MOD-PAC Completes New $3 Million Credit Facility Agreement

MOD-PAC CORP. (NASDAQ: MPAC) (the “Company”), a manufacturer of custom paper board packaging and provider of personalized print products, announced today that it has completed an agreement for a new $3.0 million, three-year revolving credit facility with Manufacturers and Traders Trust Company. The new facility replaces the Company’s $5.0 million line of credit, which expired in March 2010.

David B. Lupp, Chief Operating Officer and Chief Financial Officer, noted, “This agreement confirms our strong cash generation, solid balance sheet, and improved liquidity. The new facility provides MOD-PAC with the financial flexibility to support our growth strategy of expanding the Company’s core product lines, and allows us to continue to focus on achieving operating efficiencies.”

The $3.0 million, three-year revolving credit facility closed on June 9, 2010. The interest rate on the new credit facility is based on a LIBOR rate, plus 2.75%, with an interest rate floor of 3.35%. The Company may allocate up to $1.5 million of its availability under the credit agreement for the issuance of letters of credit.