Document:

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                                                                     Exhibit 4.1

                       AMENDED AND RESTATED UROLOGIX, INC.
                             1991 STOCK OPTION PLAN

                       As Amended through November 6, 2001
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SECTION                        CONTENTS                                    PAGE
-------                        --------                                    ----

     1.       General Purpose of Plan; Definitions                            1

     2.       Administration                                                  3

     3.       Stock Subject to Plan                                           4

     4.       Eligibility                                                     5

     5.       Stock Options                                                   5

     6.       Stock Appreciation Rights                                      10

     7.       Restricted Stock                                               11

     8.       Deferred Stock Awards                                          13

     9.       Transfer, Leave of Absence, etc.                               14

     10.      Amendments and Termination                                     14

     11.      Unfunded Status of Plan                                        15

     12.      General Provisions                                             15
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                       AMENDED AND RESTATED UROLOGIX, INC.
                             1991 STOCK OPTION PLAN

     SECTION 1. General Purpose of Plan; Definitions.

     The name of this plan is the Amended and Restated Urologix, Inc. 1991 Stock
Option Plan (the "Plan"). The purpose of the Plan is to enable Urologix, Inc.
(the "Company") to retain and attract executives and other key employees,
directors and consultants who contribute to the Company's success by their
ability, ingenuity and industry, and to enable such individuals to participate
in the long-term success and growth of the Company by giving them a proprietary
interest in the Company.

     For purposes of the Plan, the following terms shall be defined as set forth
below:

     a.   "Board" means the Board of Directors of the Company as it may be
          comprised from time to time.

     b.   "Cause" means a felony conviction of a participant or the failure of a
          participant to contest prosecution for a felony, willful misconduct,
          dishonesty or intentional violation of a statute, rule or regulation,
          any of which, in the judgment of the Company, is harmful to the
          business or reputation of the Company.

     c.   "Code" means the Internal Revenue Code of 1986, as amended from time
          to time, or any successor statute.

     d.   "Committee" means the Committee referred to in Section 2 of the Plan.

     e.   "Consultant" means any person, including an advisor, engaged by the
          Company or a Parent Corporation or Subsidiary of the Company to render
          services and who is compensated for such services and who is not an
          employee of the Company or any Parent Corporation or Subsidiary of the
          Company. A Non-Employee Director may serve as a Consultant.

     f.   "Company" means Urologix, Inc., a corporation organized under the laws
          of the State of Minnesota (or any successor corporation).

     g.   "Deferred Stock" means an award made pursuant to Section 8 below of
          the right to receive stock at the end of a specified deferral period.

     h.   "Disability" means permanent and total disability as determined by the
          Committee.

     i.   "Early Retirement" means retirement, with consent of the Committee at
          the time of retirement, from active employment with the Company and
          any Subsidiary or Parent Corporation of the Company.

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     j.   "Fair Market Value" of Stock on any given date shall be determined by
          the Committee as follows: (a) if the Stock is listed for trading on
          one of more national securities exchanges, or is traded on the Nasdaq
          Stock Market, the last reported sales price on the principal such
          exchange or the Nasdaq Stock Market on the date in question, or if
          such Stock shall not have been traded on such principal exchange on
          such date, the last reported sales price on such principal exchange or
          the Nasdaq Stock Market on the first day prior thereto on which such
          Stock was so traded; or (b) if the Stock is not listed for trading on
          a national securities exchange or the Nasdaq Stock Market, but is
          traded in the over-the-counter market, including the Nasdaq Small Cap
          Market, the closing bid price for such Stock on the date in question,
          or if there is no such bid price for such Stock on such date, the
          closing bid price on the first day prior thereto on which such price
          existed; or (c) if neither (a) or (b) is applicable, by any means fair
          and reasonable by the Committee, which determination shall be final
          and binding on all parties.

     k.   "Incentive Stock Option" means any Stock Option intended to be and
          designated as an "Incentive Stock Option" within the meaning of
          Section 422 of the Code.

     l.   "Non-Employee Director" means a "Non-Employee Director" within the
          meaning of Rule 16b-3(b)(3) under the Securities Exchange Act of 1934.

     m.   "Non-Qualified Stock Option" means any Stock Option that is not an
          Incentive Stock Option, and is intended to be and is designated as a
          "Non-Qualified Stock Option."

     n.   "Normal Retirement" means retirement from active employment with the
          Company and any Subsidiary or Parent Corporation of the Company on or
          after age 65.

     o.   "Outside Director" means a member of the Board of Directors who: (a)
          is not a current employee of the Company or any member of an
          affiliated group which includes the Company; (b) is not a former
          employee of the Company who receives compensation for prior services
          (other than benefits under a tax-qualified retirement plan) during the
          taxable year; (c) has not been an officer of the Company; and (d) does
          not receive remuneration from the Company, either directly or
          indirectly, in any capacity other than as a director, except as
          otherwise permitted under Code Section 162(m) and regulations
          thereunder. For this purpose, remuneration includes any payment in
          exchange for goods or services. This definition shall be further
          governed by the provisions of Code Section 162(m) and regulations
          promulgated thereunder.

     p.   "Parent Corporation" means any corporation (other than the Company) in
          an unbroken chain of corporations ending with the Company if each of
          the corporations (other than the Company) owns stock possessing 50% or
          more of the total combined voting power of all classes of stock in one
          of the other corporations in the chain.

     q.   "Restricted Stock" means an award of shares of Stock that are subject
          to restrictions under Section 7 below.

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     r.   "Retirement" means Normal Retirement or Early Retirement.

     s.   "Stock" means the Common Stock of the Company.

     t.   "Stock Appreciation Right" means the right pursuant to an award
          granted under Section 6 below to surrender to the Company all or a
          portion of a Stock Option in exchange for an amount equal to the
          difference between (i) Fair Market Value, as of the date such Stock
          Option or such portion thereof is surrendered, of the shares of Stock
          covered by such Stock Option or such portion thereof, and (ii) the
          aggregate exercise price of such Stock Option or such portion thereof.

     u.   "Stock Option" means any option to purchase shares of Stock granted
          pursuant to Section 5 below.

     v.   "Subsidiary" means any corporation (other than the Company) in an
          unbroken chain of corporations beginning with the Company if each of
          the corporations (other than the last corporation in the unbroken
          chain) owns stock possessing 50% or more of the total combined voting
          power of all classes of stock in one of the other corporations in the
          chain.

     SECTION 2. Administration.

     The Plan shall be administered by the Board of Directors or by a committee,
consisting of not less than two members of the Board of Directors, all of whom
shall be Outside Directors and Non-Employee Directors and who shall serve at the
pleasure of the Board (the "Committee"). Any or all of the functions of the
Committee specified in the Plan may be exercised by the Board, unless the Plan
specifically states otherwise.

     The Committee shall have the power and authority to grant to eligible
employees, members of the Board of Directors or Consultants, pursuant to the
terms of the Plan: (i) Stock Options, (ii) Stock Appreciation Rights, (iii)
Restricted Stock, or (iv) Deferred Stock awards.

     In particular, the Committee shall have the authority:

     (i)  to select the officers and other key employees of the Company and its
          Subsidiaries and other eligible persons to whom Stock Options, Stock
          Appreciation Rights, Restricted Stock and Deferred Stock awards may
          from time to time be granted hereunder;

     (ii) to determine whether and to what extent Incentive Stock Options,
          Non-Qualified Stock Options, Stock Appreciation Rights, Restricted
          Stock and Deferred Stock awards, or a combination of the foregoing,
          are to be granted hereunder;

     (iii) to determine the number of shares to be covered by each such award
          granted hereunder;

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     (iv) to determine the terms and conditions, not inconsistent with the terms
          of the Plan, of any award granted hereunder (including, but not
          limited to, any restriction on any Stock Option or other award and/or
          the shares of Stock relating thereto); provided, however, that in the
          event of a merger or asset sale or other form of change of control,
          the applicable provisions of Sections 5(c) and 7(c) of the Plan shall
          govern the acceleration of the vesting of any Stock option or awards;

     (v)  to determine whether, to what extent and under what circumstances
          Stock and other amounts payable with respect to an award under this
          Plan shall be deferred either automatically or at the election of the
          participant.

     The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the terms and provisions of the
Plan and any award issued under the Plan (and any agreements relating thereto);
and to otherwise supervise the administration of the Plan. The Committee may
delegate to executive officers of the Company the authority to exercise the
powers specified in (i), (ii), (iii), (iv) and (v) above with respect to persons
who are not executive officers of the Company.

     All decisions made by the Committee pursuant to the provisions of the Plan
shall be final and binding on all persons, including the Company and Plan
participants.

     SECTION 3. Stock Subject to Plan.

     The total number of shares of Stock reserved and available for distribution
under the Plan shall be 3,450,910/1/. Such shares may consist, in whole or in
part, of authorized and unissued shares.

     Subject to paragraph (b)(iv) of Section 6 below, if any shares that have
been optioned cease to be subject to Stock Options, or if any shares subject to
any Restricted Stock or Deferred Stock award granted hereunder are forfeited or
such award otherwise terminates without a payment

--------
     (1) History: This Plan originally reserved 970,912 shares for issuance. The
Board of Directors approved an increase from 970,912 shares to 1,250,912 on
January 19, 1994, and an increase from 1,250,912 shares to 1,601,820 shares on
August 19, 1994. The shareholders approved the increase to 1,601,820 shares at a
special meeting on December 21, 1994. The Board of Directors approved an
increase from 1,601,820 shares to 2,101,820 shares on July 26, 1995, which was
approved by the Shareholders at a special meeting on November 27, 1995. The
number of shares reserved under the Plan was again increased from 2,101,820 to
3,101,820 by the Board of Directors on April 3, 1996 and such increase was
approved by the Shareholders at a special meeting on April 30, 1996.
Simultaneously on April 30, 1996, the Company effected a 1-for-2 Reverse Stock
Split, thereby converting the number of shares reserved to 1,550,910 as of April
30, 1996. Following the Reverse Stock Split, the Board of Directors increased
the number of shares reserved to 1,950,910 on September 17, 1997 and the
increase was approved by the shareholders on November 19, 1997. On November 17,
1998, the Board of Directors authorized an increase in the number of shares
reserved to 2,450,910, which increase was approved by the shareholders on
January 14, 1999. On September 12, 2000 the Board of Directors authorized an
increase in the number of shares reserved to 2, 950,910, which increase was
approved by the shareholders on November 14, 2000. On September 11, 2001 the
Board of Directors authorized an increase in the number of shares reserved to
3,450,910, which increase was approved by the shareholders on November 6, 2001.

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being made to the participant, such shares shall again be available for
distribution in connection with future awards under the Plan.

     In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, other change in corporate structure affecting
the Stock, or spin-off or other distribution of assets to shareholders, such
substitution or adjustment shall be made in the aggregate number of shares
reserved for issuance under the Plan, in the number and option price of shares
subject to outstanding options granted under the Plan, and in the number of
shares subject to Restricted Stock or Deferred Stock awards granted under the
Plan as may be determined to be appropriate by the Committee, in its sole
discretion, provided that the number of shares subject to any award shall always
be a whole number. Such adjusted option price shall also be used to determine
the amount payable by the Company upon the exercise of any Stock Appreciation
Right associated with any Option.

     SECTION 4. Eligibility.

     Officers, other key employees of the Company and Subsidiaries, members of
the Board of Directors, and Consultants who are responsible for or contribute to
the management, growth and profitability of the business of the Company and its
Subsidiaries are eligible to be granted Stock Options, Stock Appreciation
Rights, Restricted Stock or Deferred Stock awards under the Plan. The optionees
and participants under the Plan shall be selected from time to time by the
Committee, in its sole discretion, from among those eligible, and the Committee
shall determine, in its sole discretion, the number of shares covered by each
award.

     Notwithstanding the foregoing, no person may, during any fiscal year of the
Company, receive grants of Stock Options and Stock Appreciation Rights under
this Plan which, in the aggregate, exceed 500,000 shares.

     SECTION 5. Stock Options.

     Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.

     The Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options and (ii) Non-Qualified Stock Options. No Incentive Stock Options
shall be granted under the Plan after August 1, 2011.

     The Committee shall have the authority to grant any optionee Incentive
Stock Options, Non-Qualified Stock Options, or both types of options (in each
case with or without Stock Appreciation Rights). To the extent that any option
does not qualify as an Incentive Stock Option, it shall constitute a separate
Non-Qualified Stock Option.

     Anything in the Plan to the contrary notwithstanding, no term of this Plan
relating to Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised, so
as to disqualify either the Plan or any Incentive Stock Option under Section 422
of the Code. The preceding sentence shall not

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preclude any modification or amendment to an outstanding Incentive Stock Option,
whether or not such modification or amendment results in disqualification of
such Option as an Incentive Stock Option, provided the optionee consents in
writing to the modification or amendment.

     No changes that result from the restatement of this Plan shall effect any
change in any outstanding incentive stock option that would cause such option to
be modified, extended or renewed to the extent that such change will constitute
the grant of a new option as specified in Section 424(h) of the Code.

     Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.

     (a) Option Price. The option price per share of Stock purchasable under a
Stock Option shall be determined by the Committee at the time of grant. In no
event shall the option price per share of Stock purchasable under an Incentive
Stock Option be less than 100% of such Fair Market Value. If an employee owns or
is deemed to own (by reason of the attribution rules applicable under Section
424(d) of the Code) more than 10% of the combined voting power of all classes of
stock of the Company or any Parent Corporation or Subsidiary and an Incentive
Stock Option is granted to such employee, the option price shall be no less than
110% of the Fair Market Value of the Stock on the date the option is granted.

     (b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten
years after the date the option is granted. If an employee owns or is deemed to
own (by reason of the attribution rules of Section 424(d) of the Code) more than
10% of the combined voting power of all classes of stock of the Company or any
Parent Corporation or Subsidiary and an Incentive Stock Option is granted to
such employee, the term of such option shall be no more than five years from the
date of grant.

     (c) Exercisability. Stock Options shall be exercisable at such time or
times as determined by the Committee at or after grant. If the Committee
provides, in its discretion, that any option is exercisable only in
installments, the Committee may waive such installment exercise provisions at
any time. Notwithstanding anything contained in the Plan to the contrary, the
Committee may, in its discretion, extend or vary the term of any Stock Option or
any installment thereof, whether or not the optionee is then employed by the
Company, if such action is deemed to be in the best interests of the Company;
provided, however, that in the event of a merger or sale of assets, or of a
Change of Control, the provisions of this section 5(c) shall govern vesting
acceleration.

     (i)  In the event of a merger of the Company with or into another
          corporation, or the sale of substantially all of the assets of the
          Company, each outstanding Option shall be assumed or an equivalent
          option or right shall be substituted by the successor corporation or a
          Parent or Subsidiary of the successor corporation. In the event that
          the successor corporation does not agree to assume the Option or to
          substitute an equivalent option or right, the Committee shall, in lieu
          of such assumption or substitution, provide for the Optionee to have
          the right to exercise the Option as to all of the Optioned Stock,
          including shares as to which it would not otherwise be

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          exercisable. If the Committee makes an Option fully exercisable in
          lieu of assumption or substitution in the event of a merger or sale of
          assets, the Committee shall notify the Optionee that the Option shall
          be fully exercisable for a period of fifteen (15) days from the date
          of such notice, and the Option will terminate upon the expiration of
          such period. For the purposes of this paragraph, the Option shall be
          considered assumed if, following the merger or sale of assets, the
          option or right confers the right to purchase, for each Share of
          Optioned Stock subject to the Option immediately prior to the merger
          or sale of assets, the consideration (whether stock, cash, or other
          securities or property) received in the merger or sale of assets by
          holders of Common Stock for each Share held on the effective date of
          the transaction (and if holders were offered a choice of
          consideration, the type of consideration chose by the holders of a
          majority of the outstanding Shares); provided, however, that if such
          consideration received in the merger or sale of assets was not solely
          common stock of the successor corporation or its Parent, the Committee
          may, with consent of the successor corporation and the participant,
          provide for the consideration to be received upon the exercise of the
          Option, for each Share of Optioned Stock subject to the Option, to be
          solely common stock of the successor corporation or its Parent equal
          in Fair Market Value to the per share consideration received by
          holders of Common Stock in the merger or sale of assets.

     (ii) Upon a Change of Control, each outstanding Stock Option shall become
          exercisable in full as to all of the shares covered thereby without
          regard to any installment exercise or vesting provisions. In the event
          that at any time prior to August 13, 1999, a Change of Control or
          other business combination of the Company occurs as to which the
          Company desires that pooling accounting treatment be utilized, the
          Board may, in its sole discretion, declare that the provisions of this
          Section 5(c)(ii), and the related provisions of all then outstanding
          Stock Options shall be of no force and effect whatsoever and the
          treatment of any Stock Options outstanding at that time shall then
          instead be governed solely by the provisions of Section 5(c)(i). After
          August 13, 1999, the provisions of Section 5(c)(i) shall be of no
          further force or effect. This Section 5(c)(ii) will apply to all Stock
          Options which are outstanding on August 13, 1997, as well as all Stock
          Options which are granted on or after that date. For purposes of this
          Section 5(c), the term "Change of Control" means any of the following:

          (A)  any "person" (as such term is used in Sections 13(d) and 14(d) of
               the Exchange Act) becomes a "beneficial owner" (as defined in
               Rule 13d-3 under the Exchange Act), directly or indirectly, of
               securities of the Company representing 50% or more of the
               combined voting power of the Company's then outstanding
               securities and is required to file a Schedule 13D under the
               Exchange Act; or

          (B)  the Incumbent Directors cease for any reason to constitute at
               least a majority of the Board of Directors. The term, "Incumbent
               Directors," shall mean those individuals who are members of the
               Board of Directors on August 13, 1997 and any individual who
               subsequently becomes a member of the Board of

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               Directors whose election or nomination for election by the
               Company's shareholders was approved by a vote of at least a
               majority of the then Incumbent Directors; or

          (C)  all or substantially all of the assets of the Company are sold,
               leased, exchanged or otherwise transferred and immediately
               thereafter, there is no substantial continuity of ownership with
               respect to the Company and the entity to which such assets have
               been transferred.

    (iii) The grant of an option pursuant to the Plan shall not limit in any
          way the right or power of the Company to make adjustments,
          reclassifications, reorganizations or changes of its capital or
          business structure or to merge, exchange or consolidate or to
          dissolve, liquidate, sell or transfer all or any part of its business
          or assets.

     (d) Method of Exercise. Stock Options may be exercised in whole or in part
at any time during the option period by giving written notice of exercise to the
Company specifying the number of shares to be purchased. Such notice shall be
accompanied by payment in full of the purchase price, either by check, or by any
other form of legal consideration deemed sufficient by the Committee and
consistent with the Plan's purpose and applicable law, including promissory
notes or a properly executed exercise notice together with irrevocable
instructions to a broker acceptable to the Company to promptly deliver to the
Company the amount of sale or loan proceeds to pay the exercise price. As
determined by the Committee at the time of grant or exercise, in its sole
discretion, payment in full or in part may also be made in the form of Stock
already owned by the optionee (which in the case of Stock acquired upon exercise
of an option have been owned for more than six months on the date of surrender)
or, in the case of the exercise of a Non-Qualified Stock Option, by delivery of
Restricted Stock or Deferred Stock subject to an award hereunder (based, in each
case, on the Fair Market Value of the Stock on the date the option is exercised,
as determined by the Committee), provided, however, that, in the case of an
Incentive Stock Option, the right to make a payment in the form of already owned
shares may be authorized only at the time the option is granted, and provided
further that in the event payment is made in the form of shares of Restricted
Stock or a Deferred Stock award, the optionee will receive a portion of the
option shares in the form of, and in an amount equal to, the Restricted Stock or
Deferred Stock award tendered as payment by the optionee. If the terms of an
option so permit, an optionee may elect to pay all or part of the option
exercise price by having the Company withhold from the shares of Stock that
would otherwise be issued upon exercise that number of shares of Stock having a
Fair Market Value equal to the aggregate option exercise price for the shares
with respect to which such election is made. No shares of Stock shall be issued
until full payment therefor has been made. An optionee shall generally have the
rights to dividends and other rights of a shareholder with respect to shares
subject to the option when the optionee has given written notice of exercise,
has paid in full for such shares, and, if requested, has given the
representation described in paragraph (a) of Section 12.

     (e) Non-transferability of Options. No Stock Option shall be transferable
by the optionee otherwise than by will or by the laws of descent and
distribution, and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee.

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     (f) Termination by Death. If an optionee's employment by the Company and
any Subsidiary or Parent Corporation terminates by reason of death, the Stock
Option may thereafter be immediately exercised, to the extent then exercisable,
by the legal representative of the estate or by the legatee of the optionee
under the will of the optionee, for a period of twelve months from the date of
such death or until the expiration of the stated term of the option, whichever
period is shorter.

     (g) Termination by Reason of Disability. If an optionee's employment by the
Company and any Subsidiary or Parent Corporation terminates by reason of
Disability, any Stock Option held by such optionee may thereafter be exercised,
to the extent it was exercisable at the time of termination due to Disability,
but may not be exercised after twelve months from the date of such termination
of employment or the expiration of the stated term of the option, whichever
period is the shorter. In the event of termination of employment by reason of
Disability, if an Incentive Stock Option is exercised after the expiration of
the exercise periods that apply for purposes of Section 422 of the Code, the
option will thereafter be treated as a Non-Qualified Stock Option.

     (h) Termination by Reason of Retirement. If an optionee's employment by the
Company and any Subsidiary or Parent Corporation terminates by reason of
Retirement and the terms of the Stock Option so provide, any Stock Option held
by such optionee may thereafter be exercised to the extent it was exercisable at
the time of such Retirement, but may not be exercised after twelve months from
the date of such termination of employment or the expiration of the stated term
of the option, whichever period is the shorter. In the event of termination of
employment by reason of Retirement, if an Incentive Stock Option is exercised
after the expiration of the exercise periods that apply for purposes of Section
422 of the Code, the option will thereafter be treated as a Non-Qualified Stock
Option.

     (i) Other Termination. In the event an Optionee's continuous status as an
Employee or Consultant terminates (other than upon the Optionee's death or
Disability), the Optionee may exercise his or her Option, but only within such
period of time as is determined by the Committee, and only to the extent that
the Optionee was entitled to exercise it at the date of termination (but in no
event later than the expiration of the term of such Option as set forth in the
Notice of Grant). In the case of an Incentive Stock Option, the Committee shall
determine such period of time (in no event to exceed ninety (90) days from the
date of termination) when the Option is granted.

     (j) Annual Limit on Incentive Stock Options. The aggregate Fair Market
Value (determined as of the time the Stock Option is granted) of the Common
Stock with respect to which an Incentive Stock Option under this Plan or any
other plan of the Company and any Subsidiary or Parent Corporation is
exercisable for the first time by an optionee during any calendar year shall not
exceed $100,000.

     (k) Directors Who Are Not Employees. Each year on the date of the annual
meeting of shareholders, each person who is not an employee of the Company, any
Parent Corporation or Subsidiary and is serving as a member of the Board of
Directors of the Company immediately following such annual meeting, will
automatically, without any Committee action, be granted a Non-Qualified Stock
Option to purchase 10,000 shares of the Company's Common Stock at an

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option price per share equal to 100% of the Fair Market Value of a share of
Stock on such date. All such Options shall be designated as Non-Qualified Stock
Options and shall be subject to the same terms and provisions as are then in
effect with respect to the grant of Non-Qualified Stock Options to employees of
the Company, except that (i) the term of each such Option shall be equal to ten
years; and (ii) the Option shall immediately become exercisable in full at the
time of grant. Upon termination of a person's service as a Director of the
Company, such Director will be allowed to exercise such Option for a period of
one year after the date on which such person ceased to be a Director, after
which date the Option, if not exercised, shall terminate. The Committee may
elect to grant a similar Non-Qualified Stock Option, consisting of such number
of shares as the Committee deems appropriate under the circumstances, to any
person who is elected to the Board of Directors between annual meetings of
shareholders. Subject to the foregoing, all provisions of this Plan not
inconsistent with the foregoing shall apply to Options granted pursuant to this
Section 5(k).

     SECTION 6. Stock Appreciation Rights.

     (a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of the grant of such Option. In the case of an Incentive Stock
Option, such rights may be granted only at the time of the grant of the option.

     A Stock Appreciation Right or applicable portion thereof granted with
respect to a given Stock Option shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option, except that a
Stock Appreciation Right granted with respect to less than the full number of
shares covered by a related stock Option shall not be reduced until the exercise
or termination of the related Stock Option exceeds the number of shares not
covered by the Stock Appreciation Right.

     A Stock Appreciation Right may be exercised by an optionee, in accordance
with paragraph (b) of this Section 6, by surrendering the applicable portion of
the related Stock Option. Upon such exercise and surrender, the optionee shall
be entitled to receive an amount determined in the manner prescribed in
paragraph (b) of this Section 6. Stock Options which have been so surrendered,
in whole or in part, shall no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.

     (b) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, including the following:

          (i) Stock Appreciation Rights shall be exercisable only at such time
     or times and to the extent that the Stock Options to which they relate
     shall be exercisable in accordance with the provisions of Section 5 and
     this Section 6 of the Plan.

          (ii) Upon the exercise of a Stock Appreciation Right, an optionee
     shall be entitled to receive up to, but not more than, an amount in cash or
     shares of Stock equal in value to the

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     excess of the Fair Market Value of one share of Stock over the option price
     per share specified in the related option multiplied by the number of
     shares in respect of which the Stock Appreciation Right shall have been
     exercised, with the Committee having the right to determine the form of
     payment.

          (iii) Stock Appreciation Rights shall be transferable only when and to
     the extent that the underlying Stock Option would be transferable under
     Section 5 of the Plan.

          (iv) Upon the exercise of a Stock Appreciation Right, the Stock Option
     or part thereof to which such Stock Appreciation Right is related shall be
     deemed to have been exercised for the purpose of the limitation set forth
     in Section 3 of the Plan on the number of shares of Stock to be issued
     under the Plan, but only to the extent of the number of shares issued or
     issuable under the Stock Appreciation Right at the time of exercise based
     on the value of the Stock Appreciation Right at such time.

          (v) A Stock Appreciation Right granted in connection with an Incentive
     Stock Option may be exercised only if and when the market price of the
     Stock subject to the Incentive Stock Option exceeds the exercise price of
     such Option.

     SECTION 7. Restricted Stock.

     (a) Administration. Shares of Restricted Stock may be issued either alone
or in addition to other awards granted under the Plan. The Committee shall
determine the officers, key employees and Consultants of the Company and
Subsidiaries to whom, and the time or times at which, grants of Restricted Stock
will be made, the number of shares to be awarded, the time or times within which
such awards may be subject to forfeiture, and all other conditions of the
awards. The Committee may also condition the grant of Restricted Stock upon the
attainment of specified performance goals. The provisions of Restricted Stock
awards need not be the same with respect to each recipient.

     (b) Awards and Certificates. The prospective recipient of an award of
shares of Restricted Stock shall not have any rights with respect to such award,
unless and until such recipient has executed an agreement evidencing the award
and has delivered a fully executed copy thereof to the Company, and has
otherwise complied with the then applicable terms and conditions.

          (i) Each participant shall be issued a stock certificate in respect of
     shares of Restricted Stock awarded under the Plan. Such certificate shall
     be registered in the name of the participant, and shall bear an appropriate
     legend referring to the terms, conditions, and restrictions applicable to
     such award, substantially in the following form:

          "The transferability of this certificate and the shares of stock
          represented hereby are subject to the terms and conditions (including
          forfeiture) of the Amended and Restated Urologix, Inc. 1991 Stock Plan
          and an Agreement entered into between the registered owner and
          Urologix, Inc. Copies of

                                       11
<PAGE>

          such Plan and Agreement are on file in the offices of Urologix, Inc.,
          14405 21st Avenue North, Minneapolis, MN 55447."

          (ii) The Committee shall require that the stock certificates
     evidencing such shares be held in custody by the Company until the
     restrictions thereon shall have lapsed, and that, as a condition of any
     Restricted Stock award, the participant shall have delivered a stock power,
     endorsed in blank, relating to the Stock covered by such award.

     (c) Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to the Plan shall be subject to the following restrictions and
conditions:

          (i) Subject to the provisions of this Plan and the award agreement,
     during a period set by the Committee commencing with the date of such award
     (the "Restriction Period"), the participant shall not be permitted to sell,
     transfer, pledge or assign shares of Restricted Stock awarded under the
     Plan. In no event shall the Restriction Period be less than one (1) year.
     Within these limits, the Committee may provide for the lapse of such
     restrictions in installments where deemed appropriate.

          (ii) Except as provided in paragraph (c)(i) of this Section 7, the
     participant shall have, with respect to the shares of Restricted Stock, all
     of the rights of a shareholder of the Company, including the right to vote
     the shares and the right to receive any cash dividends. The Committee, in
     its sole discretion, may permit or require the payment of cash dividends to
     be deferred and, if the Committee so determines, reinvested in additional
     shares of Restricted Stock (to the extent shares are available under
     Section 3 and subject to paragraph (f) of Section 12). Certificates for
     shares of unrestricted Stock shall be delivered to the grantee promptly
     after, and only after, the period of forfeiture shall have expired without
     forfeiture in respect of such shares of Restricted Stock.

              (iii) Subject to the provisions of the award agreement and
     paragraph (c)(iv) of this Section 7, upon termination of employment for any
     reason during the Restriction Period, all shares still subject to
     restriction shall be forfeited by the participant.

          (iv) In the event of special hardship circumstances of a participant
     whose employment is terminated (other than for Cause), including death,
     Disability or Retirement, or in the event of an unforeseeable emergency of
     a participant still in service, the Committee may, in its sole discretion,
     when it finds that a waiver would be in the best interest of the Company,
     waive in whole or in part any or all remaining restrictions with respect to
     such participant's shares of Restricted Stock.

          (v) Notwithstanding the foregoing, in the event of the sale by the
     Company of substantially all of its assets and the consequent
     discontinuance of its business, or in the event of a merger, exchange,
     consolidation or liquidation of the Company, the Board shall, in its sole
     discretion, in connection with the Board's adoption of the plan for sale,
     merger, exchange, consolidation or liquidation, provide for one or more of
     the following with respect to Restricted Stock Awards that are, on such
     date, still subject to a Restriction Period: (i) the removal of the
     restrictions on any or all outstanding Restricted Stock Awards; (ii) the

                                       12
<PAGE>

     complete termination of this Plan and forfeiture of outstanding Restricted
     Stock Awards prior to a date specified by the Board; and (iii) the
     continuance of the Plan with respect to the Restricted Stock Award which
     were outstanding as of the date of adoption by the Board of such plan for
     sale, merger, exchange, consolidation or liquidation and provide to
     participants holding Restricted Stock Awards the right to an equivalent
     number of restricted shares of stock of the corporation succeeding the
     Company by reason of such sale, merger, exchange, consolidation or
     liquidation. The grant of a Restricted Stock Award pursuant to the Plan
     shall not limit in any way the right or power of the Company to make
     adjustments, reclassifications, reorganizations or changes of its capital
     or business structure or to merge, exchange or consolidate or to dissolve,
     liquidate, sell or transfer all or any part of its business or assets.

     SECTION 8. Deferred Stock Awards.

     (a) Administration. Deferred Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the officers, key employees, members of the Board of Directors and Consultants
of the Company and Subsidiaries to whom and the time or times at which Deferred
Stock shall be awarded, the number of Shares of Deferred Stock to be awarded to
any participant or group of participants, the duration of the period (the
"Deferral Period") during which, and the conditions under which, receipt of the
Stock will be deferred, and the terms and conditions of the award in addition to
those contained in paragraph (b) of this Section 8. The Committee may also
condition the grant of Deferred Stock upon the attainment of specified
performance goals. The provisions of Deferred Stock awards need not be the same
with respect to each recipient.

     (b) Terms and Conditions.

          (i) Subject to the provisions of this Plan and the award agreement,
     Deferred Stock awards may not be sold, assigned, transferred, pledged or
     otherwise encumbered during the Deferral Period. In no event shall the
     Deferral Period be less than one (1) year. At the expiration of the
     Deferral Period (or Elective Deferral Period, where applicable), share
     certificates shall be delivered to the participant, or his legal
     representative, in a number equal to the shares covered by the Deferred
     Stock award.

          (ii) Amounts equal to any dividends declared during the Deferral
     Period with respect to the number of shares covered by a Deferred Stock
     award will be paid to the participant currently or deferred and deemed to
     be reinvested in additional Deferred Stock or otherwise reinvested, all as
     determined at the time of the award by the Committee, in its sole
     discretion.

          (iii) Subject to the provisions of the award agreement and paragraph
     (b)(iv) of this Section 8, upon termination of employment for any reason
     during the Deferral Period for a given award, the Deferred Stock in
     question shall be forfeited by the participant.

          (iv) In the event of special hardship circumstances of a participant
     whose employment is terminated (other than for Cause) including death,
     Disability or Retirement, or

                                       13
<PAGE>

     in the event of an unforeseeable emergency of a participant still in
     service, the Committee may, in its sole discretion, when it finds that a
     waiver would be in the best interest of the Company, waive in whole or in
     part any or all of the remaining deferral limitations imposed hereunder
     with respect to any or all of the participant's Deferred Stock.

          (v) A participant may elect to further defer receipt of the award for
     a specified period or until a specified event (the "Elective Deferral
     Period"), subject in each case to the Committee's approval and to such
     terms as are determined by the Committee, all in its sole discretion.
     Subject to any exceptions adopted by the Committee, such election must
     generally be made prior to completion of one half of the Deferral Period
     for a Deferred Stock award (or for an installment of such an award).

          (vi) Each award shall be confirmed by, and subject to the terms of, a
     Deferred Stock agreement executed by the Company and the participant.

     SECTION 9. Transfer, Leave of Absence, etc.

     For purposes of the Plan, the following events shall not be deemed a
termination of employment:

          (a) a transfer of an employee from the Company to a Parent Corporation
     or Subsidiary, or from a Parent Corporation or Subsidiary to the Company,
     or from one Subsidiary to another;

          (b) a leave of absence, approved in writing by the Committee, for
     military service or sickness, or for any other purpose approved by the
     Company if the period of such leave does not exceed ninety (90) days (or
     such longer period as the Committee may approve, in its sole discretion);
     and

          (c) a leave of absence in excess of ninety (90) days, approved in
     writing by the Committee, but only if the employee's right to reemployment
     is guaranteed either by a statute or by contract, and provided that, in the
     case of any leave of absence, the employee returns to work within 30 days
     after the end of such leave.

     SECTION 10. Amendments and Termination.

     The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made (i) which would impair the rights
of an optionee or participant under a Stock Option, Restricted Stock or other
Stock-based award theretofore granted, without the optionee's or participant's
consent, or (ii) which without the approval of the stockholders of the Company
would cause the Plan to no longer comply with Rule 16b-3 under the Securities
Exchange Act of 1934, Section 422 of the Code or any other regulatory
requirements.

     The Committee may amend the terms of any award or option theretofore
granted, prospectively or retroactively to the extent such amendment is
consistent with the terms of this Plan, but no such amendment shall impair the
rights of any holder without his or her consent except to the extent authorized
under the Plan. The Committee may also substitute new Stock

                                       14
<PAGE>

Options for previously granted options, including previously granted options
having higher option prices.

     SECTION 11. Unfunded Status of Plan.

     The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Stock or payments in lieu of or with respect to awards
hereunder, provided, however, that the existence of such trusts or other
arrangements is consistent with the unfunded status of the Plan.

     SECTION 12.  General Provisions.

     (a) The Committee may require each person purchasing shares pursuant to a
Stock Option under the Plan to represent to and agree with the Company in
writing that the optionee is acquiring the shares without a view to distribution
thereof. The certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer.

     All certificates for shares of Stock delivered under the Plan pursuant to
any Restricted Stock, Deferred Stock or other Stock-based awards shall be
subject to such stock-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Stock is
then listed, and any applicable Federal or state securities laws, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.

     (b) Subject to paragraph (d) below, recipients of Restricted Stock,
Deferred Stock and other Stock-based awards under the Plan (other than Stock
Options) are not required to make any payment or provide consideration other
than the rendering of services.

     (c) Nothing contained in this Plan shall prevent the Board of Directors
from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases. The adoption
of the Plan shall not confer upon any employee of the Company or any Subsidiary
any right to continued employment with the Company or a Subsidiary, as the case
may be, nor shall it interfere in any way with the right of the Company or a
Subsidiary to terminate the employment of any of its employees at any time.

     (d) Each participant shall, no later than the date as of which any part of
the value of an award first becomes includible as compensation in the gross
income of the participant for Federal income tax purposes, pay to the Company,
or make arrangements satisfactory to the Committee regarding payment of, any
Federal, state, or local taxes of any kind required by law to be

                                       15
<PAGE>

withheld with respect to the award. The obligations of the Company under the
Plan shall be conditional on such payment or arrangements and the Company and
Subsidiaries shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the participant. With
respect to any award under the Plan, if the terms of such award so permit, a
participant may elect by written notice to the Company to satisfy part or all of
the withholding tax requirements associated with the award by (i) authorizing
the Company to retain from the number of shares of Stock that would otherwise be
deliverable to the participant, or (ii) delivering to the Company from shares of
Stock already owned by the participant, that number of shares having an
aggregate Fair Market Value equal to part or all of the tax payable by the
participant under this Section 12(d). Any such election shall be in accordance
with, and subject to, applicable tax and securities laws, regulations and
rulings.

     (e) At the time of grant, the Committee may provide in connection with any
grant made under this Plan that the shares of Stock received as a result of such
grant shall be subject to a repurchase right in favor of the Company, pursuant
to which the participant shall be required to offer to the Company upon
termination of employment for any reason any shares that the participant
acquired under the Plan, with the price being the then Fair Market Value of the
Stock or, in the case of a termination for Cause, an amount equal to the cash
consideration paid for the Stock, subject to such other terms and conditions as
the Committee may specify at the time of grant. The Committee may, at the time
of the grant of an award under the Plan, provide the Company with the right to
repurchase, or require the forfeiture of, shares of Stock acquired pursuant to
the Plan by any participant who, at any time within two years after termination
of employment with the Company, directly or indirectly competes with, or is
employed by a competitor of, the Company.

     (f) The reinvestment of dividends in additional Restricted Stock (or in
Deferred Stock or other types of Plan awards) at the time of any dividend
payment shall only be permissible if the Committee (or the Company's chief
financial officer) certifies in writing that under Section 3 sufficient shares
are available for such reinvestment (taking into account then outstanding Stock
Options and other Plan awards).

                                       16Exhibit 10.39

                          PEACEFUL POSSESSION AGREEMENT

         AGREEMENT made this 24th day of January, 2002, by and among between
Kolar, Inc., a Delaware corporation with an office at 407 Cliff Street, Ithaca,
New York 14850 (hereinafter called the "Debtor"), JPMorgan Chase Bank f/k/a The
Chase Manhattan Bank, as lender and Administrative Agent, a New York Banking
corporation with an office at 395 North Service Road, Suite 302, Melville, New
York 11747 and J.P. Morgan Leasing, Inc., a New York Corporation with an office
at One Chase Square, Rochester, New York 14643 (hereinafter collectively the
"Bank").
                              W I T N E S S E T H :
         WHEREAS, in order to secure certain indebtedness (i) evidenced by a
certain Credit Agreement, dated as of October 9, 1997, as amended from time to
time (the "Credit Agreement") and certain notes (the "Notes") executed in
connection with the Credit Agreement and (ii) a certain line of credit dated
July 11, 2001 (the "Line"), the Promissory Note dated October 1, 2001 in the
original amount of $1,020,000 in favor of the Chase Manhattan Bank (the "Chase
Note") and the Promissory Note dated December 31, 2001, in the original
principal amount of $680,000, payable to Mellon Bank (the "Mellon Note") and
(iii) a certain Master Lease Purchase Agreement dated as of August 14, 2000 and
Schedule 1 annexed thereto (the "Lease", and the Credit Agreement, Notes, Line,
Chase Note, Mellon Note, Lease and the documents executed in connection
therewith are collectively referred to as the "Financing Agreements"), the
Debtor has, pursuant to certain of the Financing Agreements, granted to the Bank
a security interest in all of its personal property collateral, wherever located
as more fully set forth on Schedule A hereto (the foregoing hereinafter
collectively called the "Collateral"); and

         WHEREAS, the Debtor is presently in default under the terms of the
Financing Agreements between the Debtor and Bank; and

                                      -1-
<page>

         WHEREAS, pursuant to the terms of the Financing Agreements, the Bank is
presently entitled to possession of the Collateral, including the right to make
direct collection of the accounts receivable; and

         WHEREAS, the Debtor desires to deliver peaceful possession of the
Collateral to the Bank at the Debtor's premises located at 407 Cliff Street,
618-620 Buffalo Street, 604 and 612 Elmira Road, and 239 Cherry Street, Ithaca,
New York (the "Premises") pursuant to the Financing Agreements and for the
purpose of enabling the Bank to dispose of the Collateral at said Premises;

         NOW THEREFORE, the parties hereto agree as follows:

1. The Debtor hereby delivers peaceful possession of the Collateral to the Bank
for the purpose of enabling the Bank to sell, convey or otherwise dispose of
said Collateral pursuant to its security interests therein. Possession of the
Collateral shall be effectuated by the Bank taking possession of the Collateral
on the Debtor's Premises. At its sole option, the Bank may post signs at the
Premises and take any other action it deems reasonable to indicate the Bank's
possession as a secured party and to preserve, protect and secure the
Collateral.

2. In connection with the foregoing, the Debtor grants the Bank and
its designees permission to enter upon the Debtor's Premises and to have
complete access to and control over the Debtor's books and records for so long
as the Bank reasonably deems necessary. The Bank or its designees may remain in
possession of said Collateral for the purpose of taking any steps which it deems
necessary in order to dispose of the Collateral, and it may remain in possession
thereof for so long as it deems necessary to effectuate a commercially
reasonable disposition of all or any portion of the Collateral. The Bank may
designate the personnel who will conduct such disposition of Collateral from
such Premises. The Bank or its designees may, in its sole discretion, remain in
possession to use or operate all or any part of the Collateral for the purpose
of completing customer orders or otherwise preserving the Collateral or its
value in any reasonable manner so as to maintain the going business value of the
Collateral. While the Bank, or its designees, is in possession of the
Collateral, it shall have no liability to the Debtor, except for acts of willful
misconduct or gross negligence occasioned by it or its servants, agents or
representatives.

                                      -2-
<page>
 3. During such period as the Bank remains in possession of the
Collateral as provided hereunder prior to the time of sale or disposition, the
Bank shall not be deemed to be in control of the Premises and shall have no
liability for the payment of any taxes, rents or other charges in relation to
the Collateral or the Premises. The risk of accidental loss or damage to the
Collateral shall remain upon the Debtor to the extent of any deficiency in any
effective insurance coverage, except for acts of willful misconduct or gross
negligence occasioned by the Bank or its servants, agents or representatives. At
its sole option and discretion, the Bank may pay the costs of insurance or other
charges incurred in the custody or preservation of the Collateral on the
Premises and such costs shall be secured by the Collateral.

4. The Debtor acknowledges that the Bank intends to commence active preparation
immediately for the sale or other disposition of the Collateral and will
accomplish such sale or disposition in a commercially reasonable time and manner
hereafter. In the event the Bank determines that it is commercially reasonable
to dispose of all or any portion of said Collateral by means of private sale, or
the Bank determines it is commercially reasonable to make a public sale of all
or any portion of the Collateral, the Bank shall give five (5) days prior notice
to the Debtor of the time and place of such public or private sale. Such notice
shall be sent to the Debtor at 407 Cliff Street, Ithaca, New York 14850. The
Debtor hereby agrees that the notice given or described herein constitutes or
shall constitute reasonable notification within the meaning of the Uniform
Commercial Code.

                                      -3-
<page>
5. The Debtor shall cooperate to the extent reasonably required
by the Bank in furnishing information and assistance necessary to effectuate the
sale of Collateral and in obtaining and/or preparing any bills of sale or other
documents required incident to such sale.

6. The Debtor shall supply to the Bank all necessary information which the Bank
reasonably requires with respect to the collection of its receivables and shall
provide to the Bank all necessary books, records, invoices and other documents
relevant to the collection of the receivables and shall exercise its best
efforts to provide the Bank with witnesses or other parties who have knowledge
of information relevant to the collection of these receivables.

7. The Bank does not accept possession of the Collateral, nor assignment of the
receivables, as full satisfaction or a release of the Debtor's obligations to
the Bank, and the Bank shall continue to have all rights and remedies to which
it is otherwise entitled with respect to the obligations secured by the
Collateral, including but not limited to the right to collect a deficiency
judgment against the Debtor or any guarantor and this agreement shall not
constitute a waiver or modification thereof. Such rights and remedies shall be
cumulative and may be pursued by the Bank at any time, whether or not the
disposition of the Collateral has been effectuated.

8. Debtor will indemnify, defend and hold the Bank, its agents and employees
harmless from any and all loss, liability, damage and expenses, including
attorney's fees, in any way suffered, incurred or paid by the Bank, its agents
and employees as a result of any spill of waste oil and/or other contaminants on
the Debtor's premises, except for acts of willful misconduct or gross negligence
occasioned by the Bank or its servants, agents or representatives, and the
Debtor hereby consents to the removal of all waste oil and/or other contaminants
from the Collateral by the Bank or its agents.

9. (a). The Debtor acknowledges that the outstanding principal balance under the
Financing Agreements on the date hereof is as follows:

         A. Credit Agreement: $ 3,243,819.88

         B. Chase Note: $1,020,000.00

         C. Mellon Note $ 680,000.00

         D. Lease $1,287,422.28 (as of February 4, 2002; valid through February
            18, 2002)

         E. Restructuring Fees $ 50,000.00

which sums, with interest thereon, costs and expenses as set forth in the
Financing Agreements, are due and owing without offset, counterclaim and/or
defense of any kind whatsoever.

  (b) The Financing Agreements are legal, valid, binding and enforceable against
the Debtor and it has no counterclaim, claim of offset or defense with respect
thereto.

10. This Agreement may be executed and delivered in multiple counter
part copies, each of which shall be an original and all of which shall
constitute one and the same agreement. This Agreement may not be amended,
supplemented or modified unless pursuant to a writing executed by each of the
Parties hereto.

IN WITNESS WHEREOF, the parties have caused this instrument to
be executed in their corporate names on the day and year first above written.

BANK:

         JPMORGAN CHASE BANK

By:      /s/ Emilia Teige
         ------------------------------------
         Emilia Teige, Vice President

         J.P. MORGAN LEASING, INC.

By:      /s/ Michael O'Hern
         -------------------------------------
         Michael O'Hern, Senior Vice President

DEBTOR:

         KOLAR, INC.

By:      /s/ Edward J. Fred
         ------------------------------------
         Edward J. Fred, Vice President & CFO

                                      -4-
<Page>

CONSENTED HEREIN:

         CPI AEROSTRUCTURES, INC.

By:      /s/ Edward J. Fred
         ------------------------------------
         Edward J. Fred, President & CFO

                                      -5-

<Page>

STATE OF NEW YORK )
                  ) ss.:
COUNTY OF         )

         On this ____ day of __________________, 20____, before me, the
undersigned officer, personally appeared _________________________,
______________________ of ________________________________________, signer and
sealer of the foregoing instrument and acknowledged the same to be his free act
and deed and the free act and deed of said corporation.

                                             -----------------------------------
                                             Notary Public
                                             My Commission Expires: ____________

STATE OF NEW YORK )
                  ) ss.:
COUNTY OF         )

         On this 24th day of January, 2002, before me, the undersigned officer,
personally appeared Edward J. Fred, President and CFO of CPI Aerostructures,
Inc., signer and sealer of the foregoing instrument and acknowledged the same to
be his free act and deed and the free act and deed of said corporation.

                                          /s/ Catherine A. Clare
                                          -----------------------------------
                                          Notary Public
                                          My Commission Expires: July 27, 2002

                                      -6-
<Page>

STATE OF NEW YORK )
                  ) ss.:
COUNTY OF         )

         On this ____ day of __________________, 20____, before me, the
undersigned officer, personally appeared _________________________,
______________________ of ________________________________________, signer and
sealer of the foregoing instrument and acknowledged the same to be his free act
and deed and the free act and deed of said corporation.

                                             -----------------------------------
                                             Notary Public
                                             My Commission Expires: ____________
STATE OF NEW YORK )
                  ) ss.:
COUNTY OF         )

         On this ____ day of __________________, 20____, before me, the
undersigned officer, personally appeared _________________________,
______________________ of ________________________________________, signer and
sealer of the foregoing instrument and acknowledged the same to be his free act
and deed and the free act and deed of said corporation.

                                             -----------------------------------
                                             Notary Public
                                             My Commission Expires: ____________

                                      -7-

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