INNOVEX INC
CREDIT AGREEMENT
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<TYPE>EX-10
<SEQUENCE>3
<FILENAME>d02-51517_ex10.htm
<DESCRIPTION>CREDIT AGREEMENT
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     <!-- Control Number: 02-51517                                                         -->
     <!-- Rev Number:     1.0                                                              -->
     <!-- Client Name:    Innovex, Inc.                                                    -->
     <!-- Project Name:   Form Type: 10-Q                                                  -->
     <!-- Firm Name:      Innovex, Inc. (ADP)                                              -->
     <TITLE>Exhibit 10</TITLE>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2"><B>EIGHTH AMENDMENT TO
CREDIT AGREEMENT</B> </FONT> </P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Amendment, dated as of June 30, 2002, is made by and among INNOVEX, INC., a Minnesota
corporation (the &#147;Borrower&#148;), each of the banks appearing on the signature pages
hereof, together with such other banks as may from time to time become a party to the
Credit Agreement (defined below) pursuant to the terms and conditions of <I>Article VIII</I> of the Credit Agreement (herein collectively called the &#147;Banks&#148; and
individually each called a &#147;Bank&#148;), and WELLS FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, formerly known as Norwest Bank Minnesota, National Association, a national
banking association, in its separate capacity as administrative agent for itself and all
other Banks (in such capacity, the &#147;Agent&#148;). </FONT> </P>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2"><I>Recitals</I> </FONT> </P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.
The Borrower, the Banks and the Agent are parties to a Credit Agreement dated as of
September 15, 1999, a First Amendment to Credit Agreement dated as of June 29, 2000, a
Second Amendment to Credit Agreement dated as of December 31, 2000, a Third Amendment to
Credit Agreement dated as of March 30, 2001, a Fourth Amendment to Credit Agreement dated
as of June 30, 2001, a Fifth Amendment to Credit Agreement dated as of September 30, 2001,
a Sixth Amendment to Credit Agreement dated as of February 14, 2002 and a Seventh
Amendment to Credit Agreement dated as of April 29, 2002 (as so amended and as further
amended or restated from time to time, the &#147;Credit Agreement&#148;). </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.
Currently, the Borrower is in default of several provisions of the Credit Agreement, and
the Borrower has requested that the Banks and the Agent waive the existing defaults and
provide certain other financial accommodations. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.
The Banks and the Agent are willing to grant the Borrower's requests subject to the terms
and conditions set forth below. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2"><I>Agreement</I> </FONT> </P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ACCORDINGLY,
in consideration of the premises and for other good and valuable consideration, the
Borrower, the Banks and the Agent agree as follows: </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.
<I>Definitions</I>. All capitalized terms used in this Amendment and not otherwise
specifically defined in this Amendment shall have the meanings given such terms in the
Credit Agreement. In addition, Section 1.1 of the Credit Agreement is hereby amended by
restating the following definitions in the appropriate alphabetical location: </FONT></P>

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<TD WIDTH=95%><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Eighth
Amendment&#148; means the Eighth Amendment to Credit Agreement, dated as of June 30, 2002,
by and among the Borrower, the Banks and the Agent. </FONT>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.
<I>Covenant Waivers</I>. </FONT> </P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
June 30, 2002 Covenant Computation Date. The requirements of Section 5.11 of the Credit
Agreement regarding the Borrower&#146;s Minimum Net Worth and Section 5.12 of the Credit
Agreement regarding the Borrower&#146;s Profitability are waived by Banks. Such waivers
are limited to the June 30, 2002 Covenant Computation Date.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
Agreement Regarding Other Covenant Computation Dates. </FONT></P>
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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Page 14  </FONT></P>

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<TD WIDTH=95%><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
Minimum Net Worth. The requirements of Section 5.11 of the Credit Agreement regarding the
Borrower&#146;s Minimum Net Worth as of September 30, 2002, December 31, 2002 and March
31, 2003 (collectively, the &#147;Subsequent Computation Dates&#148;, with each such date
a &#147;Subsequent Computation Date&#148;) are waived by the Banks, provided, however,
such Minimum Net Worth must not be less than $65,345,000 as of each such Subsequent
Computation Date. Such waiver is limited to the Subsequent Computation Dates and shall be
ineffective as to any Subsequent Computation Date if the Minimum Net Worth is less than
$65,345,000 as of such Subsequent Computation Date.  </FONT>
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<TD WIDTH=95%><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
Profitability. The requirements of Section 5.12 of the Credit Agreement regarding the
Borrower&#146;s Profitability as of the Subsequent Computation Dates are waived by the
Banks, provided, however, such Profitability must not be less than ($1,278,000) as of
each such Subsequent Computation Date. Such waiver is limited to the Subsequent
Computation Dates and shall be ineffective as to any Subsequent Computation Date if the
Borrower&#146;s Profitability is less than ($1,278,000) as of such Subsequent Computation
Date.  </FONT>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.
<I>Termination of Revolving Commitment</I>. As of the date this Amendment is executed, the
Bank&#146;s commitment to fund any Revolving Advances under the Revolving Facility shall
be terminated and the Borrower shall not be permitted to request any additional Revolving
Advances under the Credit Agreement. As of the date of this Amendment is executed, the
Borrower shall immediately repay any and all existing Obligations under the Revolving
Facility. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.
<I>Waiver Fee</I>. In consideration for the waivers contained herein, on the date this
Amendment is executed, the Borrower shall pay the Agent a non-refundable fully-earned
waiver fee in the amount of $20,000 for the pro rata account of the Banks on the basis of
their respective Percentages. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.
<I>Conditions to Effectiveness</I>. This Amendment, including the covenant waivers
contained in paragraph 2 herein, shall not be or become effective unless the Agent
receives each of the following items in form and substance acceptable to the Agent on or
before August 15, 2002: </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
This Amendment, duly executed by the Agent, the Banks and the Borrower, and duly
acknowledged by the Guarantors; </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
Payment of the fee referenced in paragraph 4; and </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
Payment of all legal fees incurred by the Agent through the date of the execution of this
Amendment. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.
<I>Continued Effectiveness</I>. Except as amended by this Amendment, all of the terms and
conditions of the Credit Agreement and the other Loan Documents shall remain in all other
respects in full force and effect. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.
<I>Counterparts</I>. This Amendment may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which counterparts taken together shall
constitute but one and the same instrument. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.
<I>Release</I>. The Borrower and each Guarantor, by signing its respective Acknowledgment
and Agreement set forth below, each hereby absolutely and unconditionally releases and
forever discharges the Agent and each of the Banks, and any and all participants, parent
corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors,
successors and assigns thereof, together with all of the present and former directors,
officers, agents and employees of any of the foregoing (the &#147;Released Parties&#148;),
from any and all claims, demands or causes of action of any kind, nature or description,
whether arising in law or equity or upon contract or tort or under any state or federal
law or otherwise, which the Borrower or such Guarantor has had, now has or has made claim
to have against such Released Party for or by reason of any act, omission, matter, cause
or thing whatsoever arising from the beginning of time to and including the date of this
Amendment in connection with or related to the transactions evidenced by the Loan
Documents, whether such claims, demands and causes of action are mature or unmatured or
known or unknown. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Page 15 </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.
<I>No Other Waiver</I>. Except as expressly set forth herein, the execution of this
Amendment shall not be deemed to be a waiver of any Event of Default under the Credit
Agreement, whether or not known to the Agent and/or the Banks and whether or not existing
on the date of this Amendment. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.
<I>Representations and Warranties</I>. The Borrower hereby represents and warrants to the Agent
and the Banks as follows: </FONT> </P>


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<TD WIDTH=95%><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
The Borrower has all requisite power and authority to execute this Amendment and to
perform all of its obligations under the Credit Agreement, as amended by this Amendment,
and the Credit Agreement, as amended by this Amendment, and the other Loan Documents
executed on behalf of the Borrower have been duly executed and delivered by the Borrower
and constitute the legal, valid and binding obligations of the Borrower, enforceable in
accordance with their respective terms. </FONT>
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<TD WIDTH=95%><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
The execution, delivery and performance by the Borrower of the Credit Agreement, as
amended by this Amendment, and the other Loan Documents executed on behalf of the Borrower
have been duly authorized by all necessary corporate action and do not (i)&nbsp;require
any authorization, consent or approval by any governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, (ii)&nbsp;violate any provision of
any law, rule or regulation or of any order, writ, injunction or decree presently in
effect, having applicability to the Borrower, or the Articles of Incorporation or By-laws
of the Borrower, or (iii)&nbsp;result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other agreement, lease or instrument to which
the Borrower is a party or by which it or its properties may be bound or affected. </FONT>
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<TD WIDTH=95%><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
All of the representations and warranties contained in Article&nbsp;IV of the Credit
Agreement are correct on and as of the date hereof as though made on and as of such date,
except to the extent that such representations and warranties relate solely to an earlier
date. </FONT>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.
<I>References</I>. All references in the Credit Agreement to &#147;this Agreement&#148;
shall be deemed to refer to the Credit Agreement as amended by this Amendment; and any and
all references in any of the other Loan Documents to the &#147;Credit Agreement&#148;
shall be deemed to refer to the Credit Agreement as amended by this Amendment. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their
respective officers thereunto duly authorized as of the date first above written. </FONT></P>


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<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>INNOVEX, INC.</B></FONT></TD>
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WELLS FARGO BANK MINNESOTA, NATIONAL <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ASSOCIATION, formerly known as Norwest Bank <BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Minnesota, National Association, as Bank and as Agent</B> </FONT> </FONT>
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U.S. BANK NATIONAL ASSOCIATION, as Bank</B> </FONT> </FONT>

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<P ALIGN=CENTER><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>ACKNOWLEDGMENT AND
AGREEMENT OF GUARANTORS </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned, each a guarantor of all debts, liabilities and other obligations of Innovex,
Inc., a Minnesota corporation (the &#147;Borrower&#148;) to the Banks (as defined in the
foregoing Amendment) and the Agent (as defined in the foregoing Amendment) under the
Credit Agreement (as defined in the foregoing Amendment) and related Loan Documents (as
defined in the foregoing Amendment) pursuant to (i) a separate Guaranty from Innovex
Precision Components, Inc. dated as of September 15, 1999 (the &#147;Precision
Guaranty&#148;) secured by a separate Security Agreement from Innovex Precision
Components, Inc. dated as of September 15, 1999 (the &#147;Precision Security
Agreement&#148;), (ii) a separate Guaranty from Innovex Southwest, Inc. dated as of
September 15, 1999 (the &#147;Southwest Guaranty&#148;) secured by a separate Security
Agreement from Innovex Southwest, Inc. dated as of September 15, 1999 (the &#147;Southwest
Security Agreement&#148;), and (iii) a separate Guaranty from ADFlex Cayman Limited dated
as of December 31, 2000 (the &#147;ADFlex Guaranty,&#148; together with the Precision
Guaranty and the Southwest Guaranty, each hereinafter called a &#147;Guaranty&#148;)
secured by a separate Stock Pledge Agreement from ADFlex Cayman Limited dated as of
December 31, 2000 (the &#147;ADFlex Security Agreement,&#148; together with the Precision
Security Agreement and the Southwest Security Agreement, each hereinafter called a
&#147;Security Agreement&#148;), hereby (a) acknowledges receipt of the foregoing
Amendment; (b) consents to the terms of the foregoing Amendment (including, without
limitation, the releases set forth in paragraph 8 of the foregoing Amendment) and
execution of the foregoing Amendment by the Borrower; (c) reaffirms its obligations to the
Agent and the Banks pursuant to the terms of its Guaranty, its Guarantor Security
Agreement and any other Loan Documents to which it is a party; and (d) acknowledges that
the Agent and the Banks may amend, restate, extend, renew, or otherwise modify the Credit
Agreement or any other Loan Document or any indebtedness or agreement of the Borrower in
favor of the Agent and/or the Banks, or enter into any agreement or extend additional or
other credit accommodations to the Borrower, without notifying or obtaining the consent of
the undersigned and without impairing the liability of the undersigned under its Guaranty,
its Guarantor Security Agreement and any other Loan Documents to which it is a party. </FONT></P>


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<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>ADFLEX CAYMAN LIMITED</B></FONT></TD>
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