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EXHIBIT 10.4  


 
 

TENTH AMENDMENT TO CREDIT AGREEMENT    
    


        This Amendment, dated as of June 30, 2003, is made by and among INNOVEX, INC., a Minnesota corporation (the "Borrower"), 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  Article VIII of
the Credit Agreement (each, a "Bank"; collectively, the "Banks"), 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 "Agent"). 


Recitals  


        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, a
Seventh Amendment to Credit Agreement dated as of April 29, 2002, an Eighth Amendment to Credit Agreement dated as of June 30, 2002, and a Ninth Amendment to Credit Agreement dated as of
September 30, 2002 (as so amended and as further amended or restated from time to time, the "Credit Agreement"). 


        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. 


        C.    The
Banks and the Agent are willing to grant the Borrower's requests subject to the terms and conditions set forth below. 


Agreement  


        ACCORDINGLY, in consideration of the premises and for other good and valuable consideration, the Borrower, the Banks and the Agent agree as follows: 


        1.    Definitions.    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: 



        "'Early
Payoff Date' means August 15, 2003." 


        "'Maturity
Date' means December 31, 2003, with respect to the Term Facility." 


        "'Tenth
Amendment' means the Tenth Amendment to Credit Agreement, dated as of June 30, 2003, by and among the Borrower, the Banks and the Agent." 




        2.    Payoff of Facility.    Section 2.9 of the Credit Agreement is hereby amended to include the following
subsection 2.9(c), immediately following subsection 2.9(b): 




        "(c)    Early Payoff of Term Facility.    Notwithstanding any language in this Agreement to the contrary, the Borrower
shall pay all unpaid principal and interest with respect to the Term Facility as of the Early Payoff Date. If the Borrower fails to pay all unpaid principal and interest with respect to the Term
Facility as of the Early Payoff Date: (1) the Borrower shall pay the Agent, on the following Business Day, a non-refundable fee in the amount of $30,000 for the pro rata account of
the Banks and (2) the Borrower shall continue to pay the Term 







 


Note
as provided for in Section 2.9(b), with any and all unpaid principal, interest and applicable fees finally due and payable as of the Maturity Date." 





        3.    Covenant Waivers.    




        (a)    June 30, 2003 Covenant Computation Date.    The
requirements of Section 5.9 of the Credit Agreement regarding the Borrower's Interest Coverage Ratio, Section 5.10 of the Credit Agreement regarding the Borrower's Leverage Ratio, and
Section 5.12 of the Credit Agreement regarding the Borrower's Profitability are waived by the Banks. Such waivers are limited to the June 30, 2003 Covenant Computation Date. 





        4.    Waiver Fee.    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 $30,000 for the pro rata account of the Banks. 


        5.    Conditions to Effectiveness.    This Amendment, including the covenant waivers contained in paragraph 3
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 July 15, 2003: 



        (a)   This
Amendment, duly executed by the Agent, the Banks and the Borrower, and duly acknowledged by the Guarantors; 


        (b)   Payment
of the fee described in paragraph 4 of this Amendment; and 


        (c)   Payment
of all legal fees incurred by the Agent through the date of the execution of this Amendment. 




        6.    Continued Effectiveness.    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. 


        7.    Counterparts.    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. 


        8.    Release.    The Borrower and each Guarantor, by signing the Acknowledgment and Agreement set forth below, 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 (each, a "Released Party"), 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. 


        9.    No Other Waiver.    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. 



        10.    Representations and Warranties.    The Borrower hereby represents and warrants to the Agent and the Banks as
follows: 



        (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 



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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. 


        (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) require any authorization, consent or approval by any governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, (ii) 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) 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. 


        (c)   All
of the representations and warranties contained in Article 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. 




        11.    References.    All references in the Credit Agreement to "this Agreement" 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 "Credit Agreement" shall be deemed to refer to the Credit Agreement as amended by
this Amendment. 


[Signature Page Follows]


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        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. 



	 	 	INNOVEX, INC.
	 	 	 	 	 
	 	 	By	/s/  THOMAS PAULSON      

	 	 	 	Its	Senior Vice President and CFO

	 	 	 	 	 
	 	 	 	 	 
	 	 	WELLS FARGO BANK MINNESOTA,

    NATIONAL ASSOCIATION, formerly

    known as Norwest Bank Minnesota, National

    Association, as Bank and as Agent
	 	 	 	 	 
	 	 	By	/s/  RAJENDRA SEWAK      

	 	 	 	Its	Vice President

	 	 	 	 	 
	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as

    Bank
	 	 	 	 	 
	 	 	 	 	 
	 	 	By	/s/  C. KIRK DYCHE      

	 	 	 	Its	Vice President





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ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS    
    


        The undersigned, each a guarantor of all debts, liabilities and other obligations of Innovex, Inc., a Minnesota corporation (the "Borrower") 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 "Precision Guaranty") secured by a
separate Security Agreement from Innovex Precision Components, Inc. dated as of September 15, 1999 (the "Precision Security Agreement"), (ii) a separate Guaranty from Innovex
Southwest, Inc. dated as of September 15, 1999 (the "Southwest Guaranty") secured by a separate Security Agreement from Innovex Southwest, Inc. dated as of September 15,
1999 (the "Southwest Security Agreement"), and (iii) a separate Guaranty from ADFlex Cayman Limited dated as of December 31, 2000 (the "ADFlex Guaranty," together with the Precision
Guaranty and the Southwest Guaranty, each hereinafter called a "Guaranty") secured by a separate Stock Pledge Agreement from ADFlex Cayman Limited dated as of December 31, 2000 (the "ADFlex
Security Agreement," together with the Precision Security Agreement and the Southwest Security Agreement, each hereinafter called a "Security Agreement"), 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 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 Security Agreement and any other Loan Documents to which it is a party. 



	INNOVEX SOUTHWEST, INC.	 	INNOVEX PRECISION COMPONENTS, INC.
	 	 	 	 	 	 	 
	By	/s/  THOMAS PAULSON      
	 	By	/s/  THOMAS PAULSON      

	 	Its	Senior Vice President and CFO
	 	 	Its	Senior Vice President and CFO

	 	 	 	 	 	 	 
	ADFLEX CAYMAN LIMITED	 	 	 	 
	 	 	 	 	 	 	 
	By	/s/  THOMAS PAULSON      
	 	 	 	 
	 	Its	Senior Vice President and CFO
	 	 	 	 




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TENTH AMENDMENT TO CREDIT AGREEMENT

ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS