Document:

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                                                                   EXHIBIT 10.33

                               SEVERANCE AGREEMENT

                  THIS AGREEMENT is entered into as of October 25, 1999 by and
between Aerial Communications, Inc., a Delaware corporation, and Carol J. Ogren
(the "Executive").

                  WHEREAS, the Executive currently serves as a key employee of
the Company (as defined in Section 1) or one of its subsidiaries and the
Executives' services and knowledge are valuable to the Company in connection
with the management of one or more of the Company's principal operating
facilities, divisions, departments or subsidiaries;

                  WHEREAS, the Board (as defined in Section 1) has determined
that it is in the best interests of the Company and its stockholders to secure
the Executive's continued services and to ensure the Executive's continued
dedication and objectivity in the event of any threat or occurrence of, or
negotiation or other action that could lead to, or create the possibility of, a
Change in Control (as defined in Section 1) of the Company, so that the
Executive need not be hindered or distracted by personal uncertainties and risks
created by any such possible Change in Control, and to encourage the Executive's
full attention and dedication to the Company, the Board has authorized the
Company to enter into this Agreement.

                  NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and agreements herein contained, the Company and the
Executive hereby agree as follows:

                  1. DEFINITIONS. As used in this Agreement, the following terms
shall have the respective meanings set forth below:

                  (a) "Affiliate" means a corporation which owns directly or
indirectly at least 50% of the outstanding stock of the Company or the combined
voting power of such outstanding stock, or a corporation at least 50% of whose
outstanding stock or the combined voting power of such outstanding stock is
owned directly or indirectly by the Company.

                  (b) "Board" means the Board of Directors of the Company.

                  (c) "Cause" means (1) a material breach by the Executive of
those duties and responsibilities of the Executive which do not, in the
aggregate, differ materially from the duties and responsibilities of the
Executive during the 90-day period immediately prior to a Change in Control
(other than as a result of incapacity due to physical or mental illness) which
is willful, which is committed in bad faith or without reasonable belief that
such breach is in the best interests of the Company and which is not remedied in
a reasonable period of time after receipt of written notice from the Company
specifying such

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breach, (2) the commission by the Executive of a felony involving moral
turpitude, (3) the commission by the Executive of theft, fraud, breach of trust
or any act of dishonesty involving the Company or any Affiliate or (4) the
significant violation by the Executive of any statutory or common law duty of
loyalty to the Company or any Affiliate.

                  (d) "Change in Control" means a "change in control" with
respect to Telephone and Data Systems, Inc. as described on Exhibit A, at a time
when Telephone and Data Systems, Inc. owns directly or indirectly at least 50%
of either the outstanding stock of the Company or the combined voting power of
such stock, or one of the following events:

                  (1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Act"), of
beneficial ownership within the meaning of Rule 13d-3 promulgated under the Act
of 25% or more of the combined voting power of the then outstanding securities
of the Company entitled to vote generally on matters (without regard to the
election of directors) (the "Outstanding Voting Securities"), excluding,
however, the following: (i) any acquisition directly from the Company, or an
Affiliate (excluding any acquisition resulting from the exercise of an exercise,
conversion or exchange privilege, unless the security being so exercised,
converted or exchanged was acquired directly from the Company or an Affiliate),
(ii) any acquisition by the Company or an Affiliate, (iii) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained by the Company
or an Affiliate, (iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of subsection (3)
below, or (v) any acquisition by the following persons: (A) LeRoy T. Carlson or
his spouse, (B) any child of LeRoy T. Carlson or the spouse of any such child,
(C) any grandchild of LeRoy T. Carlson, including any child adopted by any child
of LeRoy T. Carlson, or the spouse of any such grandchild, (D) the estate of any
of the persons described in clauses (A)-(C), (E) any trust or similar
arrangement (including any acquisition on behalf of such trust or similar
arrangement by the trustees or similar persons) PROVIDED THAT all of the current
beneficiaries of such trust or similar arrangement are persons described in
clauses (A)-(C) or their lineal descendants, or (F) the voting trust which
expires on June 30, 2009, or any successor to such voting trust, including the
trustees of such voting trust on behalf of such voting trust (all such persons,
collectively, the "Exempted Persons");

         (2) individuals who, as of the date hereof constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of
such Board; PROVIDED THAT any individual

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who becomes a director of the Company subsequent to the date hereof whose
election, or nomination for election by the Company's stockholders, was approved
by the vote of at least a majority of the directors then comprising the
Incumbent Board shall be deemed a member of the Incumbent Board; and PROVIDED
FURTHER, that any individual who was initially elected as a director of the
Company as a result of an actual or threatened election contest, as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the Act, or any
other actual or threatened solicitation of proxies or consents by or on behalf
of any Person other than the Board shall not be deemed a member of the Incumbent
Board;

         (3) the consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (a "Corporate Transaction"), excluding, however, a Corporate Transaction
pursuant to which (i) all or substantially all of the individuals or entities
who are the beneficial owners of the Outstanding Voting Securities immediately
prior to such Corporate Transaction will beneficially own, directly or
indirectly, more than 51% of the combined voting power of the outstanding
securities of the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result of such
transaction owns, either directly or indirectly, the Company or all or
substantially all of the Company's assets) which are entitled to vote generally
on matters (without regard to the election of directors), in substantially the
same proportions relative to each other as the shares of Outstanding Voting
Securities are owned immediately prior to such Corporate Transaction, (ii) no
Person (other than the following Persons: (v) the Company or an Affiliate, (w)
any employee benefit plan (or related trust) sponsored or maintained by the
Company or an Affiliate, (x) the corporation resulting from such Corporate
Transaction, (y) the Exempted Persons, (z) and any Person which beneficially
owned, immediately prior to such Corporate Transaction, directly or indirectly,
25% or more of the Outstanding Voting Securities) will beneficially own,
directly or indirectly, 25% or more of the combined voting power of the
outstanding securities of such corporation entitled to vote generally on matters
(without regard to the election of directors) and (iii) individuals who were
members of the Incumbent Board will constitute at least a majority of the
members of the board of directors of the corporation resulting from such
Corporate Transaction; or

                  (4) the consummation of a plan of complete liquidation or
dissolution of the Company.

                  (e) "Company" means Aerial Communications, Inc., a Delaware
corporation.

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                  (f) "Date of Termination" means (1) the effective date on
which the Executive's employment by the Company terminates as specified in a
prior written notice by the Company or the Executive, as the case may be, to the
other, delivered pursuant to Section 11 or (2) if the Executive's employment by
the Company terminates by reason of death, the date of death of the Executive.

                  (g) "Good Reason" means, without the Executive's express
written consent, the occurrence of any of the following events after a Change in
Control:

                  (1) any of (i) the assignment to the Executive of a materially
lower level of responsibility or status with the Company than existed
immediately prior to such Change in Control, or (ii) any failure to re-elect the
Executive to any significant office or, if applicable, directorship with the
Company held by the Executive immediately prior to such Change in Control;

                  (2) a reduction by the Company in the Executive's rate of
annual base salary or bonus opportunity as in effect immediately prior to such
Change in Control;

                  (3) any requirement of the Company that (i) the Executive be
based more than 30 miles from the facility where the Executive is located at the
time of the Change in Control or (ii) the Executive increase travel on Company
business by 20% or more than the travel obligations of the Executive immediately
prior to such Change in Control;

                  (4) the failure of the Company to (i) continue in effect any
employee benefit plan or compensation plan in which the Executive is
participating immediately prior to such Change in Control, unless the Executive
is permitted to participate in other plans providing the Executive with
substantially comparable benefits, or the taking of any action by the Company
which would adversely affect the Executive's participation in or materially
reduce the Executive's benefits under any such plan, (ii) provide the Executive
and the Executive's dependents welfare benefits (including, without limitation,
medical, prescription, dental, disability, salary continuance, employee life,
group life, accidental death and travel accident insurance plans and programs)
in accordance with the plans, practices, programs and policies of the Company
and its affiliated companies in effect for the Executive immediately prior to
such Change in Control as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated companies; or

                  (5) the failure of the Company to obtain the assumption
agreement from any successor as contemplated in Section 10(b).

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                  (h) "Nonqualifying Termination" means a termination of the
Executive's employment (1) by the Company for Cause, (2) by the Executive for
any reason other than a Good Reason, (3) as a result of the Executive's death or
(4) by the Company due to the Executive's absence from his duties with the
Company on a full-time basis for at least 180 consecutive days as a result of
the Executive's incapacity due to physical or mental illness.

                  (i) "Termination Period" means the period of time beginning
with a Change in Control and ending on the earlier to occur of (1) two years
following such Change in Control and (2) the Executive's death.

                  2. OBLIGATIONS OF THE EXECUTIVE. The Executive agrees that in
the event any person or group attempts a Change in Control, he shall not
voluntarily leave the employ of the Company without Good Reason (a) until such
attempted Change in Control terminates or (b) if a Change in Control shall
occur, until 90 days following such Change in Control. For purposes of clause
(a) of the preceding sentence, Good Reason shall be determined as if a Change in
Control had occurred when such attempted Change in Control became known to the
Board.

                  3.       PAYMENTS UPON TERMINATION OF EMPLOYMENT.

                  (a) If during the Termination Period (i) the employment of the
Executive shall terminate, other than by reason of a Nonqualifying Termination,
and (ii) the Executive (or the Executive's executor or other legal
representative in the case of the Executive's death or disability following such
termination) executes a general release in the form of Exhibit A hereto within
five days following the Executive's Date of Termination and has not revoked such
release, then the Company shall pay to the Executive (or the Executive's
beneficiary or estate) within 30 days following the Date of Termination, as
compensation for services rendered to the Company:

                  (1) a cash amount equal to the sum of (i) the Executive's full
annual base salary from the Company and its affiliated companies through the
Date of Termination, to the extent not theretofore paid, (ii) the Executive's
target bonus for the fiscal year in which the Change in Control occurs,
multiplied by a fraction, the numerator of which is the number of days in the
fiscal year in which the Change in Control occurs through the Date of
Termination and the denominator of which is 365 or 366, as applicable, to the
extent not theretofore paid and (iii) any compensation previously deferred by
the Executive (together with any interest and earnings thereon) and any accrued
vacation pay, in each case to the extent not theretofore paid; plus

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                  (2) a lump-sum cash amount (subject to any applicable payroll
or other taxes required to be withheld pursuant to Section 5) in an amount equal
to (i)1.25 times the Executive's highest annual base salary from the Company and
its affiliated companies in effect during the 12-month period prior to the Date
of Termination, plus (ii)1.25 times the Executive's target bonus for the fiscal
year in which the Change in Control occurs, PROVIDED, HOWEVER, that any amount
paid pursuant to this Section 3(a)(2) shall be paid in lieu of any other amount
of severance relating to salary or bonus continuation to be received by the
Executive upon termination of employment of the Executive under any employment
agreement or severance plan, policy or arrangement of the Company, Aerial
Operating Company, Inc., Telephone and Data Systems, Inc. or any other Affiliate
(as determined immediately prior to a Change in Control).

                  (b)(1) In addition to the payments to be made pursuant to
Section 3(a) for a period of 15 months commencing on the Date of Termination,
the Company shall continue to keep in full force and effect all policies of
medical, accident, disability and life insurance with respect to the Executive
and his dependents with the same level of coverage, upon the same terms and
otherwise to the same extent as such policies shall have been in effect
immediately prior to the Date of Termination as provided generally with respect
to other peer executives of the Company and its affiliated companies, and the
Company and the Executive shall share the costs of the continuation of such
insurance coverage in the same proportion as such costs were shared immediately
prior to the Date of Termination.

                  (2) In addition to the payments to be made pursuant to Section
3(a), the Executive shall be entitled to outplacement services to be provided by
a firm selected by the Company, provided that such outplacement services are
commenced within 30 days following the Date of Termination. Payments in the
aggregate amount not to exceed $12,000 shall be made directly to such
outplacement firm upon submission of proper documentation to the Company. If the
Executive elects not to use such outplacement services, the Executive will not
be entitled to cash compensation in lieu thereof.

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                  (c) If during the Termination Period the employment of the
Executive shall terminate by reason of a Nonqualifying Termination, then the
Company shall pay to the Executive within 30 days following the Date of
Termination, a cash amount equal to the sum of (1) the Executive's full annual
base salary from the Company through the Date of Termination, to the extent not
theretofore paid, and (2) any compensation previously deferred by the Executive
(together with any interest and earnings thereon) and any accrued vacation pay,
in each case to the extent not theretofore paid.

             4. LIMITATION ON PAYMENTS BY THE COMPANY. Solely for the purposes
of the computation of benefits under this Agreement and notwithstanding any
other provisions hereof, payments to the Executive under this Agreement shall be
reduced (but not below zero) so that the present value, as determined in
accordance with Section 280G(d)(4) of the Code, of such payments plus any other
payments that must be taken into account for purposes of any computation
relating to the Executive under Section 280G(b)(2)(A)(ii) of the Code, shall
not, in the aggregate, exceed 2.99 times the Executive's "base amount," as such
term is defined in Section 280G(b)(3) of the Code. Notwithstanding any other
provision hereof, no reduction in payments under the limitation contained in the
immediately preceding sentence shall be applied to payments hereunder which do
not constitute "excess parachute payments" within the meaning of the Code. Any
payments in excess of the limitation of this Section 4 or otherwise determined
to be "excess parachute payments" made to the Executive hereunder shall be
deemed to be overpayments which shall constitute an amount owing from the
Executive to the Company with interest from the date of receipt by the Executive
to the date of repayment (or offset) at the applicable federal rate under
Section 1274(d) of the Code, compounded semi-annually, which shall be payable to
the Company upon demand; provided, however, that no repayment shall be required
under this sentence if in the written opinion of tax counsel satisfactory to the
Executive and delivered to the Executive and the Company such repayment does not
allow such overpayment to be excluded for federal income and excise tax purposes
from the Executive's income for the year of receipt or afford the Executive a
compensating federal income tax deduction for the year of repayment.

                  5. WITHHOLDING TAXES. The Company may withhold from all
payments due to the Executive (or his beneficiary or estate) hereunder all taxes
which, by applicable federal, state, local or other law, the Company is required
to withhold therefrom.

                  6. REIMBURSEMENT OF EXPENSES. If any contest or dispute shall
arise under this Agreement involving termination of the Executive's employment
with the Company or involving the failure or refusal of the Company to perform
fully in accordance

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with the terms hereof, the Company shall reimburse the Executive, on a current
basis, for all legal fees and expenses, if any, incurred by the Executive in
connection with such contest or dispute, together with interest thereon at a
rate equal to the prime rate, as published under "Money Rates" in THE WALL
STREET JOURNAL from time to time, but in no event higher than the maximum legal
rate permissible under applicable law, such interest to accrue from the date the
Company receives the Executive's statement for such fees and expenses through
the date of payment thereof; PROVIDED, HOWEVER, that in the event the resolution
of any such contest or dispute includes a finding denying, in total, the
Executive's claims in such contest or dispute, the Executive shall be required
to reimburse the Company, over a period of 12 months from the date of such
resolution, for all sums advanced to the Executive pursuant to this Section 6.

                  7. OPERATIVE EVENT. Notwithstanding any provision herein to
the contrary, no amounts shall be payable hereunder unless and until there is a
Change in Control at a time when the Executive is employed by the Company.

                  8. TERMINATION OF AGREEMENT. (a) This Agreement shall be
effective on the date hereof and shall continue until terminated by the Company
as provided in Section 8(b); PROVIDED, HOWEVER, that this Agreement shall
terminate in any event upon the earliest to occur of (i) termination of the
Executive's employment with the Company prior to a Change in Control, (ii) the
Executive's death and (iii) the date all obligations of the Company to make
payments or provide benefits to the Executive hereunder are satisfied in full.

                  (b) The Company shall have the right prior to a Change in
Control, in its sole discretion, pursuant to action by the Board, to approve the
termination of this Agreement, which termination shall not become effective
until the date fixed by the Board for such termination, which date shall be at
least 120 days after notice thereof is given by the Company to the Executive in
accordance with Section 11; PROVIDED, HOWEVER, that no such action shall be
taken by the Board during any period of time when the Board has knowledge that
any person has taken steps reasonably calculated to effect a Change in Control
until, in the opinion of the Board, such person has abandoned or terminated its
efforts to effect a Change in Control; and PROVIDED FURTHER, that in no event
shall this Agreement be terminated in the event of a Change in Control.

                  9. SCOPE OF AGREEMENT. Nothing in this Agreement shall be
deemed to entitle the Executive to continued employment with the Company or its
subsidiaries and, if the Executive's employment with the Company shall terminate
prior to a Change in Control, then the Executive shall have no further rights
under

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this Agreement; PROVIDED, HOWEVER, that any termination of the Executive's
employment following a Change in Control and prior to the end of the Termination
Period shall be subject to all of the provisions of this Agreement.

                  10.  SUCCESSORS; BINDING AGREEMENT.

                  (a) This Agreement shall not be terminated by any merger or
consolidation of the Company whereby the Company is or is not the surviving or
resulting corporation or as a result of any transfer of all or substantially all
of the assets of the Company. In the event of any such merger, consolidation or
transfer of assets, the provisions of this Agreement shall be binding upon the
surviving or resulting corporation or the person or entity to which such assets
are transferred.

                  (b) The Company agrees that concurrently with any merger,
consolidation or transfer of assets referred to in Section 10(a), it will cause
any successor or transferee unconditionally to assume, by written instrument
delivered to the Executive (or his beneficiary or estate), all of the
obligations of the Company hereunder. Failure of the Company to obtain such
assumption prior to or concurrent with the effectiveness of any such merger,
consolidation or transfer of assets shall be a breach of this Agreement and
shall entitle the Executive to compensation and other benefits from the Company
in the same amount and on the same terms as the Executive would be entitled
hereunder if the Executive's employment were terminated following a Change in
Control other than by reason of a Nonqualifying Termination. For purposes of
implementing the foregoing, the date on which any such merger, consolidation or
transfer becomes effective shall be deemed the Date of Termination.

                  (c) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive shall die while any amounts would be payable to the Executive
hereunder had the Executive continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to such person or persons appointed in writing by the Executive to
receive such amounts or, if no person is so appointed, to the Executive's
estate.

                  11. NOTICES. (a) For purposes of this Agreement, all notices
and other communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given when delivered or five days after
deposit in the United States mail, certified and return receipt requested,
postage prepaid, addressed (1) if to the Executive, to Carol J. Ogren, and if to
the Company, to Aerial Communications, Inc., attention Vice President, Human
Resources, or (2) to such other address as

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either party may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.

                  (b) A written notice of the Executive's Date of Termination by
the Company or the Executive, as the case may be, to the other, shall (i)
indicate the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) specify the termination
date (which date shall be not less than 15 days after the giving of such
notice). The failure by the Executive or the Company to set forth in such notice
any fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of the Executive or the Company hereunder or preclude
the Executive or the Company from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.

                  12. FULL SETTLEMENT; RESOLUTION OF DISPUTES. (a) The Company's
obligation to make any payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and such amounts shall not be reduced whether or
not the Executive obtains other employment.

                  (b) If there shall be any dispute between the Company and the
Executive in the event of any termination of the Executive's employment, then,
unless and until there is a final, nonappealable judgment by a court of
competent jurisdiction declaring that such termination was for Cause or without
Good Reason, or that the Company is not otherwise obligated to pay any amount or
provide any benefit to the Executive and his dependents or other beneficiaries,
as the case may be, under Sections 3(a) and 3(b), the Company shall pay all
amounts, and provide all benefits, to the Executive and his dependents or other
beneficiaries, as the case may be, that the Company would be required to pay or
provide pursuant to Sections 3(a) and 3(b) as though such termination were by
the Company without Cause or by the Executive with Good Reason; PROVIDED,
HOWEVER, that the Company shall not be required to pay any disputed amounts
pursuant to this Section 12(b) except upon receipt of an undertaking by or on
behalf of the Executive to repay all such amounts to which the Executive is
ultimately adjudged by such court not to be entitled.

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                  13. EMPLOYMENT WITH AFFILIATES. Employment with the Company
for purposes of this Agreement shall include employment with any corporation or
other entity in which the Company has a direct or indirect ownership interest of
50% of more of the total combined voting power of the then outstanding
securities of such corporation or other entity entitled to vote generally in the
election of directors.

                  14. GOVERNING LAW; VALIDITY. The interpretation, construction
and performance of this Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Illinois without
regard to the principle of conflicts of laws. The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity or
enforceability of any other provisions of this Agreement, which other provisions
shall remain in full force and effect.

                  15. COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed to be an original and both of which
together shall constitute one and the same instrument.

                  16. MISCELLANEOUS. No provision of this Agreement may be
modified or waived unless such modification or waiver is agreed to in writing
and signed by the Executive and by a duly authorized officer of the Company. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. Failure by the Executive or the Company to insist upon strict compliance
with any provision of this Agreement or to assert any right the Executive or the
Company may have hereunder, including, without limitation, the right of the
Executive to terminate employment for Good Reason, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement. Except as otherwise expressly set forth in this Agreement, the rights
of, and benefits payable to, the Executive, his estate or his beneficiaries
pursuant to this Agreement are in addition to any rights of, or benefits payable
to, the Executive, his estate or his beneficiaries under any other employee
benefit plan or compensation program of the Company.

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                  IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by a duly authorized officer of the Company and the Executive has
executed this Agreement as of the day and year first above written.

                                    AERIAL COMMUNICATIONS, INC.

                                    By:      /s/ Donald Warkentin
                                             ---------------------------
                                             Donald Warkentin, President

                                    EXECUTIVE

                                              /s/ Carol J. Ogren
                                             ------------------------------
                                                      Carol J. Ogren

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                                                                       Exhibit A
                              Change in Control of
                        Telephone and Data Systems, Inc.

         For purposes of paragraph 1(d) of the Agreement, a "change in control"
with respect to Telephone and Data Systems, Inc. shall mean one of the
following:
                  (1) the acquisition by any individual, entity or group (a
         "Person"), including any "person" within the meaning of Section
         13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership
         within the meaning of Rule 13d-3 promulgated under the Exchange Act, of
         25% or more of the combined voting power of the then outstanding
         securities of Telephone and Data Systems, Inc., a Delaware corporation
         (the "Company") entitled to vote generally on matters (without regard
         to the election of directors) (the "Outstanding Voting Securities"),
         excluding, however, the following: (i) any acquisition directly from
         the Company or a corporation which owns directly or indirectly at least
         50% of the outstanding stock of the Company or the combined voting
         power of such outstanding stock or a corporation at least 50% of whose
         outstanding stock or the combined voting power of such outstanding
         stock is owned directly or indirectly by the Company (an "Affiliate")
         (excluding any acquisition resulting from the exercise of an exercise,
         conversion or exchange privilege, unless the security being so
         exercised, converted or exchanged was acquired directly from the
         Company or an Affiliate), (ii) any acquisition by the Company or an
         Affiliate, (iii) any acquisition by an employee benefit plan (or
         related trust) sponsored or maintained by the Company or an Affiliate,
         (iv) any acquisition by any corporation pursuant to a transaction which
         complies with clauses (i), (ii) and (iii) of subsection (3) of this
         Exhibit A, or (v) any acquisition by the following persons: (A) LeRoy
         T. Carlson or his spouse, (B) any child of LeRoy T. Carlson or the
         spouse of any such child, (C) any grandchild of LeRoy T. Carlson,
         including any child adopted by any child of LeRoy T. Carlson, or the
         spouse of any such grandchild, (D) the estate of any of the persons
         described in clauses (A)-(C), (E) any trust or similar arrangement
         (including any acquisition on behalf of such trust or similar
         arrangement by the trustees or similar persons) PROVIDED THAT all of
         the current beneficiaries of such trust or similar arrangement are
         persons described in clauses (A)-(C) or their lineal descendants, or
         (F) the voting trust which expires on June 30, 2009, or any successor
         to such voting trust, including the trustees of such voting trust on
         behalf of such voting trust (all such persons, collectively, the
         "Exempted Persons");

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                  (2) individuals who, as of the effective date of the merger of
         Telephone and Data Systems, Inc., an Iowa corporation, into the
         Company, constitute the Board of Directors (the "Incumbent Board")
         cease for any reason to constitute at least a majority of such Board;
         PROVIDED THAT any individual who becomes a director of the Company
         subsequent to the effective date of the merger of Telephone and Data
         Systems, Inc., an Iowa corporation, into the Company, whose election,
         or nomination for election by the Company's stockholders, was approved
         by the vote of at least a majority of the directors then comprising the
         Incumbent Board shall be deemed a member of the Incumbent Board; and
         PROVIDED FURTHER, that any individual who was initially elected as a
         director of the Company as a result of an actual or threatened election
         contest, as such terms are used in Rule 14a-11 of Regulation 14A
         promulgated under the Exchange Act, or any other actual or threatened
         solicitation of proxies or consents by or on behalf of any Person other
         than the Board shall not be deemed a member of the Incumbent Board;

                  (3) the consummation of a reorganization, merger or
         consolidation or sale or other disposition of all or substantially all
         of the assets of the Company (a "Corporate Transaction"), excluding,
         however, a Corporate Transaction pursuant to which (i) all or
         substantially all of the individuals or entities who are the beneficial
         owners of the Outstanding Voting Securities immediately prior to such
         Corporate Transaction will beneficially own, directly or indirectly,
         more than 51% of the combined voting power of the outstanding
         securities of the corporation resulting from such Corporate Transaction
         (including, without limitation, a corporation which as a result of such
         transaction owns, either directly or indirectly, the Company or all or
         substantially all of the Company's assets) which are entitled to vote
         generally on matters (without regard to the election of directors), in
         substantially the same proportions relative to each other as the shares
         of Outstanding Voting Securities are owned immediately prior to such
         Corporate Transaction, (ii) no Person (other than the following
         Persons: (V) the Company or an Affiliate, (W) any employee benefit plan
         (or related trust) sponsored or maintained by the Company or an
         Affiliate, (X) the corporation resulting from such Corporate
         Transaction, (Y) the Exempted Persons, (Z) and any Person which
         beneficially owned, immediately prior to such Corporate Transaction,
         directly or indirectly, 25% or more of the Outstanding Voting
         Securities) will beneficially own, directly or indirectly, 25% or more
         of the combined voting power of the outstanding securities of such
         corporation entitled to vote

                                       A-2
<PAGE>

         generally on matters (without regard to the election of directors) and
         (iii) individuals who were members of the Incumbent Board will
         constitute at least a majority of the members of the board of
         directors of the corporation resulting from such Corporate
         Transaction; or

                  (4) the consummation of a plan of complete liquidation or
         dissolution of the Company.

                                       A-3
<PAGE>

                                                                       EXHIBIT B

                                 GENERAL RELEASE

                  This General Release (this "Release") is executed by _________
(the "Executive") pursuant to the Severance Agreement dated as of
______________, 1999 (the "Agreement") between the Executive and Aerial
Communications, Inc. (the "Company").

                  WHEREAS, the Executive's employment with the "Company" is
terminating;

                  WHEREAS, the Executive has had [21][45] days to consider the
form of this Release;

                  WHEREAS, the Company advised the Executive in writing to
consult with an attorney before signing this Release;

                  WHEREAS, the Executive acknowledges that the consideration to
be provided to the Executive under the Agreement is sufficient to support this
Release; and

                  WHEREAS, the Executive understands that the Company regards
the representations by the Executive in this Release as material and that the
Company is relying on such representations in paying amounts to the Executive
pursuant to the Agreement.

                  THE EXECUTIVE THEREFORE AGREES AS FOLLOWS:

                  1. The Executive's employment with the Company shall terminate
on ________, and the Executive shall receive the payments set forth in Section 3
of the Agreement in accordance with the terms and subject to the conditions
thereof.

                  2. The Executive, on behalf of the Executive and anyone
claiming through the Executive, hereby agrees not to sue the Company or
Telephone and Data Systems, Inc. ("TDS") or any division, subsidiary, affiliate
or other related entity of the Company or TDS (whether or not such entity is
wholly owned), or any of the past, present or future directors, officers,
administrators, trustees, fiduciaries, employees, agents, attorneys or
shareholders of the Company or TDS or any of such other entities, or the
predecessors, successors or assigns of any of them (hereinafter referred to as
the "Released Parties"), and agrees to release and discharge, fully, finally and
forever, the Released Parties from any and all claims, causes of action,
lawsuits, liabilities, debts, accounts, covenants, contracts, controversies,
agreements, promises, sums of money, damages, judgments and demands of any
nature whatsoever, in law or in equity, both known and unknown, asserted or not
asserted,

<PAGE>

foreseen or unforeseen, which the Executive ever had or may presently have
against any of the Released Parties arising from the beginning of time up to and
including the effective date of this Release, including, without limitation, all
matters in any way related to the Executive's employment by the Company or by
TDS or any of their affiliates, the terms and conditions thereof, any failure to
promote the Executive and the termination or cessation of the Executive's
employment with the Company or by TDS or any of their affiliates, and including,
without limitation, any and all claims arising under the Civil Rights Act of
1964, as amended, the Civil Rights Act of 1991, the Civil Rights Act of 1866,
the Age Discrimination in Employment Act, the Older Workers' Benefit Protection
Act, the Family and Medical Leave Act, the Americans With Disabilities Act, the
Executive Retirement Income Security Act of 1974, the Illinois Human Rights Act,
the Chicago or Cook County Human Rights Ordinance or any other federal, state,
local or foreign statute, regulation, ordinance or order, or pursuant to any
common law doctrine; provided, however, that nothing contained in this Release
shall apply to, or release the Company from, any obligation of the Company
contained in the Agreement. The consideration offered in the Agreement is
accepted by the Executive as being in full accord, satisfaction, compromise and
settlement of any and all claims or potential claims, and the Executive
expressly agrees that the Executive is not entitled to, and shall not receive,
any further recovery of any kind from the Company or any of the other Released
Parties, and that in the event of any further proceedings whatsoever based upon
any matter released herein, neither the Company nor any of the other Released
Parties shall have any further monetary or other obligation of any kind to the
Executive, including any obligation for any costs, expenses or attorneys' fees
incurred by or on behalf of the Executive. The Executive agrees that the
Executive has no present or future right to employment with the Company or any
of the other Released Parties.

                  3. The Executive expressly represents and warrants that the
Executive is the sole owner of the actual and alleged claims, demands, rights,
causes of action and other matters that are released herein; that the same have
not been transferred or assigned or caused to be transferred or assigned to any
other person, firm, corporation or other legal entity; and that the Executive
has the full right and power to grant, execute and deliver the general release,
undertakings and agreements contained herein.

                  4. ACKNOWLEDGMENT BY EXECUTIVE. BY EXECUTING THIS RELEASE, THE
EXECUTIVE EXPRESSLY ACKNOWLEDGES THAT THE EXECUTIVE HAS READ THIS RELEASE
CAREFULLY, THAT THE EXECUTIVE FULLY UNDERSTANDS ITS TERMS AND CONDITIONS, THAT
THE EXECUTIVE HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING
THIS RELEASE, THAT THE EXECUTIVE HAS BEEN ADVISED THAT THE EXECUTIVE

<PAGE>

HAS [21][45] DAYS WITHIN WHICH TO DECIDE WHETHER OR NOT TO EXECUTE THIS
RELEASE AND THAT THE EXECUTIVE INTENDS TO BE LEGALLY BOUND BY IT. DURING A
PERIOD OF SEVEN DAYS FOLLOWING THE DATE OF THE EXECUTIVE'S EXECUTION OF THIS
RELEASE, THE EXECUTIVE SHALL HAVE THE RIGHT TO REVOKE THE RELEASE OF CLAIMS
UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT BY SERVING WITHIN SUCH PERIOD
WRITTEN NOTICE OF REVOCATION. IF THE EXECUTIVE EXERCISES THE EXECUTIVE'S
RIGHTS UNDER THE PRECEDING SENTENCE, THE EXECUTIVE SHALL FORFEIT ALL AMOUNTS
PAYABLE TO HIM PURSUANT TO THE AGREEMENT.

                  5. The Agreement and this Release constitute the entire
understanding between the parties. The Executive has not relied on any oral
statements that are not included in the Agreement or this Release.

                  6. This Release shall be construed, interpreted and applied in
accordance with the internal laws of the State of Illinois without regard to the
principle of conflicts of laws.

                                                  ---------------------------
                                                        [NAME]

                                                     Date:
                                                          ----------------------<PAGE>

                                                                Exhibit 10.38.20

     -----------------------------------------------------------------------

                                 LOAN AGREEMENT

     -----------------------------------------------------------------------

                         CITIZENS BANK OF MASSACHUSETTS
                                   THE LENDER

     -----------------------------------------------------------------------

                             UFP TECHNOLOGIES, INC.
                         MOULDED FIBRE TECHNOLOGY, INC.
                                  THE BORROWER

     -----------------------------------------------------------------------

                                 August 13, 1999

<PAGE>

                                TABLE OF CONTENTS

<TABLE>

<S>         <C>                                                                                            <C>
ARTICLE 1 - DEFINITIONS:

ARTICLE 2 - THE REVOLVING CREDIT:
      2-1.     ESTABLISHMENT OF  REVOLVING CREDIT......................................................... 14
      2-2.     ESTABLISHMENT OF ACQUISITION LINE OF CREDIT................................................ 14
      2-3.     LOAN REQUESTS.............................................................................. 15
      2-4.     MAKING OF LOANS UNDER CREDITS.............................................................. 16
      2-5.     THE LOAN ACCOUNT........................................................................... 17
      2-6.     THE REVOLVING CREDIT NOTE.................................................................. 18
      2-7.     THE ACQUISITION CREDIT NOTE................................................................ 18
      2-8.     PAYMENT OF THE LOAN ACCOUNT................................................................ 18
      2-9.     INTEREST RATES. ........................................................................... 19
      2-10.    LINE (UNUSED) FEE.   (a)  ................................................................. 20
      2-11.    PROCEDURES FOR ISSUANCE OF L/C'S........................................................... 20
      2-12.    CHANGED CIRCUMSTANCES...................................................................... 20
      2-13.    INCREASED COSTS............................................................................ 21

ARTICLE 3 - GENERAL REPRESENTATIONS, COVENANTS AND WARRANTIES:
      3-1.     PAYMENT AND PERFORMANCE OF LIABILITIES..................................................... 22
      3-2.     DUE ORGANIZATION - CORPORATE AUTHORIZATION - NO CONFLICTS.................................. 22
      3-3.     DEPOSIT ACCOUNT............................................................................ 23
      3-4.     YEAR 2000 COMPLIANCE....................................................................... 23
      3-5.     TITLE TO ASSETS............................................................................ 24
      3-6.     INDEBTEDNESS............................................................................... 24
      3-7.     INSURANCE POLICIES......................................................................... 24
      3-8.     REQUIREMENTS OF LAW........................................................................ 24
      3-9.     MAINTAIN PROPERTIES........................................................................ 24
      3-10.    PAY TAXES.................................................................................. 25
      3-11.    NO MARGIN STOCK............................................................................ 25
      3-12.    ERISA...................................................................................... 25
      3-13.    HAZARDOUS MATERIALS........................................................................ 26
      3-14.    LITIGATION................................................................................. 26
               LOANS...................................................................................... 27
      3-16.    PROTECTION OF ASSETS....................................................................... 27
      3-17.    AFFILIATE TRANSACTIONS..................................................................... 27
      3-18.    ADEQUACY OF DISCLOSURE..................................................................... 27
      3-19.    OTHER COVENANTS............................................................................ 28

ARTICLE 4 - FINANCIAL REPORTING AND PERFORMANCE COVENANTS:
      4-1.     MAINTAIN RECORDS........................................................................... 28
      4-2.     ACCESS TO RECORDS.......................................................................... 29
      4-3.     QUARTERLY REPORTS.......................................................................... 29
      4-4.     ANNUAL REPORTS............................................................................. 29
      4-5.     OFFICERS' CERTIFICATES..................................................................... 29
      4-6.     ADDITIONAL FINANCIAL INFORMATION........................................................... 30
      4-7.     FINANCIAL PERFORMANCE COVENANTS............................................................ 30

<PAGE>

ARTICLE 5 - EVENTS OF DEFAULT:
      5-1.     FAILURE TO PAY CREDITS..................................................................... 31
      5-2.     FAILURE TO MAKE OTHER PAYMENTS............................................................. 31
      5-3.     FAILURE TO PERFORM COVENANT OR LIABILITY (GRACE PERIOD).................................... 31
      5-4.     MISREPRESENTATION.......................................................................... 31
      5-5.     ACCELERATION OF OTHER DEBT. BREACH OF LEASE................................................ 31
      5-6.     DEFAULT UNDER OTHER AGREEMENTS............................................................. 32
      5-7.     UNINSURED CASUALTY LOSS.................................................................... 32
      5-8.     JUDGMENT.  RESTRAINT OF BUSINESS........................................................... 32
      5-9.     BUSINESS FAILURE........................................................................... 32
      5-10.    BANKRUPTCY................................................................................. 32
      5-11.    MATERIAL ADVERSE CHANGE.................................................................... 33
      5-12.    INDICTMENT - FORFEITURE.................................................................... 33
      5-13.    CHANGE IN CONTROL.......................................................................... 33

ARTICLE 6 - RIGHTS AND REMEDIES UPON DEFAULT:
      6-1.     RIGHTS OF ENFORCEMENT...................................................................... 33
      6-2.     RIGHTS AND REMEDIES........................................................................ 33

ARTICLE 7 - NOTICES:
      7-1.     NOTICE ADDRESSES........................................................................... 34
      7-2.     NOTICE GIVEN............................................................................... 35

ARTICLE 8 - TERM:
      8-1.     TERMINATION OF CREDITS..................................................................... 35
      8-2.     PAYMENT S AT MATURITY...................................................................... 36

ARTICLE 9 - GENERAL:
      9-1.     SUCCESSORS AND ASSIGNS..................................................................... 36
      9-2.     SEVERABILITY............................................................................... 36
      9-3.     AMENDMENTS.  COURSE OF DEALING............................................................. 36
      9-4.     LENDER'S COSTS AND EXPENSES................................................................ 37
      9-5.     COPIES AND FACSIMILES...................................................................... 37
      9-6.     MASSACHUSETTS LAW.......................................................................... 37
      9-7.     CONSENT TO JURISDICTION.................................................................... 38
      9-8.     INDEMNIFICATION............................................................................ 38
      9-9.     RULES OF CONSTRUCTION...................................................................... 38
      9-10.    INTENT..................................................................................... 40
      9-11.    RIGHT OF SET-OFF........................................................................... 40
      9-12.    MAXIMUM INTEREST RATE...................................................................... 40
      9-13.    WAIVERS. .................................................................................. 40

</TABLE>

<PAGE>

                                    EXHIBITS

      2-6               :        Revolving Credit Note
      2-7               :        Acquisition Credit Note
      3-2               :        Related Entities
      3-5               :        Encumbrances
      3-6               :        Indebtedness
      3-7               :        Insurance Policies
      3-10              :        Taxes
      3-14              :        Litigation
      3-15              :        Loans
      4-7               :        Financial Performance Covenants

<PAGE>

--------------------------------------------------------------------------------

                                   LOAN AGREEMENT CITIZENS BANK OF MASSACHUSETTS
--------------------------------------------------------------------------------

                                                                 August 13, 1999

          THIS AGREEMENT is made between

               Citizens Bank of Massachusetts (hereinafter, the "Lender") a
          Massachusetts bank with offices at 28 State Street, Boston,
          Massachusetts 02109

               and

               UFP Technologies, Inc. (hereinafter, "UFP"), a Delaware
          corporation with its principal executive offices at 172 East Main
          Street, Georgetown, Massachusetts 01833

               and

               Moulded Fibre Technology, Inc. (hereinafter, "MFT"), a Maine
          corporation with its principal executive offices at 301 U.S. Route 1,
          Scarborough, Maine 04704.

         UFP and MFT shall be referred to herein from time to time jointly and
         severally as the "Borrower".

in consideration of the mutual covenants contained herein and benefits to be
derived herefrom,

                                   WITNESSETH:

ARTICLE 1 - DEFINITIONS:

         As herein used, the following terms have the following meanings or are
defined in the section of this Agreement so indicated:

         "ACQUISITION CREDIT":      Is defined in Section 2-2.

<PAGE>

          "ACQUISITION CREDIT CEILING":      $10,000,000.00.

          "ACQUISITION CREDIT NOTE":         Is defined in Section 2-7.

          "AFFILIATE": With respect to any two Persons, a relationship in which
               (a) one holds, directly or indirectly, not less than Twenty Five
               Percent (25%) of the capital stock, beneficial interests,
               partnership interests, or other equity interests of the other; or
               (b) one has, directly or indirectly, the right, under ordinary
               circumstances, to vote for the election of a majority of the
               directors (or other body or Person who has those powers
               customarily vested in a board of directors of a corporation); or
               (c) not less than Twenty Five Percent (25%) of their respective
               ownership is directly or indirectly held by the same third
               Person.

          "APPLICABLE MARGIN" means initially, the rates set forth below:

<TABLE>
<CAPTION>

                      ----------------------------------
                      Prime Margin        Libor Margin
                      ----------------------------------
                      <S>                 <C>
                      0%                  1.25%
                      ----------------------------------

</TABLE>

         Upon the receipt by the Lender of the Borrower's financial statement
for the fiscal quarter ending June 30, 1999 required to be delivered to the
Lender pursuant to Section 4-3 of this Agreement, the Applicable Margin shall be
adjusted based upon the performance covenants set forth below. Thereafter, the
Applicable Margin shall be adjusted quarterly after the delivery of the
financial statements required to be delivered to the Lender pursuant to Section
4-3 of this Agreement.

<TABLE>
<CAPTION>

-------------------------------------------------------------------------
Total Funded                       Prime Margin            Libor Margin
Debt/EBITDA
-------------------------------------------------------------------------
<S>                                   <C>                     <C>
    greater than 3.0 to 1              0%                      2.00%
-------------------------------------------------------------------------
  less than or equal to 3.0            0%                      1.75%
to 1.0 but greater than 2.5
           to 1.0
-------------------------------------------------------------------------
  less than or equal to 2.5            0%                      1.50%
 to 1.0 but greater than or
     equal to 2.0 to 1.0
-------------------------------------------------------------------------
     less than 2.0 to 1.0              0%                      1.25%
-------------------------------------------------------------------------

</TABLE>

<PAGE>

          "BANKRUPTCY CODE": Title 11, U.S.C., as amended from time to time.

          "BORROWER": Is defined in the Preamble.

               "BUSINESS DAY": Any day other than (a) a Saturday or Sunday; (b)
               any day on which banks in Boston, Massachusetts, generally are
               not open to the general public for the purpose of conducting
               commercial banking business; or (c) a day on which the Lender is
               not open to the general public to conduct business.

          "CHANGE IN CONTROL": 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 the Borrower.

          "COSTS OF COLLECTION": Includes, without limitation, all attorneys'
               reasonable fees and reasonable out-of-pocket expenses incurred by
               the Lender's attorneys, and all reasonable costs incurred by the
               Lender in the administration of the Liabilities and/or the Loan
               Documents, which costs and expenses are directly or indirectly
               related to or in respect of the Lender's: administration and
               management of the Liabilities; negotiation, documentation, and
               amendment of any Loan Document; or efforts to preserve, protect,
               collect, or enforce any collateral, the Liabilities, and/or the
               Lender's Rights and Remedies and/or any of the Lender's rights
               and remedies against or in respect of any guarantor or other
               person liable in respect of the Liabilities (whether or not suit
               is instituted in connection with such efforts).

          "CREDITS": The Revolving Credit and the Acquisition Credit,
               collectively.

<PAGE>

          "EBITDA": The Borrower's earnings before interest, taxes,
               depreciation, and amortization, each as determined in accordance
               with GAAP. As calculated herein, EBITDA shall be calculated on a
               rolling four quarter basis, including adjusted historical EBITDA
               for acquired entities.

          "EMPLOYEE BENEFIT PLAN": As defined in ERISA.

          "ENCUMBRANCE": Each of the following:

                    (a) Any security interest, mortgage, pledge, hypothecation,
               lien, attachment, or charge of any kind (including any agreement
               to give any of the foregoing); the interest of a lessor under a
               Capital Lease; conditional sale or other title retention
               agreement; sale of accounts receivable or chattel paper; or other
               arrangement pursuant to which any Person is entitled to any
               preference or priority with respect to the property or assets of
               another Person or the income or profits of such other Person or
               which constitutes an interest in property to secure an
               obligation; each of the foregoing whether consensual or
               non-consensual and whether arising by way of agreement, operation
               of law, legal process or otherwise.

                    (b) The filing of any financing statement under the UCC or
               comparable law of any jurisdiction.

          "END DATE": The date upon which both (a) all Liabilities have been
               paid in full and (b) all obligations of the Lender to make loans
               and advances and to provide other financial accommodations to the
               Borrower hereunder shall have been irrevocably terminated.

               "ENVIRONMENTAL LAWS": All of the following:

                                    (a) Any and all federal, state, local or
               municipal laws, rules, orders, regulations, statutes, ordinances,
               codes, decrees or requirements which regulate or relate to, or
               impose any standard of conduct or liability on account of or in
               respect to environmental protection matters, including, without
               limitation, Hazardous Materials, as are now or hereafter in
               effect.

                                    (b) The common law relating to damage to
               Persons or property from Hazardous Materials.

          "ERISA": The Employee Retirement Security Act of 1974, as amended.

          "ERISA AFFILIATE": Any Person which is under common control with the
               Borrower within

<PAGE>

               the meaning of Section 4001 of ERISA or is part of a group which
               includes the Borrower and which would be treated as a single
               employer under Section 414 of the Internal Revenue Code of 1986,
               as amended.

          "EVENTS OF DEFAULT": Is defined in Article 5.

          "GAAP": Principles which are consistent with those promulgated or
               adopted by the Financial Accounting Standards Board and its
               predecessors (or successors) in effect and applicable to that
               accounting period in respect of which reference to GAAP is being
               made, PROVIDED, HOWEVER, in the event of a Material Accounting
               Change, then unless otherwise specifically agreed to by the
               Lender, (a) the Borrower's compliance with the financial
               performance covenants imposed pursuant to Section 4-7 shall be
               determined as if such Material Accounting Change had not taken
               place and (b) the Borrower shall include, with its quarterly, and
               annual financial statements a schedule, certified by the
               Borrower's chief financial officer, on which the effect of such
               Material Accounting Change to the statement with which provided
               shall be described.

          "HAZARDOUS MATERIALS": Any (a) hazardous materials, hazardous waste,
               hazardous or toxic substances, petroleum products, which (as to
               any of the foregoing) are defined or regulated as a hazardous
               material in or under any Environmental Law and (b) oil in any
               physical state.

          "INDEBTEDNESS": All indebtedness and obligations of or assumed by any
               Person on account of or in respect to any of the following:

                    (a) In respect of money borrowed (including any indebtedness
               which is non-recourse to the credit of such Person but which is
               secured by an Encumbrance on any asset of such Person) whether or
               not evidenced by a promissory note, bond, debenture or other
               written obligation to pay money.

                    (b) In connection with any letter of credit or acceptance
               transaction (including, without limitation, the face amount of
               all letters of credit and acceptances issued for the account of
               such Person or reimbursement on account of which such Person
               would be obligated).

                    (c) In connection with the sale or discount of accounts
               receivable or chattel paper of such Person.

                    (d) On account of deposits or advances. "Indebtedness" also
               includes:

<PAGE>

                    (x) Indebtedness of others secured by an Encumbrance on any
               asset of such Person, whether or not such Indebtedness is assumed
               by such Person.

                    (y) Any guaranty, endorsement, suretyship or other
               undertaking pursuant to which that Person may be liable on
               account of any obligation of any third party.

                    (z) The Indebtedness of a partnership or joint venture in
               which such Person is a general partner or joint venturer.

          "INDEMNIFIED PERSON": Is defined in Section 9-8.

          "INTEREST PAYMENT DATE": With reference to:

                    Each Libor Loan: The last day of the Interest Period
               relating thereto; the last day of the third month of any Interest
               Period which consists of more than three months; the Termination
               Date; and the End Date.

                    Each Prime Rate Loan: the first day of each month; the
               Termination Date; and the End Date.

          "INTEREST PERIOD": (a) With respect to each Libor Loan: Subject to
               Subsection (c), below, the period commencing on the date of the
               making or continuation of, or conversion to, the subject Libor
               Loan and ending one, two, three, six or twelve months thereafter,
               as the Borrower may elect by notice (pursuant to Section 2.4(a)
               to the Lender.

                             (b) With respect to each Prime Rate Loan: Subject
               to Subsection (c), below, the period commencing on the date of
               the making or continuation of or conversion to such Prime Rate
               Loan and ending on that date (i) as of which the subject Prime
               Rate Loan is converted to a Libor Loan, as the Borrower may elect
               by notice (pursuant to Section 2-4(a) to the Lender, or (ii) on
               which the subject Prime Rate Loan is paid by the Borrower.

                             (c) The setting of Interest Periods is in all
               instances subject to the following:

                                 (i) Any Interest Period for a Prime Rate Loan
                             which would otherwise end on a day which is not a
                             Business Day shall be extended to the next
                             succeeding Business Day.

                                 (ii) Any Interest Period for a Libor Loan which
                             would otherwise end on a day that is not a Business
                             Day shall be extended to the next

<PAGE>

                             succeeding Business Day, unless that succeeding
                             Business Day is in the next calendar month, in
                             which event such Interest Period shall end on the
                             last Business Day of the month during which the
                             Interest Period ends.

                                 (iii) Subject to Subsection (iv), below, any
                             Interest Period applicable to a Libor Loan, which
                             Interest Period begins on a day for which there is
                             no numerically corresponding day in the calendar
                             month during which such Interest Period ends, shall
                             end on the last Business Day of the month during
                             which that Interest Period ends.

                                 (iv) Any Interest Period which would otherwise
                             end after the Termination Date shall end on the
                             Termination Date.

                                 (v) The number of Interest Periods in effect
                             at any one time is subject to Section 2-9(d)
                             hereof.

          "ISSUER": The Lender as issuer of any L/C.

          "L/C": Any letter of credit, the issuance of which is procured by the
               Lender for the account of the Borrower and any acceptance made on
               account of such letter of credit.

          "LEASE": Any lease or other agreement, no matter how styled or
               structured, pursuant to which the Borrower is entitled to the use
               or occupancy of any space.

          "LENDER": Is defined in the Preamble to the within Agreement.

          "LENDER'S RIGHTS AND REMEDIES": Is defined in Section 6-2.

          "LIABILITIES" (in the singular, "LIABILITY"):Includes, without
               limitation, all and each of the following, whether now existing
               or hereafter arising:

                           (a) Any and all direct and indirect liabilities,
                  debts, and obligations of the Borrower to the Lender, each of
                  every kind, nature, and description.

                           (b) Each obligation to repay any loan, advance,
                  indebtedness, note, obligation, overdraft, or amount now or
                  hereafter owing by the Borrower to the Lender (including all
                  future advances whether or not made pursuant to a commitment
                  by the Lender), whether or not any of such are liquidated,
                  unliquidated, primary, secondary, secured, unsecured, direct,
                  indirect, absolute, contingent, or of any other type, nature,
                  or description, or by reason of any cause of action which the
                  Lender may hold against the Borrower.

<PAGE>

                           (c) All notes and other obligations of the Borrower
                  now or hereafter assigned to or held by the Lender, each of
                  every kind, nature, and description.

                           (d) All interest, fees, and charges and other amounts
                  which may be charged by the Lender to the Borrower and/or
                  which may be due from the Borrower to the Lender from time to
                  time.

                           (e) All reasonable costs and expenses incurred or
                  paid by the Lender in respect of any agreement between the
                  Borrower and the Lender or instrument furnished by the
                  Borrower to the Lender (including, without limitation, Costs
                  of Collection, attorneys' reasonable fees, and all court and
                  litigation costs and expenses).

                           (f) Any and all covenants of the Borrower to or with
                  the Lender and any and all obligations of the Borrower to act
                  or to refrain from acting in accordance with any agreement
                  between the Borrower and the Lender or instrument furnished by
                  the Borrower to the Lender.

                           (g) Each of the foregoing as if each reference to the
                  "Lender" therein were to each Affiliate of the Lender.

          "LIBOR BUSINESS DAY": Any day which is both a Business Day and a day
               on which the principal interbank market for Libor deposits in
               London in which the Lender participates is open for dealings in
               United States Dollar deposits.

          "LIBOR LOAN": Any Revolving Credit Loan which bears interest at a
               Libor Rate.

          "LIBOR OFFER RATE": That rate of interest (rounded upwards, if
               necessary, to the next 1/100 of 1%) determined by the Lender to
               be the highest prevailing rate per annum at which deposits in
               U.S. Dollars are offered to the Lender, by first-class banks in
               the London interbank market in which the Lender participates at
               or about 10:00AM (Boston Time) Two (2) Libor Business Days before
               the first day of the Interest Period for the subject Libor Loan,
               for a deposit approximately in the amount of the subject loan for
               a period of time approximately equal to such Interest Period.

          "LIBOR MARGIN": See definition of Applicable Margin.

          "LIBOR RATE": That per annum rate (calculated on a 360 day year and
               actual days elapsed) which is the aggregate of the Libor Offer
               Rate PLUS the Libor Margin EXCEPT THAT, in the event that it is
               determined by the Lender that the Lender may be subject to the

<PAGE>

               Reserve Percentage, the "Libor Rate" shall mean, with respect to
               any Libor Loans then outstanding (from the date on which that
               Reserve Percentage first became applicable to such loans), and
               with respect to all Libor Loans thereafter made, an interest rate
               per annum equal the sum of (a) plus (b), where:

                           (a) is the decimal equivalent of the following
                  fraction:

                                LIBOR OFFER RATE
                                ----------------
                           1 minus Reserve Percentage

                           (b) the Applicable Libor Margin.

          "LINE (UNUSED) FEE": Is defined in Section 2-10.

          "LOAN ACCOUNT": Is defined in Section 2-5.

          "LOAN DOCUMENTS": This Agreement, each instrument and document
               executed and/or delivered as contemplated herein, and each other
               instrument or document from time to time executed and/or
               delivered in connection with the arrangements contemplated hereby
               or in connection with any transaction with the Lender or any
               Affiliate of the Lender, including, without limitation, any
               transaction which arises out of any cash management, depository,
               investment, letter of credit, interest rate protection, or
               equipment leasing services provided by the Lender or any
               Affiliate of the Lender, as each may be amended from time to
               time.

          "LOANS": A term of convenience which refers to so much of the unpaid
               principal balance of the Loan Account as bears the same rate of
               interest for the same Interest Period. (SEE Section 2-9(c).

          "MATERIAL ACCOUNTING CHANGE": Any change in GAAP applicable to
               accounting periods subsequent to the Borrower's fiscal year most
               recently completed prior to the execution of this Agreement,
               which change has a material effect on the Borrower's financial
               condition or operating results, as reflected on financial
               statements and reports prepared by or for the Borrower, when
               compared with such condition or results as if such change had not
               taken place or where preparation of the Borrower's statements and
               reports in compliance with such change results in the breach of a
               financial performance covenant imposed pursuant to Section 4-7
               where such a

<PAGE>

               breach would not have occurred if such change had not taken place
               or VISA VERSA.

          "MATERIAL ADVERSE CHANGE": Any event, fact, circumstance, change in,
               or effect on, the business of, the Borrower which, individually
               or in the aggregate or on a cumulative basis with any other
               circumstances, changes in, or effects on, the Borrower or its
               assets which:

                           (a) Is, or could reasonably be 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 reasonably be expected 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 .

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

                  "MATURITY DATE": July 31, 2002.

          "PARTICIPANT": Is defined in Section 9-11, hereof.

                  "PERMITTED ENCUMBRANCES": The following:
                           (a)      Encumbrances in favor of the Lender.
                           (b)      Those Encumbrances (if any) listed on
                  EXHIBIT 3-5, annexed hereto.
                           (c)      The interest of any of the Borrower's
                  landlords in any of the Borrower's Equipment which is so
                  affixed to the real estate of that landlord that an interest
                  therein arises under real estate law.

                           (d) Any limitation, included in a Lease, upon the
                  right of the Borrower to encumber the Borrower's interest in
                  that Lease.

                           (e) Purchase money security interests (as defined in
                  the UCC) in Equipment.

                           (f) Liens securing the payment of taxes, either not
                  yet overdue or the validity of which are being contested as
                  permitted by Section 3-10; non-consensual statutory liens
                  (other than liens securing the payment of taxes) arising in
                  the ordinary course of Borrower's business to the extent: such
                  liens secure indebtedness which is

<PAGE>

                  not overdue or such liens secure indebtedness relating to
                  claims or liabilities which are fully insured and being
                  defended at the sole cost and expense and at the sole risk
                  of the insurer or being contested in good faith by
                  appropriate proceedings diligently pursued and available to
                  Borrower, in each instance prior to the commencement of
                  foreclosure or other similar proceedings and with respect to
                  which adequate reserves have been set aside on the
                  Borrower's books (PROVIDED, HOWEVER, the inclusion of any of
                  the foregoing as "Permitted Encumbrances" shall not affect
                  their respective relative priorities vis a vis the security
                  interests created herein), zoning restrictions, easements,
                  licenses, covenants and other restrictions affecting the use
                  of real property which do not interfere in any material
                  respect with the use of such real property or ordinary
                  conduct of the business of Borrower as presently conducted
                  thereon or materially impair the value of the real property
                  which may be subject thereto.

          "PERSON": Any natural person, and any corporation, limited liability
               company, trust, partnership, joint venture, or other enterprise
               or entity.

          "PRIME": The Prime Rate announced from time to time by the Lender. In
               the event that the Lender ceases to announce such a rate, "Prime"
               shall refer to that rate or index announced or published from
               time to time as the Lender, in good faith, designates as the
               functional equivalent to said Prime Rate. Any change in "Prime"
               shall be effective, for purposes of the calculation of interest
               due hereunder, when such change is made effective generally by
               the bank on whose rate or index "Prime" is being set. In all
               events, interest which is determined by reference to Prime (or
               any successor to Prime) shall be calculated on a 360 day year and
               actual days elapsed.

          "PRIME MARGIN": See definition of Applicable Margin.

          "PRIME RATE": Prime plus the applicable Prime Margin.

          "PRIME RATE LOAN": Each Loan while bearing interest at Prime plus the
               applicable Prime Margin.

          "RELATED ENTITY": (a) Any corporation, limited liability company,
               trust, partnership, joint venture, or other enterprise which: is
               a parent, brother-sister, subsidiary, or affiliate, of the
               Borrower; could have such enterprise's tax returns or financial

<PAGE>

               statements consolidated with the Borrower's; could be a member of
               the same controlled group of corporations (within the meaning of
               Section 1563(a)(1), (2) and (3) of the Internal Revenue Code of
               1986, as amended from time to time) of which the Borrower is a
               member; controls or is controlled by the Borrower or by any
               Affiliate of the Borrower.

                                    (b)     Any Affiliate.

          "REQUIREMENT OF LAW": As to any Person:

                           (a)(i) All statutes, rules, regulations, orders, or
                  other requirements having the force of law and (ii) all court
                  orders and injunctions, arbitrator's decisions, and/or similar
                  rulings, in each instance ((i) and (ii)) of or by any federal,
                  state, municipal, and other governmental authority, or court,
                  tribunal, panel, or other body which has or claims
                  jurisdiction over such Person, or any property of such Person,
                  or of any other Person for whose conduct such Person would be
                  responsible.

                           (b) That Person's charter, certificate of
                  incorporation, articles of organization, and/or other
                  organizational documents, as applicable; and (c) that Person's
                  by-laws and/or other instruments which deal with corporate or
                  similar governance, as applicable.

          "RESERVE PERCENTAGE": The decimal equivalent of that rate applicable
               to the Lender under regulations issued from time to time by the
               Board of Governors of the Federal Reserve System for determining
               the maximum reserve requirement of that Lender with respect to
               "Eurocurrency liabilities" as defined in such regulations. The
               Reserve Percentage applicable to a particular Eurodollar Loan
               shall be based upon that in effect during the subject Interest
               Period, with changes in the Reserve Percentage which take effect
               during such Interest Period to take effect (and to consequently
               change any interest rate determined with reference to the Reserve
               Percentage) if and when such change is applicable to such loans.

          "REVOLVING CREDIT": Is defined in Section 2-1.

          "REVOLVING CREDIT CEILING": $8,000,000.00.

          "REVOLVING CREDIT NOTE": Is defined in Section 2-6.

          "SENIOR FUNDED DEBT": means total of (i) indebtedness or liability for
               borrowed

<PAGE>

               money; (ii) obligations as lessee under capital leases; (iii)
               obligations under letters of credit issued for the account of the
               Borrower, and (iv) obligations 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 the
               Lender on terms and conditions acceptable to the Lender.

          "STATED AMOUNT": The maximum amount for which an L/C may be honored.

          "SUSPENSION EVENT": Any occurrence, circumstance, or state of facts
               which (a) is an Event of Default; or (b) would become an Event of
               Default if any requisite notice were given and/or any requisite
               period of time were to run and such occurrence, circumstance, or
               state of facts were not absolutely cured within any applicable
               grace period.

         "TERMINATION DATE": The earliest of (a) the Maturity Date; or (b) the
                  occurrence of any event described in Section 5-9 hereof; or
                  (c) date set by notice by the Lender to the Borrower, which
                  notice sets the Termination Date on account of the occurrence
                  of any Event of Default other than as described in Section 5-9
                  hereof.

          "TOTAL FUNDED DEBT": means all borrowed money as reflected in the
               Borrower's consolidated financial statements.

          "UCC": The Uniform Commercial Code as presently in effect in
               Massachusetts (Mass. Gen. Laws, Ch. 106).

          "YEAR 2000 COMPLIANT": Computer applications, imbedded microchips, and
               other systems and subsystems which properly recognize and perform
               their intended function without any adverse effect on account of
               their respective inability to recognize certain dates prior to,
               on, and after December 31, 1999 or on account of their treating
               any date prior to, on, or after December 31, 1999 other than as
               the specific date in question.

ARTICLE 2 - THE REVOLVING CREDIT:
         2-1.     ESTABLISHMENT OF  REVOLVING CREDIT.

                  (a) The Lender hereby establishes a revolving line of credit
(the "REVOLVING CREDIT") in the Borrower's favor pursuant to which the Lender,
subject to, and in accordance with,

<PAGE>

this Agreement, shall make loans and advances and otherwise provide financial
accommodations to and for the account of the Borrower as provided herein. The
amount available for borrowing under the Revolving Credit may be repaid and
reborrowed but shall not at any time exceed the the Revolving Credit Ceiling.

                  (b) The proceeds of borrowings under the Revolving Credit
shall be used solely for working capital purposes of the Borrower and in to
cover the honoring of L/C's.

         2-2.     ESTABLISHMENT OF ACQUISITION LINE OF CREDIT.

                  (a) The Lender hereby establishes an acquisition line of
credit (the "ACQUISITION CREDIT") in the Borrower's favor pursuant to which the
Lender, subject to, and in accordance with, this Agreement, shall make loans and
advances and otherwise provide financial accommodations to and for the account
of the Borrower as provided herein. The amount available for borrowing under the
Acquisition Credit may be repaid and reborrowed but shall not exceed the
Acquisition Credit Ceiling. Mandatory repayments of the Acquisition Credit shall
also be made in accordance with subsection (c), below.

                  (b) The proceeds of borrowings under the Acquisition Credit
shall be used solely for financing of acquisitions of property, plant or
equipment, or any business or businesses to be acquired.

                  (c) Principal payments shall be made within nine (9) months of
any borrowing under the Acquisition Credit in accordance with a term facility to
be subject to such repayment terms and grant of collateral, if the grant of
collateral is otherwise required under subparagraph (d), below, as may be agreed
upon between the Lender and the Borrower.

                  (d) If any quarterly or annual financial statements furnished
by the Borrower pursuant to Section 4-3 or 4-4, below reflect the ratio of
Senior Funded Debt to EBITDA in excess of 2.5 to 1.0 at any time the Borrower
shall promptly grant to the Lender a security interest in assets satisfactory to
the Lender and the Borrower to secure the Acquisition Credit. If, thereafter, in
a subsequent quarter or year end, the Borrower's financial statements furnished
in accordance with Section 4-3 or 4-4, below evidence the ratio of Senior Funded
Debt to EBITDA of less than 2.5 to 1.0, and provided that no Event of Default is
then occurring, the Lender will release such security interests upon the request
of the Borrower.

         2-3.     LOAN REQUESTS.

                  (a) Subject to the provisions of this Agreement, a loan or
advance under the Credits duly and timely requested by the Borrower shall be
made pursuant hereto, PROVIDED THAT the Credits have not been suspended as
provided in Section 2-4(h).

                  (b) Requests for loans and advances under the Credits may be
requested by the

<PAGE>

Borrower in such manner as may from time to time be acceptable to the Lender.

                  (c) Subject to the provisions of this Agreement, the Borrower
may request a Loan and elect an interest rate and Interest Period to be
applicable to Loan by giving the Lender notice no later than the following:

                           (i) If such Loan is or is to be converted to a Prime
         Rate Loan: By 11:30AM on the Business Day on which the subject Loan is
         to be made or is to be so converted. Prime Rate Loans requested by the
         Borrower, other than those resulting from the conversion of a Libor
         Loan, shall not be less than $10,000.00.

                           (ii) If such Loan is, or is to be continued as, or
         converted to, a Libor Loan: By 1:00PM Three (3) Libor Business Days
         before the end of the then applicable Interest Period. Libor Loans and
         conversions to Libor Loans shall each be not less than $250,000.00 and
         in increments of $50,000.00 in excess of such minimum.

                           (iii) Any Libor Loan which matures while a Suspension
         Event is extant shall be converted, at the option of the Lender to a
         Prime Rate Loan notwithstanding any notice from the Borrower that such
         Loan is to be continued as a Libor Loan.

                  (d) Any request for a Loan or for the conversion of a Loan
which is made after the applicable deadline therefor, as set forth above, shall
be deemed to have been made at the opening of business on the then next Business
Day or Libor Business Day, as applicable. Each request for a Loan or for the
conversion of a Loan shall be made in such manner as may from time to time be
acceptable to the Lender

                  (e) The Borrower may request that the Lender cause the
issuance of L/C's for the account of the Borrower as provided in Section 2-11.

                  (f) The Lender may rely on any request for a loan or advance,
or other financial accommodation under the Credits which the Lender, in good
faith, believes to have been made by a Person duly authorized to act on behalf
of the Borrower and may decline to make any such requested loan or advance, or
issuance, or to provide any such financial accommodation pending the Lender's
being furnished with such documentation concerning that Person's authority to
act as may be satisfactory to the Lender.

                  (g) A request by the Borrower for loan or advance, or other
financial accommodation under the Credits shall be irrevocable and shall
constitute certification by the Borrower that as of the date of such request,
each of the following is true and correct:

                           (i) There has been no Material Adverse Change since
         the most recent financial information furnished Lender pursuant to this
         Agreement.

                           (ii) The Borrower is in compliance with, and has not
         breached any of, its covenants contained in this Agreement.

                           (iii) Each representation which is made herein or in
         any of the Loan

<PAGE>

         Documents (defined below) is then true and complete as of and as if
         made on the date of such request.

                           (iv) No Suspension Event is then extant.

              (h) Upon the occurrence from time to time of any Suspension Event:
                           (i)   The Lender may suspend the Credits immediately.
                           (ii)  The Lender shall not be obligated, during such
         suspension, to make any loans or advance, or to provide any financial
         accommodation hereunder or to seek the issuance of any L/C.

                           (iii) The Lender may suspend the right of the
         Borrower to request any Libor Loan or to convert any Prime Rate Loan to
         a Libor Loan.

         2-4. MAKING OF LOANS UNDER CREDITS.

              (a) A loan or advance under the Credits shall be made by the
transfer of the proceeds of such loan or advance to an operating account with
the Lender or as otherwise instructed by the Borrower.

              (b) A loan or advance shall be deemed to have been made under
the Credits (and the Borrower shall be indebted to the Lender for the amount
thereof immediately) at the following:

                           (i) The Lender's initiation of the transfer of the
         proceeds of such loan or advance in accordance with the Borrower's
         instructions (if such loan or advance is of funds requested by the
         Borrower).

                           (ii) The charging of the amount of such loan to the
         Loan Account (in all other circumstances).

              (c) There shall not be any recourse to or liability of the Lender,
on account of:

                           (i)  Any delay in the making of any loan or advance
         requested under the Credits.

                           (ii) Any delay in the proceeds of any such loan or
         advance constituting collected funds.

                           (iii) Any delay in the receipt, and/or any loss, of
         funds which constitute a loan or advance under the Credits, the wire
         transfer of which was properly initiated by the Lender in accordance
         with wire instructions provided to the Lender by the Borrower.

         2-5.     THE LOAN ACCOUNT.

                  (a) An account ("LOAN ACCOUNT") shall be opened on the books
of the Lender. A record may be kept in the Loan Account of all loans made under
or pursuant to this Agreement and of all payments thereon.

<PAGE>

                  (b) The Lender may also keep a record (either in the Loan
Account or elsewhere, as the Lender may from time to time elect) of all
interest, fees, service charges, costs, expenses, and other debits owed the
Lender on account of the Liabilities and of all credits against such amounts so
owed.

                  (c) All credits against the Liabilities shall be conditional
upon final payment to the Lender of the items giving rise to such credits. The
amount of any item credited against the Liabilities which is charged back
against the Lender for any reason or is not so paid shall be a Liability and
shall be added to the Loan Account, whether or not the item so charged back or
not so paid is returned.

                  (d) Except as otherwise provided herein, all fees, service
charges, costs, and expenses for which the Borrower is obligated hereunder are
payable on demand. The Lender, without the request of the Borrower, may advance
under the Credits any interest, fee, service charge, or other payment to which
the Lender is entitled from the Borrower pursuant hereto and may charge the same
to the Loan Account and shall bear interest at the Prime Rate.

                  (e) Any statement rendered by the Lender to the Borrower
concerning the Liabilities shall be considered correct and accepted by the
Borrower and shall be conclusively binding upon the Borrower unless the Borrower
provides the Lender with written objection thereto within twenty (20) days from
the mailing of such statement, which written objection shall indicate, with
particularity, the reason for such objection. The Loan Account and the Lender's
books and records concerning the loan arrangement contemplated herein and the
Liabilities shall be prima facie evidence and proof of the items described
therein.

         2-6. THE REVOLVING CREDIT NOTE. The obligation to repay loans and
advances under the Revolving Credit, with interest as provided herein, shall be
evidenced by a note (the "REVOLVING CREDIT NOTE") in the form of EXHIBIT 2-6,
annexed hereto, executed by the Borrower. Neither the original nor a copy of the
Revolving Credit Note shall be required, however, to establish or prove any
Liability. In the event that the Revolving Credit Note is ever lost, mutilated,
or destroyed, the Borrower shall execute a replacement thereof and deliver such
replacement to the Lender.

         2-7. THE ACQUISITION CREDIT NOTE. The obligation to repay loans and
advances under the Acquisition Credit, with interest as provided herein, shall
be evidenced by a note (the "ACQUISITION CREDIT NOTE") in the form of EXHIBIT
2-7, annexed hereto, executed by the Borrower. Neither the original nor a copy
of the Acquisition Credit Note shall be required, however, to establish or prove
any Liability. In the event that the Acquisition Credit Note is ever lost,
mutilated, or destroyed, the Borrower shall execute a replacement thereof and
deliver such replacement to the Lender.

<PAGE>

         2-8.     PAYMENT OF THE LOAN ACCOUNT.

                  (a) The Borrower may repay all or any portion of the principal
balance of the Loan Account from time to time until the Termination Date. Unless
notified otherwise by the Borrower, such payments shall be applied first to
Prime Rate Loans and only then to Libor Loans

                  (b) The Lender shall endeavor to cause those application of
payments (if any), pursuant to Sections 2-8(a) and 2-8(b) against Libor Loans
then outstanding in such manner as results in the least cost to the Borrower,
but shall not have any affirmative obligation to do so nor liability on account
of the Lender's failure to have done so. In no event shall action or inaction
taken by the Lender excuse the Borrower from any indemnification obligation
under Section 2-8(e).

                  (c) The Borrower shall repay the then entire unpaid balance of
the Loan Account and all other Liabilities on the Termination Date.

                  (d) The Borrower shall indemnify the Lender and hold the
Lender harmless from and against any loss, cost or expense (including loss of
anticipated profits) which the Lender may sustain or incur (including, without
limitation, by virtue of acceleration after the occurrence of any Event of
Default) as a consequence of the following:

                           (i) Default by the Borrower in payment of the
         principal amount of or any interest on any Libor Loan as and when due
         and payable, including any such loss or expense arising from interest
         or fees payable by the Lender to lenders of funds obtained by it in
         order to maintain its Libor Loans

                           (ii) Default by the Borrower in making a borrowing or
         conversion after the Borrower has given (or is deemed to have given) a
         request for a Loan or a request to convert a Loan from one applicable
         interest rate to another.

                           (iii) The making of any payment on a Libor Loan or
         the making of any conversion of any such Loan to a Prime Rate Loan on a
         day that is not the last day of the applicable Interest Period with
         respect thereto, including interest or fees payable by the Lender to
         lenders of funds obtained by it in order to maintain any such Loans as
         "breakage fees" (so-called).

         2-9.     INTEREST RATES.

                  (a) Each Loan shall bear interest at the Prime Rate unless
timely notice is given (as provided in Section 2-4(a)) that the subject Loan (or
a portion thereof) is, or is to be converted to, a Libor Loan.

                  (b) Each Loan which consists of a Libor Loan shall bear
interest at the applicable Libor Rate.

                  (c) Subject to the provisions hereof, the Borrower, by notice
to the Lender, may

<PAGE>

cause all or a part of the unpaid principal balance of the Loan Account to bear
interest at the Prime Rate or the Libor Rate as specified from time to time by
the Borrower. For ease of reference and administration, each part of the Loan
Account which bears interest at the same interest and for the same Interest
Period is referred to herein as if it were a separate " Loan".

                  (d) The Borrower shall not select, renew, or convert any
interest rate for a Loan such that, in addition to interest at the Prime Rate,
there is more than ten (10) Libor Rates applicable to the Loans at any one time.

                  (e) The Borrower shall pay accrued and unpaid interest on each
Loan in arrears as follows:
                           (i)      On the applicable Interest Payment Date for
         that Loan.
                           (ii)     On the Termination Date and on the End Date.
                           (iii)    Following the occurrence of any Event of
         Default, with such frequency as may be determined by the Lender.

                  (f) Following the occurrence of any Event of Default (and
whether or not the Lender exercises the Lender's rights on account thereof), all
Loans shall bear interest, at the option of the Lender at rate which is the
aggregate of the Prime Rate PLUS Two Percent (2%) per annum.

         2-10.    LINE (UNUSED) FEE.

                  (a) The Borrower shall pay the Lender a REVOLVING LINE
(UNUSED) FEE (so referred to herein) in arrears, on the first day of each
quarter (and on the Termination Date). The Line (Unused) Fee shall be equal to
0.25% per annum of the average difference, during the quarter just ended (or
relevant period with respect to the payment being made on the Termination Date)
between the Revolving Credit Ceiling and the unpaid principal balance of the
Loan Account attributable to the Revolving Credit.

                  (b) Commencing August 1, 2000, the Borrower shall pay the
Lender an ACQUISITION LINE (UNUSED) FEE (so referred to herein) in arrears, on
the first day of each quarter (and on the Termination Date). The Line (Unused)
Fee shall be equal to 0.25% per annum of the average difference, during the
quarter just ended (or relevant period with respect to the payment being made on
the Termination Date) between the Acquisition Credit Ceiling and the unpaid
principal balance of the Loan Account and any other promissory notes
attributable to the Acquisition Credit.

         2-11.    PROCEDURES FOR ISSUANCE OF L/C'S.

         The Borrower may request that the Lender issue L/C's for the account of
the Borrower. Each such request shall be in such manner as may from time to time
be acceptable to the Lender. The Lender may issue any L/C so requested by the
Borrower, PROVIDED THAT, at the time that the request
<PAGE>

is made, the Credits have not been suspended as provided in Section 2-4(h) and
if so issued:

                  (a) The aggregate Stated Amount of all L/C's then outstanding,
         does not exceed an amount to be determined by the Lender.

                  (b) The expiry of the L/C is not later than a date approved by
         the Lender. (c) The Borrower shall execute such additional documents
         and any such fees as may be established by the Lender in connection
         with the issuance of any L/C.

         2-12.    CHANGED CIRCUMSTANCES.

                  (a)      The Lender may give the Borrower notice of the
         occurrence of the following:
                           (i). The Lender shall have determined in good faith
         (which determination shall be final and conclusive) on any day on which
         the rate for a Libor Loan would otherwise be set, that adequate and
         fair means do not exist for ascertaining such rate.
                           (ii). The Lender shall have determined in good faith
         (which determination shall be final and conclusive) that:

                                (A) The continuation of or conversion of any
                  Loan to a Libor Loan has been made impracticable or unlawful
                  by the occurrence of a contingency that materially and
                  adversely affects the applicable market or compliance by the
                  Lender in good faith with any applicable law or governmental
                  regulation, guideline or order or interpretation or change
                  thereof by any governmental authority charged with the
                  interpretation or administration thereof or with any request
                  or directive of any such governmental authority (whether or
                  not having the force of law).

                                (B) The indices on which the interest rates for
                  Libor Loans are based shall no longer represent the effective
                  cost to the Lender for U.S. dollar deposits in the interbank
                  market for deposits in which it regularly participates.

                  (b) In the event that the Lender gives the Borrower notice of
an occurrence described in Section 2-12(a), then, until the Lender notifies the
Borrower that the circumstances giving rise to such notice no longer apply:

                           (i) The obligation of the Lender to make Libor Loans
         of the type affected by such changed circumstances or to permit the
         Borrower to select the affected interest rate as otherwise applicable
         to any Loans shall be suspended.

                           (ii) Any notice which the Borrower had given the
         Lender with respect to any Libor Loan, the time for action with respect
         to which has not occurred prior to the Lender's having given notice
         pursuant to Section 2-12(a), shall be deemed at the option of the
         Lender to not having been given.

         2-13. INCREASED COSTS. If, as a result of any requirement of law, or of
the

<PAGE>

interpretation or application thereof by any court or by any governmental or
other authority or entity charged with the administration thereof, whether or
not having the force of law, which:

                  (a) subjects the Lender to any taxes or changes the basis of
         taxation, or increases any existing taxes, on payments of principal,
         interest or other amounts payable by the Borrower to the Lender under
         this Agreement (except for taxes on the Lender's overall net income or
         capital imposed by the jurisdiction in which the Lender's principal or
         lending offices are located);

                  (b) imposes, modifies or deems applicable any reserve, cash
         margin, special deposit or similar requirements against assets held by,
         or deposits in or for the account of or loans by or any other
         acquisition of funds by the relevant funding office of the Lender;

                  (c). imposes on the Lender any other condition with respect to
         any Loan Document; or

                  (d) imposes on the Lender a requirement to maintain or
         allocate capital in relation to the Liabilities;
and the result of any of the foregoing, in the Lender's reasonable opinion, is
to increase the cost to the Lender of making or maintaining any loan, advance or
financial accommodation or to reduce the income receivable by the Lender in
respect of any loan, advance or financial accommodation by an amount which the
Lender deems to be material, then upon the Lender's giving written notice
thereof, from time to time, to the Borrower (such notice to set out in
reasonable detail the facts giving rise to and a summary calculation of such
increased cost or reduced income), the Borrower shall forthwith pay to the
Lender , upon receipt of such notice, that amount which shall compensate the
Lender for such additional cost or reduction in income.

ARTICLE 3 - GENERAL REPRESENTATIONS, COVENANTS AND WARRANTIES:

         To induce the Lender to establish the loan arrangement contemplated
herein and to make loans and advances and to provide financial accommodations
under the Credits (each of which loans shall be deemed to have been made in
reliance thereupon) the Borrower, in addition to all other representations,
warranties, and covenants made by the Borrower in any other Loan Document, makes
those representations, warranties, and covenants included in this Agreement.

         3-1.     PAYMENT AND PERFORMANCE OF LIABILITIES.

                  The Borrower shall pay each Liability when due (or when
demanded if payable on demand) and shall promptly, punctually, and faithfully
perform each other Liability.

<PAGE>

         3-2.     DUE ORGANIZATION - CORPORATE AUTHORIZATION - NO CONFLICTS.

                  (a) UFP presently is and shall hereafter remain in good
standing as a Delaware corporation. MFT presently is and shall hereafter remain
in good standing as a Maine corporation. The Borrower is and shall hereafter
remain duly qualified and in good standing in every other State in which, by
reason of the nature or location of the Borrower's assets or operation of the
Borrower's business, such qualification may be necessary. The Borrower is not an
"Investment Company" withing the meaning of the Investment Company Act.

                  (b) Each Related Entity is listed on EXHIBIT 3-2, annexed
hereto. Each Related Entity is and shall hereafter remain in good standing in
the State in which incorporated and is and shall hereafter remain duly qualified
in which other State in which, by reason of that entity's assets or the
operation of such entity's business, such qualification may be necessary. The
Borrower shall provide the Lender with prior written notice of any entity's
becoming or ceasing to be a Related Entity.

                  (c) The Borrower shall not change its State of incorporation
nor its taxpayer identification number.

                  (d) The Borrower has all requisite corporate power and
authority to execute and deliver all Loan Documents to which the Borrower is a
party and has and will hereafter retain all requisite corporate power to perform
all Liabilities.

                  (e) The execution and delivery by the Borrower of each Loan
Document to which it is a party; the Borrower's consummation of the transactions
contemplated by such Loan Documents (including, without limitation, the creation
of security interests by the Borrower as contemplated hereby); the Borrower's
performance under those of the Loan Documents to which it is a party; the
borrowings hereunder; and the use of the proceeds thereof:

                           (i)   Have been duly authorized by all necessary
         corporate action.
                           (ii)  Do not, and will not, contravene in any
         material respect any provision of any Requirement of Law or obligation
         of the Borrower.

                           (iii) Will not result in the creation or imposition
         of, or the obligation to create or impose, any Encumbrance upon any
         assets of the Borrower pursuant to any Requirement of Law or
         obligation, except pursuant to the Loan Documents.

                  (f) The Loan Documents have been duly executed and delivered
by Borrower and are the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective terms.

         3-3. DEPOSIT ACCOUNT. In order to permit the Lender to monitor the
Borrower's financial condition and compliance with this Agreement, the Borrower
shall maintain its primary deposit

<PAGE>

account with the Lender.

         3-4.     YEAR 2000 COMPLIANCE.

                  (a) The Borrower has (i) undertaken a detailed inventory,
review, and assessment of all areas within its business and operations that
could be adversely affected by the failure of the Borrower to be Year 2000
Compliant on a timely basis; (ii) developed a detailed plan and timeline for
becoming Year 2000 Compliant on a timely basis; and (iii) to date, implemented
that plan in accordance with that timetable in all material respects. The
Borrower reasonably anticipates that it will be Year 2000 Compliant on a timely
basis.

         3-5. TITLE TO ASSETS. The Borrower is, and shall hereafter remain, the
owner its assets free and clear of all Encumbrances with the exceptions of
Permitted Encumbrances, which include those Encumbrances described on EXHIBIT
3-5, annexed hereto.

         3-6. INDEBTEDNESS. The Borrower does not and shall not hereafter have
any Indebtedness with the exceptions of:

                  (a) Any Indebtedness to the Lender .

                  (b) The Indebtedness (if any) listed on EXHIBIT 3-6, annexed
hereto.

         3-7. INSURANCE POLICIES.

              (a) EXHIBIT 3-7, annexed hereto, is a schedule of all insurance
policies owned by the Borrower or under which the Borrower is the named insured.
Each of such policies is in full force and effect. Neither the issuer of any
such policy nor the Borrower is in default or violation of any such policy.

              (b) The Borrower shall have and maintain at all times insurance
covering such risks, in such amounts, containing such terms, in such form, for
such periods, and written by such companies as may be satisfactory to the Lender
 . The coverage reflected on EXHIBIT 3-7 presently satisfies the foregoing
requirements, it being recognized by the Borrower, HOWEVER, that such
requirements may change hereafter to reflect changing circumstances.

         3-8. REQUIREMENTS OF LAW. The Borrower is in compliance with, and shall
hereafter comply with and use its assets in compliance with, all Requirements of
Law. The Borrower has not received any notice of any violation of any
Requirement of Law (whether or not such violation is material), which violation
has not been cured or otherwise remedied.

         3-9. MAINTAIN PROPERTIES. The Borrower shall:

<PAGE>

              (a) Keep its assets in good order and repair (ordinary reasonable
wear and tear and insured casualty excepted).

              (b) Not suffer or cause the waste or destruction of any material
part of its assets.

              (c) Not use any of its assets in violation of any policy of
insurance thereon.

              (d) Except in the ordinary course of business, not sell, lease, or
otherwise dispose of any of its assets, other than the following:

                  (i)   The sale of Inventory in compliance with this Agreement.

                  (ii)  The disposal of Equipment which is obsolete, worn out,
         or damaged beyond repair, which Equipment is replaced to the extent
         necessary to preserve or improve the operating efficiency of the
         Borrower.

         3-10. PAY TAXES.

                  (a) Except as disclosed on EXHIBIT 3-10, there are no
examinations of or with respect to the Borrower presently being conducted by the
Internal Revenue Service or any other taxing authority.

                  (b) The Borrower has, and hereafter shall: pay, as they become
due and payable, all taxes and unemployment contributions and other charges of
any kind or nature levied, assessed or claimed against the Borrower or its
assets by any person or entity whose claim could result in an Encumbrance upon
any asset of the Borrower or by any governmental authority; properly exercise
any trust responsibilities imposed upon the Borrower by reason of withholding
from employees' pay or by reason of the Borrower's receipt of sales tax or other
funds for the account of any third party; timely make all contributions and
other payments as may be required pursuant to any Employee Benefit Plan now or
hereafter established by the Borrower; and timely file all tax and other returns
and other reports with each governmental authority to whom the Borrower is
obligated to so file PROVIDED, HOWEVER, the Borrower may timely contest in good
faith and by appropriate proceedings, any amount which it is obligated to pay as
provided in this Section 3-10(b), but only if and for so long as no lien on any
of its assets is filed with respect to any such amount.

         3-11. NO MARGIN STOCK. Except for credit extended under the Borrower's
option plans, the Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying any margin stock (within the meaning
of Regulations U, T, and X of the Board of Governors of the Federal Reserve
System of the United States). No part of the proceeds of any borrowing hereunder
will be used at any time to purchase or carry any such margin stock or to extend
credit to others for the purpose of purchasing or carrying any such margin
stock.

         3-12. ERISA. Neither the Borrower nor any ERISA Affiliate ever has or
hereafter shall:

<PAGE>

              (a) Violate or fail to be in full compliance with the Borrower's
Employee Benefit Plan.

              (b) Fail timely to file all reports and filings required by ERISA
to be filed by the Borrower.

              (c) Engage in any "prohibited transactions" or "reportable events"
(respectively as described in ERISA).

              (d) Engage in, or commit, any act such that a tax or penalty could
be imposed upon the Borrower on account thereof pursuant to ERISA.

              (e) Accumulate any material funding deficiency within the meaning
of ERISA. (f) Terminate any Employee Benefit Plan such that a lien could be
asserted against any assets of the Borrower on account thereof pursuant to
ERISA.

              (g) Be a member of, contribute to, or have any obligation under
any Employee Benefit Plan which is a multiemployer plan within the meaning of
Section 4001(a) of ERISA.

         3-13.    HAZARDOUS MATERIALS.
                  (a)  The Borrower has never:

                       (i)  Been legally responsible for any release or threat
         of release of any Hazardous Material.

                       (ii) Received notification of any release or threat of
         release of any Hazardous Material from any site or vessel occupied or
         operated by the Borrower and/or of the incurrence of any expense or
         loss in connection with the assessment, containment, or removal of any
         release or threat of release of any Hazardous Material from any such
         site or vessel.

                  (b)  The Borrower shall:

                       (i) Dispose of any Hazardous Material only in compliance
         with all Environmental Laws.

                       (ii) Not store on any site or vessel occupied or operated
         by the Borrower and not transport or arrange for the transport of any
         Hazardous Material, except if such storage or transport is in the
         ordinary course of the Borrower's business and is in compliance with
         all Environmental Laws.

                  (c) The Borrower shall provide the Lender with written notice
upon the Borrower's obtaining knowledge of any incurrence of any expense or loss
by any governmental authority or other Person in connection with the assessment,
containment, or removal of any Hazardous Material, for which expense or loss the
Borrower may be liable.

         3-14. LITIGATION. Except as described in EXHIBIT 3-14, annexed hereto,
there is not

<PAGE>

presently pending or threatened by or against the Borrower any suit, action,
proceeding, or investigation which, if determined adversely to the Borrower,
would result in a Material Adverse Change.

         3-15. LOANS. The Borrower shall not make any loans or advances to, nor
acquire the Indebtedness of, any Person, PROVIDED, HOWEVER, the foregoing does
not prohibit any of the following:

               (a) Advance payments made to the Borrower's suppliers in the
ordinary course.

               (b) Advances to the Borrower's officers, employees, and
salespersons with respect to reasonable expenses to be incurred by such
officers, employees, and salespersons for the benefit of the Borrower, which
expenses are properly substantiated by the person seeking such advance and
properly reimbursable by the Borrower.

               (c) Loans which in the aggregate do not exceed $50,000.00 of
outstanding at any time.

               (d) Loans described on EXHIBIT 3-15, annexed hereto.

         3-16. PROTECTION OF ASSETS. The Lender, in the Lender's discretion, and
from time to time, may discharge any tax or Encumbrance on any of its assets, or
take any other action that the Lender may deem necessary or desirable to repair,
insure, maintain, preserve, collect, or realize upon any of its assets. The
Lender shall not have any obligation to undertake any of the foregoing and shall
have no liability on account of any action so undertaken except where there is a
specific finding in a judicial proceeding (in which the Lender has had an
opportunity to be heard), from which finding no further appeal is available,
that the Lender had acted in actual bad faith or in a grossly negligent manner.
The Borrower shall pay to the Lender, on demand, or the Lender, in its
discretion, may add to the Loan Account, all amounts paid or incurred by the
Lender pursuant to this section. The obligation of the Borrower to pay such
amounts is a Liability.

         3-17. AFFILIATE TRANSACTIONS. The Borrower shall not make any payment,
nor give any value to any Related Entity except for goods and services actually
purchased by the Borrower from, or sold by the Borrower to, such Related Entity
for a price and on terms which shall

               (a) be competitive and fully deductible as an "ordinary and
necessary business expense" and/or fully depreciable under the Internal Revenue
Code of 1986 and the Treasury Regulations, each as amended; and

               (b) no be less favorable from those which would have been charged
in an arms length transaction.

<PAGE>

         3-18. ADEQUACY OF DISCLOSURE.

               (a) All financial statements furnished to the Lender by the
Borrower have been prepared in accordance with GAAP consistently applied and
present fairly the condition of the Borrower at the date(s) thereof and the
results of operations and cash flows for the period(s) covered. There has been
no change in the financial condition, results of operations, or cash flows of
the Borrower since the date(s) of such financial statements, other than changes
in the ordinary course of business, which changes have not been materially
adverse, either singularly or in the aggregate.

               (b) The Borrower does not have any contingent obligations or
obligation under any Lease or Capital Lease which is not noted in the Borrower's
financial statements furnished to the Lender prior to the execution of this
Agreement.

               (c) No document, instrument, agreement, or paper now or hereafter
given the Lender by or on behalf of the Borrower in connection with the
execution of this Agreement by the Lender contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements therein not misleading. There is no
fact known to the Borrower which has, or which, in the foreseeable future could
have result in a Material Adverse Change which has not been disclosed in writing
to the Lender.

         3-19. OTHER COVENANTS. The Borrower shall not indirectly do or cause to
be done any act which, if done directly by the Borrower, would breach any
covenant contained in this Agreement.

ARTICLE 4 - FINANCIAL REPORTING AND PERFORMANCE COVENANTS:

          4-1. MAINTAIN RECORDS. The Borrower shall:

               (a) At all times, keep proper books of account, in which full,
true, and accurate entries shall be made of all of the Borrower's transactions,
all in accordance with GAAP applied consistently with prior periods to fairly
reflect the financial condition of the Borrower at the close of, and its results
of operations for, the periods in question.

               (b) Timely provide the Lender with those financial reports,
statements, and schedules required by this Article 4 or otherwise, each of which
reports, statements and schedules shall be prepared, to the extent applicable,
in accordance with GAAP applied consistently with prior periods to fairly
reflect the financial condition of the Borrower at the close of, and its results
of operations for, the period(s) covered therein.

               (c) At all times, retain independent certified public accountants
who are

<PAGE>

reasonably satisfactory to the Lender and instruct such accountants to fully
cooperate with, and be available to, the Lender to discuss the Borrower's
financial performance, financial condition, operating results, controls, and
such other matters, within the scope of the retention of such accountants, as
may be raised by the Lender.

         4-2. ACCESS TO RECORDS. The Borrower shall accord the Lender and the
Lender's representatives with access from time to time upon forty-eight (48)
hours prior notice from the Lender, prior to the occurrence of any Event of
Default and thereafter without notice, as the Lender and such representatives
may require to all properties owned by or over which the Borrower has control.
The Lender and the Lender's representatives shall have the right, and the
Borrower will permit the Lender and such representatives from time to time as
the Lender and such representatives may request, to examine, inspect, copy, and
make extracts from any and all of the Borrower's books, records, electronically
stored data, papers, and files. The Borrower shall make all of the Borrower's
copying facilities available to the Lender.

         4-3. QUARTERLY REPORTS. Quarterly, within Forty Five (45) days
following the end of each of the Borrower's fiscal quarters, the Borrower shall
provide the Lender with an original counterpart of a management prepared
financial statement of the Borrower for the period from the beginning of the
Borrower's then current fiscal year through the end of the subject quarter, with
comparative information for the same period of the previous fiscal year, which
statement shall include, at a minimum, a balance sheet, income statement,
statement of changes in shareholders' equity, and cash flows and comparisons for
the corresponding quarter of the then immediately previous year.

         4-4. ANNUAL REPORTS.

              (a) Annually, within ninety (90) days following the end of the
Borrower's fiscal year, the Borrower shall furnish the Lender with an original
signed counterpart of the Borrower's annual financial statement, which statement
shall have been prepared by, and bear the unqualified opinion of, the Borrower's
independent certified public accountants (i.e. said statement shall be
"certified" by such accountants). Such annual statement shall include, at a
minimum (with comparative information for the then prior fiscal year) a balance
sheet, income statement, statement of changes in shareholders' equity, and cash
flows.

              (b) Each annual statement shall be accompanied by such
accountant's Certificate indicating that, in the preparation of such annual
statement, such accountants did not conclude that any Suspension Event had
occurred during the subject fiscal year (or if one or more had occurred, the
facts and circumstances thereof).

<PAGE>

         4-5. OFFICERS' CERTIFICATES. The Borrower shall cause the
Borrower's Chief Financial Officer to provide such Person's Certificate with
those quarterly and annual statements to be furnished pursuant to this
Agreement, which Certificate shall:

              (a) Indicate that the subject statement was prepared in accordance
with GAAP consistently applied and presents fairly the financial condition of
the Borrower at the close of, and the results of the Borrower's operations and
cash flows for, the period(s) covered, SUBJECT, HOWEVER to the following:

                  (i) usual year end adjustments (this exception shall not be
         included in the Certificate which accompanies such annual statement).

                  (ii) Material Accounting Changes (in which event, such
         Certificate shall include a schedule (in reasonable detail) of the
         effect of each such Material Accounting Change) not previously
         specifically taken into account in the determination of the financial
         performance covenant imposed pursuant to Section 4-7.

              (b) Indicate either that (i) no Suspension Event has occurred or
(ii) if such an event has occurred, its nature (in reasonable detail) and the
steps (if any) being taken or contemplated by the Borrower to be taken on
account thereof.

              (c) Include calculations concerning the Borrower's compliance (or
failure to comply) at the date of the subject statement with each of the
financial performance covenants included in Section 4-7 hereof.

         4-6. ADDITIONAL FINANCIAL INFORMATION.

              (a) In addition to all other information required to be provided
pursuant to this Article 4, the Borrower promptly shall provide the Lender, with
such other and additional information concerning the Borrower, its assets, the
operation of the Borrower's business, and the Borrower's financial condition,
including original counterparts of financial reports and statements, as the
Lender may from time to time reasonably request from the Borrower.

              (b) The Borrower may provide the Lender, from time to time
hereafter, with updated projections of the Borrower's anticipated performance
and operating results.

              (c) In all events, annually, within ninety (90) days following
the end of the Borrower's fiscal year, the Borrower shall furnish the Lender
with an updated and extended projection which shall go out at least through the
end of the then next fiscal year.

         4-7. FINANCIAL PERFORMANCE COVENANTS. The Borrower shall observe and
comply with those financial performance covenants set forth on EXHIBIT 4-7,
annexed hereto. Compliance with such financial performance covenants shall be
made as if no Material Accounting Changes had

<PAGE>

been made (other than any Material Accounting Changes specifically taken into
account in the setting of such covenants). The Lender may determine the
Borrower's compliance with such covenants based upon financial reports and
statements provided by the Borrower to the Lender (whether or not such
financial reports and statements are required to be furnished pursuant to
this Agreement) as well as by reference to interim financial information
provided to, or developed by, the Lender.

ARTICLE 5 - EVENTS OF DEFAULT:

         The occurrence of any event described in this Article 5 respectively
shall constitute an "EVENT OF DEFAULT" herein. Upon the occurrence of any Event
of Default described in Section 5-9, any and all Liabilities shall become due
and payable without any further act on the part of the Lender. Upon the
occurrence of any other Event of Default, any and all Liabilities shall become
immediately due and payable, at the option of the Lender and without notice or
demand. The occurrence of any Event of Default shall also constitute, without
notice or demand, a default under all other agreements between the Lender and
the Borrower and instruments and papers given the Lender by the Borrower,
whether such agreements, instruments, or papers now exist or hereafter arise.

         5-1. FAILURE TO PAY CREDITS. The failure by the Borrower to pay any
amount within three (3) business days of when due under the Credits.

         5-2. FAILURE TO MAKE OTHER PAYMENTS. The failure by the Borrower to pay
within three (3) business days of when due(or within three (3) business days of
demand, if payable on demand) any payment Liability other than under the
Credits.

         5-3. FAILURE TO PERFORM COVENANT OR LIABILITY (GRACE PERIOD). The
failure by the Borrower, upon Thirty (30) days written notice by the Lender , to
cure the Borrower's failure to promptly, punctually and faithfully perform,
discharge, or comply with any covenant or Liability not described in Sections
5-1 or 5-2 hereof.

         5-4. MISREPRESENTATION. Any representation or warranty at any time made
by the Borrower to the Lender, was not true or complete in all material respects
when given.

         5-5. ACCELERATION OF OTHER DEBT. BREACH OF LEASE. The occurrence of any
event such that

<PAGE>

any Indebtedness in excess of $50,000.00 to any creditor other than the Lender
has been accelerated.

         5-6. DEFAULT UNDER OTHER AGREEMENTS. The occurrence of any breach or
default under any agreement between the Lender and the Borrower or instrument or
paper given the Lender by the Borrower, whether such agreement, instrument, or
paper now exists or hereafter arises (notwithstanding that the Lender may not
have exercised its rights upon default under any such other agreement,
instrument or paper).

         5-7. UNINSURED CASUALTY LOSS. The occurrence of any uninsured loss,
theft, damage, or destruction of or to any material portion of the Borrower's
assets.

         5-8. JUDGMENT. RESTRAINT OF BUSINESS.

              (a) The service of process upon the Lender or any Participant
seeking to attach, by trustee, mesne, or other process, any of the Borrower's
funds in excess of $50,000.00 on deposit with, or assets of the Borrower in the
possession of, the Lender or such Participant.

              (b) The entry of any judgment against the Borrower in excess of
$50,000.00, which judgment is not satisfied (if a money judgment) or appealed
from (with execution or similar process stayed) within fifteen (15) days of its
entry.

         5-9. BUSINESS FAILURE. Any act by, against, or relating to the
Borrower, or its property or assets, which act constitutes the application for,
consent to, or sufferance of the appointment of a receiver, trustee, or other
person, pursuant to court action or otherwise, over all, or any part of the
Borrower's property; the granting of any trust mortgage or execution of an
assignment for the benefit of the creditors of the Borrower, or the occurrence
of any other voluntary or involuntary liquidation or extension of debt agreement
for the Borrower; the offering by or entering into by the Borrower of any
composition, extension, or any other arrangement seeking relief from or
extension of the debts of the Borrower; or the initiation of any judicial or
non-judicial proceeding or agreement by, against, or including the Borrower
which seeks or intends to accomplish a reorganization or arrangement with
creditors; and/or the initiation by or on behalf of the Borrower of the
liquidation or winding up of all or any part of the Borrower's business or
operations.

         5-10. BANKRUPTCY. The failure by the Borrower to generally pay the
debts of the Borrower as they mature; adjudication of bankruptcy or insolvency
relative to the Borrower; the entry of an order for relief or similar order with
respect to the Borrower in any proceeding pursuant to the Bankruptcy Code or any
other federal bankruptcy law; the filing of any complaint, application, or
petition by the Borrower initiating any matter in which the Borrower is or may
be granted any relief

<PAGE>

from the debts of the Borrower pursuant to the Bankruptcy Code or any other
insolvency statute or procedure; the filing of any complaint, application, or
petition against the Borrower initiating any matter in which the Borrower is or
may be granted any relief from the debts of the Borrower pursuant to the
Bankruptcy Code or any other insolvency statute or procedure, which complaint,
application, or petition is not timely contested in good faith by the Borrower
by appropriate proceedings or, if so contested, is not dismissed within sixty
(60) days of when filed.

         5-11. MATERIAL ADVERSE CHANGE. The occurrence of any Material Adverse
Change.

         5-12. INDICTMENT - FORFEITURE. The indictment of, or institution of any
legal process or proceeding against, the Borrower, under any federal, state,
municipal, and other civil or criminal statute, rule, regulation, order, or
other requirement having the force of law where the relief, penalties, or
remedies sought or available include the forfeiture of any property of the
Borrower and/or the imposition of any stay or other order, the effect of which
could be to restrain in any material way the conduct by the Borrower of its
business in the ordinary course.

         5-13.    CHANGE IN CONTROL.        Any Change in Control.

ARTICLE 6 - RIGHTS AND REMEDIES UPON DEFAULT:

         In addition to all of the rights, remedies, powers, privileges, and
discretions which the Lender is provided prior to the occurrence of an Event of
Default, the Lender shall have the following rights and remedies upon the
occurrence of any Event of Default and at any time thereafter. No stay which
otherwise might be imposed pursuant to Section 362 of the Bankruptcy Code or
otherwise shall stay, limit, prevent, hinder, delay, restrict, or otherwise
prevent the Lender's exercise of any of such rights and remedies.

          6-1. RIGHTS OF ENFORCEMENT. The Lender shall have the right to
exercise all or any of the rights, remedies, powers, privileges, and discretions
under all or any of the Loan Documents.

         6-2. RIGHTS AND REMEDIES. The rights, remedies, powers, privileges, and
discretions of the Lender hereunder (herein, the " LENDER'S RIGHTS AND
REMEDIES") shall be cumulative and not exclusive of any rights or remedies which
it would otherwise have. No delay or omission by the Lender in exercising or
enforcing any of the Lender's Rights and Remedies shall operate as, or
constitute, a waiver thereof. No waiver by the Lender of any Event of Default or
of any default under

<PAGE>

any other agreement shall operate as a waiver of any other default hereunder or
under any other agreement. No single or partial exercise of any of the Lender's
Rights or Remedies, and no express or implied agreement or transaction of
whatever nature entered into between the Lender and any person, at any time,
shall preclude the other or further exercise of the Lender 's Rights and
Remedies. No waiver by the Lender of any of the Lender's Rights and Remedies on
any one occasion shall be deemed a waiver on any subsequent occasion, nor shall
it be deemed a continuing waiver. All of the Lender's Rights and Remedies and
all of the Lender's rights, remedies, powers, privileges, and discretions under
any other agreement or transaction are cumulative, and not alternative or
exclusive, and may be exercised by the Lender at such time or times and in such
order of preference as the Lender in its sole discretion may determine. The
Lender's Rights and Remedies may be exercised without resort or regard to any
other source of satisfaction of the Liabilities.

ARTICLE 7 - NOTICES:

         7-1. NOTICE ADDRESSES. All notices, demands, and other communications
made in respect of this Agreement (other than a request for a loan or advance or
other financial accommodation under the Credits) shall be made to the following
addresses, each of which may be changed upon seven (7) days written notice to
all others given by certified mail, return receipt requested:

If to the Lender:

                                    Citizens Bank of Massachusetts
                                    28 State Street
                                    Boston, Massachusetts 02108
                                    Attention   :  Mr. Randall L. Kutch
                                                   Vice President
                                    Fax         :  617 725-5693

         WITH A COPY TO:

                                    Riemer & Braunstein LLP
                                    Three Center Plaza
                                    Boston, Massachusetts  02108
                                    Attention   :  Robert E. Paul, Esquire
                                    Fax         :  617 880-3456

If to the Borrower:

                                    UFP Technologies, Inc.
                                    172 East Main Street
                                    Georgetown, Massachusetts 01833

<PAGE>

                                    Attention   :  Mr. Ronald Lataille
                                    Fax         :  978 352-5616

         WITH A COPY TO:            Lynch, Brewer, Hoffman & Sands, LLP
                                    101 Federal Street
                                    Boston, Massachusetts 02110
                                    Attention   : Owen B. Lynch, Esquire
                                    Fax:        :617 951-0811

         7-2.     NOTICE GIVEN.

                  (a) Except as otherwise specifically provided herein, notices
shall be deemed made and correspondence received, as follows (all times being
local to the place of delivery or receipt):

                           (i) By mail: the sooner of when actually received or
         Three (3) days following deposit in the United States mail, postage
         prepaid.

                           (ii) By recognized overnight express delivery: the
         Business Day following the day when sent.

                           (iii) By Hand: If delivered on a Business Day after
         9:00 AM and no later than Three (3) hours prior to the close of
         customary business hours of the recipient, when delivered.

         Otherwise, at the opening of the then next Business Day.

                           (iv) By Facsimile transmission (which must include a
         header on which the party sending such transmission is indicated): If
         sent on a Business Day after 9:00 AM and no later than Three (3) hours
         prior to the close of customary business hours of the recipient, one
         (1) hour after being sent. Otherwise, at the opening of the then next
         Business Day.

                  (b) Rejection or refusal to accept delivery and inability to
deliver because of a changed address or Facsimile Number for which no due notice
was given shall each be deemed receipt of the notice sent.

ARTICLE 8 - TERM:

         8-1.     TERMINATION OF CREDITS.

                  (a) The Credits shall remain in effect (subject to suspension
as provided in Section 2-3(h) hereof) until the Termination Date.

                  (b) On the Termination Date, the Borrower shall pay the Lender
(whether or not then due), in immediately available funds, the then entire
balance of the Loan Account; all accrued and unpaid interest thereon; any
payments due on account of the indemnification obligations included in Section
2-8(e);and shall make such arrangements concerning any L/C's then outstanding
are reasonably satisfactory to the Lender.

<PAGE>

         8-2. PAYMENT S AT MATURITY Until all payments due under this Agreement
have been paid or provided for in accordance with Section 8-1, all provisions of
this Agreement, other than those contained in Article 2 which place an
obligation on the Lender to make any loans or advances or to provide financial
accommodations under the Credits or otherwise, shall remain in full force and
effect until all Liabilities shall have been paid in full.

ARTICLE 9 - GENERAL:

         9-1. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Borrower and the Borrower's representatives, successors, and assigns and shall
enure to the benefit of the Lender and the Lender's successors and assigns. In
the event that the Lender assigns or transfers its rights under this Agreement,
the assignee shall thereupon succeed to and become vested with all rights,
powers, privileges, and duties of the Lender hereunder and the Lender shall
thereupon be discharged and relieved from its duties and obligations hereunder.

         9-2. SEVERABILITY. Any determination that any provision of this
Agreement or any application thereof is invalid, illegal, or unenforceable in
any respect in any instance shall not affect the validity, legality, or
enforceability of such provision in any other instance, or the validity,
legality, or enforceability of any other provision of this Agreement.

         9-3.     AMENDMENTS.  COURSE OF DEALING.

                  (a) This Agreement and the other Loan Documents incorporate
all discussions and negotiations between the Borrower and the Lender, either
express or implied, concerning the matters included herein and in such other
instruments, any custom, usage, or course of dealings to the contrary
notwithstanding. No such discussions, negotiations, custom, usage, or course of
dealings shall limit, modify, or otherwise affect the provisions thereof. No
failure by the Lender to give notice to the Borrower of the Borrower's having
failed to observe and comply with any warranty or covenant included in any Loan
Document shall constitute a waiver of such warranty or covenant or the amendment
of the subject Loan Document. No change made by the Lender in the manner by
which Availability is determined shall obligate the Lender to continue to
determine Availability in that manner.

                  (b) The Borrower may undertake any action otherwise prohibited
hereby, and may omit to take any action otherwise required hereby, upon and with
the express prior written consent of the Lender. No consent, modification,
amendment, or waiver of any provision of any Loan Document shall be effective
unless executed in writing by or on behalf of the party to be charged with such
modification, amendment, or waiver (and if such party is the Lender, then by a

<PAGE>

duly authorized officer thereof). Any modification, amendment, or waiver
provided by the Lender shall be in reliance upon all representations and
warranties theretofore made to the Lender by or on behalf of the Borrower and
consequently may be rescinded in the event that any of such representations or
warranties was not true and complete in all material respects when given.

         9-4.     LENDER'S COSTS AND EXPENSES.

                  (a) The Borrower shall pay on demand all Costs of Collection
and all reasonable expenses of the Lender in connection with the preparation,
execution, and delivery of this Agreement and of any other Loan Documents,
whether now existing or hereafter arising, and all other reasonable expenses
which may be incurred by the Lender in preparing or amending this Agreement and
all other agreements, instruments, and documents related thereto, or otherwise
incurred with respect to the Liabilities, and all costs and expenses of the
Lender which relate to the credit facility contemplated hereby.

                  (b) The Borrower authorizes the Lender to pay all such fees
and expenses and in the Lender's discretion, to add such reasonable fees and
expenses to the Loan Account.

                  (c) The undertaking on the part of the Borrower in this
Section 9-4 shall survive payment of the Liabilities and/or any termination,
release, or discharge executed by the Lender in favor of the Borrower, other
than a termination, release, or discharge which makes specific reference to this
Section 9-4.

         9-5. COPIES AND FACSIMILES. This Agreement and all documents which
relate thereto, which have been or may be hereinafter furnished the Lender may
be reproduced by the Lender by any photographic, microfilm, xerographic, digital
imaging, or other process, and the Lender may destroy any document so
reproduced. Any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made in the
regular course of business). Any facsimile which bears proof of transmission
shall be binding on the party which or on whose behalf such transmission was
initiated and likewise shall be so admissible in evidence as if the original of
such facsimile had been delivered to the party which or on whose behalf such
transmission was received.

         9-6. MASSACHUSETTS LAW. This Agreement and all rights and obligations
hereunder, including matters of construction, validity, and performance, shall
be governed by the laws of The Commonwealth of Massachusetts.

         9-7. CONSENT TO JURISDICTION.

<PAGE>

              (a) The Borrower agrees that any legal action, proceeding, case,
or controversy against the Borrower with respect to any Loan Document may be
brought in the Superior Court of Suffolk County Massachusetts. By execution and
delivery of this Agreement, the Borrower, for itself and in respect of its
property, accepts, submits, and consents generally and unconditionally, to the
jurisdiction of the aforesaid courts.

              (b) The Borrower agrees that any action commenced by the Borrower
asserting any claim or counterclaim arising under or in connection with this
Agreement or any other Loan Document shall be brought solely in the Superior
Court of Suffolk County, sitting in Boston, Massachusetts, and that such Courts
shall have exclusive jurisdiction with respect to any such action.

         9-8. INDEMNIFICATION. The Borrower shall indemnify, defend, and hold
the Lender and any employee, officer, or agent of the Lender (each, an
"INDEMNIFIED PERSON") harmless of and from any claim brought or threatened
against any Indemnified Person by the Borrower, or any other Person (as well as
from attorneys' reasonable fees and expenses in connection therewith) on account
of the relationship of the Borrower with the Lender (each of claims which may be
defended, compromised, settled, or pursued by the Indemnified Person with
counsel of the Lender's selection, but at the expense of the Borrower) other
than any claim as to which a final determination is made in a judicial
proceeding (in which the Lender and any other Indemnified Person has had an
opportunity to be heard), which determination includes a specific finding that
the Indemnified Person seeking indemnification had acted in a grossly negligent
manner or in actual bad faith. This indemnification shall survive payment of the
Liabilities and/or any termination, release, or discharge executed by the Lender
in favor of the Borrower, other than a termination, release, or discharge which
makes specific reference to this Section 9-8.

         9-9. RULES OF CONSTRUCTION. The following rules of construction shall
be applied in the interpretation, construction, and enforcement of this
Agreement and of the other Loan Documents:

              (a) Words in the singular include the plural and words in the
plural include the singular.

              (b) Titles, headings (indicated by being UNDERLINED or shown in
Small Capitals) and any Table of Contents are solely for convenience of
reference; do not constitute a part of the instrument in which included; and do
not affect such instrument's meaning, construction, or effect.

              (c) The words "includes" and "including" are not limiting.

              (d) Text which follows the words "including, without limitation"
(or similar words) is illustrative and not limitational.

              (e) Except where the context otherwise requires or where the
relevant

<PAGE>

subsections are joined by "or", compliance with any Section or provision of any
Loan Document which constitutes a warranty or covenant requires compliance with
all subsections (if any) of that Section or provision. Except where the context
otherwise requires, compliance with any warranty or covenant of any Loan
Document which includes subsections which are joined by "or" may be accomplished
by compliance with any of such subsections.

              (f) Text which is shown in ITALICS, shown in BOLD, shown IN ALL
CAPITAL LETTERS, or in any combination of the foregoing, shall be deemed to be
conspicuous.

              (g) The words "may not" are prohibitive and not permissive.

              (h) The word "or" is not exclusive.

              (i) Any reference to a Person's "knowledge" (or words of similar
import) are to such Person's knowledge assuming that such Person has undertaken
reasonable and diligent investigation with respect to the subject of such
"knowledge" (whether or not such investigation has actually been undertaken).

              (j) Terms which are defined in one section of any Loan Document
are used with such definition throughout the instrument in which so defined.

              (k) The symbol "$" refers to United States Dollars.

              (l) Unless limited by reference to a particular Section or
provision, any reference to "herein", "hereof", or "within" is to the entire
Loan Document in which such reference is made.

              (m) References to "this Agreement" or to any other Loan Document
is to the subject instrument as amended to the date on which application of such
reference is being made.

              (n) Except as otherwise specifically provided, all references to
time are to Boston time.

              (o) In the determination of any notice, grace, or other period of
time prescribed or allowed hereunder:

                  (i) Unless otherwise provided (I) the day of the act, event,
         or default from which the designated period of time begins to run shall
         not be included and the last day of the period so computed shall be
         included unless such last day is not a Business Day, in which event the
         last day of the relevant period shall be the then next Business Day and
         (II) the period so computed shall end at 5:00 PM on the relevant
         Business Day.

                  (ii) The word "from" means "from and including".
                  (iii) The words "to" and "until" each mean "to, but
         excluding".
                  (iv) The word "through" means "to and including".

              (p) The Loan Documents shall be construed and interpreted in a
harmonious manner and in keeping with the intentions set forth in Section 9-9
hereof, PROVIDED, HOWEVER, in the event of any inconsistency between the
provisions of this Agreement and any other Loan Document, the provisions of this
Agreement shall govern and control.

<PAGE>

         9-10. INTENT. It is intended that:

               (a) This Agreement take effect as a sealed instrument.

               (b) All reasonable costs and expenses incurred by the Lender in
connection with the Lender's relationship(s) with the Borrower shall be borne by
the Borrower.

         9-11. RIGHT OF SET-OFF. Any and all deposits or other sums at any time
credited by or due to the Borrower from the Lender or any participant (a
"PARTICIPANT") in the credit facility contemplated hereby or any from any
Affiliate of the Lender or any Participant and any cash, securities, instruments
or other property of the Borrower in the possession of the Lender any
Participant or any such Affiliate, whether for safekeeping or otherwise
(regardless of the reason such Person had received the same) shall at all times
constitute security for all Liabilities and for any and all obligations of the
Borrower to the Lender or any Participant or any such Affiliate and may be
applied or set off against the Liabilities and against such obligations at any
time after the occurrence of an Event of Default.

         9-12. MAXIMUM INTEREST RATE. Regardless of any provision of any Loan
Document, the Lender shall never be entitled to contract for, charge, receive,
collect, or apply as interest on any Liability, any amount in excess of the
maximum rate imposed by applicable law. Any payment which is made which, if
treated as interest on a Liability would result in such interest's exceeding
such maximum rate shall be held, to the extent of such excess, as collateral for
the Liabilities.

         9-13. WAIVERS.

               (a) The Borrower make each of the waivers included in Section
9-13(b), below, knowingly, voluntarily, and intentionally, and understands that
the Lender, in entering into the financial arrangements contemplated hereby and
in providing loans and other financial accommodations to or for the account of
the Borrower as provided herein, whether not or in the future, is relying on
such waivers.

               (b) THE BORROWER WAIVES THE FOLLOWING:

                   (i) Except as otherwise specifically required hereby, notice
         of non-payment, demand, presentment, protest and all forms of demand
         and notice, both with respect to the Liabilities and its assets.

                   (ii) THE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE OR
         CONTROVERSY IN WHICH THE LENDER IS OR BECOMES A PARTY (WHETHER SUCH
         CASE OR CONTROVERSY IS INITIATED BY OR AGAINST THE LENDER OR IN WHICH
         THE LENDER IS JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY

<PAGE>

         ARISES OUT OF OR IS IN RESPECT OF, ANY RELATIONSHIP AMONGST OR BETWEEN
         THE BORROWER OR ANY OTHER PERSON AND THE LENDER (AND THE LENDER
         LIKEWISE WAIVES THE RIGHT TO A JURY IN ANY TRIAL OF ANY SUCH CASE OR
         CONTROVERSY).

                   (iii) Any claim to consequential, special, or punitive
         damages.

                                                         UFP TECHNOLOGIES, INC.
                                                                   ("BORROWER")

                                            By_________________________________

                                    Print Name:________________________________

                                         Title:________________________________

                                                 MOULDED FIBRE TECHNOLOGY, INC.
                                                                   ("BORROWER")

                                            By_________________________________

                                    Print Name:________________________________

                                         Title:________________________________

                                                 CITIZENS BANK OF MASSACHUSETTS
                                                                     ("LENDER")

                                            By_________________________________

                                    Print Name:________________________________

                                         Title:________________________________

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