Prepared by MERRILL CORPORATION




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Exhibit 10.8  


 
 

AMENDMENT NO. 1
  AND WAIVER
  TO K*TEC ELECTRONICS HOLDING CORPORATION
  CREDIT AGREEMENT, GUARANTY AND PLEDGE AND SECURITY AGREEMENT    
  


    AMENDMENT NO. 1 AND WAIVER (this "Amendment") dated as
of November 7, 2001, among K*TEC Electronics Holding Corporation (formerly known as K*TEC Electronics Corporation), a Delaware Corporation (the
"Borrower"), and Citicorp USA, Inc. as sole Lender (as defined below) and as Administrative Agent (as defined below), amends certain provisions
of, and waives certain Events of Default under, the Credit Agreement dated as of January 26, 2001 (as amended to the date hereof, the "Credit
Agreement") among the Borrower, the financial institutions from time to time party thereto as lenders (the "Lenders"), the
financial institutions from time to time party thereto as issuers (the "Issuers") and Citicorp USA, Inc., as agent for the Lenders and Issuers
(in such capacity, the "Administrative Agent"), the Guaranty and the Pledge and Security Agreement. Capitalized terms used herein but not defined herein
are used as defined in the Credit Agreement. 


 
 

W I T N E S S E T H:    
  


    WHEREAS, the Borrower, the Lenders, the Issuers and the Administrative Agent are parties to the Credit
Agreement and, as of the date hereof, the undersigned Lenders constitute the Requisite Lenders; 


    WHEREAS, the Borrower has notified the Administrative Agent that the Events of Default specified on  Schedule A (Potential Events of
Default) hereto have occurred and are continuing, or, as the case
may be, may have occurred and be continuing (such Events of Default, together with any Event of Default that may exist by reason of any failure to deliver notice thereof under  Section 6.2
(Default Notices) of the Credit Agreement and by past misrepresentations under the
Credit Agreement that no Default or Events of Default existed and were continuing, the "Specified Events of Default"); 


    WHEREAS, the Borrowers have requested that the Administrative Agent confirm the waiver of the notice requirement (the
"Notice Requirement") set forth in clause (c) of Section 8.5
(Restricted Payments) of the Credit Agreement arising in connection with a $20,000,000 dividend paid on or about April 9, 2001 (the "Sponsor
Dividend") and acknowledge and agree that such dividend was paid in compliance with such clause; 


    WHEREAS, the Borrower has asked the Administrative Agent and Requisite Lenders to (a) waive the Specified Events of Default,
(b) waive compliance with Article V (Financial Covenants) of the Credit Agreement (other than Section 5.3
(Capital Expenditures)thereof) prior to the EFTC Joinder Date and (c) make certain other amendments set forth herein; and 



    WHEREAS, the Administrative Agent and the undersigned Lenders (constituting all the Lenders) agree, subject to certain limitations and
conditions set forth below, to (a) waive the Specified Events of Default, (b) confirm the waiver of the Notice Requirement in connection with the Sponsor Dividend and acknowledge and
agree that the Sponsor Dividend was paid in compliance with clause (c) of Section 8.5 (Restricted
Payments) of the Credit Agreement, (c) waive compliance with Article V (Financial Covenants) of the Credit
Agreement (other than Section 5.3 (Capital Expenditures) thereof) prior to the EFTC Joinder Date and (d) make certain other amendments set
forth herein; 


    NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and obligations herein set forth and other good and valuable
consideration, the adequacy and receipt of which is 





 


hereby acknowledged, and in reliance upon the representations, warranties and covenants herein contained, the parties hereto, intending to be legally bound, hereby agree as follows: 



 Section 1. Waiver  




    (a) Effective
as of the Amendment Effective Date and subject to the terms and conditions set forth herein, the Lenders party hereto, constituting all the Lenders,
hereby waive (i) the Specified Events of Default, provided, however, that, in respect of
Specified Events of Default relating to representations and warranties, such Specified Events of Default shall be waived only to the extent they relate to representations and warranties made prior to
the date hereof, and provided, further, that the waiver set forth in this  subclause (i) shall not excuse any
failure to comply after the Amendment Effective Date with the Credit Agreement as amended hereby; and
(ii) compliance, prior to the EFTC Joinder Date, with Article V (Financial Covenants) of the Credit Agreement (other than  Section 5.3 (Capital
Expenditures) thereof); provided, however, that, if the EFTC Joinder Date does
not occur on or before March 31, 2002, no waiver set forth in this clause (a) shall be of any further force or effect and the Specified
Events of Default shall then immediately constitute Events of Default under the Credit Agreement without regard for any grace period set forth with respect thereto, it being understood and agreed that
all waivers set forth in this clause (a) shall be unconditional and irrevocable prior to March 31, 2002. 


    (b) The
Administrative Agent and the Lenders party hereto, constituting all the Lenders, hereby confirm their waiver of the Notice Requirement in connection with the
Sponsor Dividend and acknowledge and agree that the Sponsor Dividend was paid in accordance with clause (c) of  Section 8.5 (Restricted Payments).




 Section 2. Amendments  




    (a) As of the Amendment Effective Date



    The
Credit Agreement is, effective as of the Amendment Effective Date, hereby amended as follows: 



     (i) Amendments to Loan Documents



    (1) Each
mention of the name "K*TEC Electronics Corporation" in the Credit Agreement, the Guaranty and the Pledge and Security Agreement (including in the signature
pages thereof) each as amended hereby is replaced with the name "K*TEC Electronics Holding Corporation (formerly known as K*TEC Electronics Corporation)". 



    (2) Each
mention of the name "RandiC LP" in the Credit Agreement, the Guaranty and the Pledge and Security Agreement (including in the signature pages thereof) each as
amended hereby is replaced with the name "K*TEC Electronics L.P. (formerly known as RandiC LP)". 




    (ii) Amendments to Article I (Definitions, Interpretation and Accounting Terms)



    (1) The
following definitions for the following terms are hereby inserted in Section 1.1 (Defined Terms) of the
Credit Agreement in the appropriate place to preserve the alphabetical order of the definitions in such Section (and, if applicable, the following definitions shall replace in their entirety the
existing definitions for the following terms in such section): 



    "Advance Rate" means: 



    (a) in
the case of Eligible Receivables, the Applicable Receivables Rate; 






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    (b) in the case of Eligible Raw Materials, (i) prior to the EFTC Joinder Date, 26% and (ii) on and after the EFTC Joinder Date, 44%; 


    (c) in
the case of Eligible Finished Goods, (i) prior to the EFTC Joinder Date, 39% and (ii) on and after the EFTC Joinder Date, 43%; 


    (d) in
the case of Eligible Work-in-Process Inventory, (i) prior to the EFTC Joinder Date, 45% and (ii) on and after the EFTC
Joinder Date, 50%; 


    (e) in
the case of Eligible Equipment, 75%; and 



    (f)  in
the case of Eligible Real Property, 55%; 




provided, however, that each percentage rate as to any class of Collateral described in  clauses (b) through
(f) hereof is subject to reduction (or, if so reduced, increase up to the
percentages set forth above) at the Administrative Agent's sole discretion exercised reasonably. 


    "Applicable Margin" means, during the period commencing on the Amendment Effective Date, with respect to the Revolving Loans maintained
as (a) Base Rate Loans, a rate equal to 2.0% per annum and (b) Eurodollar Rate Loans, a rate equal to 3.25% per annum. 


    "Applicable Unused Commitment Fee Rate" means 0.5% per annum. 


    "Business Plans" means, collectively (a) the business plan, dated October 4, 2001 in respect of K*TEC, (b) the
business plan, dated October 4, 2001, in respect of EFTC and (c) the business plan, dated October 4, 2001, in respect of EFTC and K*TEC combined, in each case covering the fiscal
years ending in 2001 through 2005 inclusive, delivered to the Administrative Agent by the Company. 


    "Company's Accountants" means (a) for any fiscal period ending prior to October 10, 2000, Grant Thornton and
(b) thereafter, Arthur Andersen, KPMG or any other independent, nationally-recognized public accountant acceptable to the Administrative Agent. 


    "EBITDA" means, with respect to any Person for any period, an amount equal to (a) Consolidated Net Income of such Person for
such period plus (b) the sum of, in each case to the extent included in the calculation of such Consolidated Net Income but without duplication,
(i) any provision for income taxes, (ii) Interest Expense, (iii) loss from extraordinary items (including (A) any loss resulting from an Asset Sale by such Person or any of
its Subsidiaries other than in the ordinary course of business, (B) up to $7,250,000 (in the aggregate together with all other merger fees associated with the EFTC Merger) and
(C) restructuring charges and cash non-recurring charges not to exceed $3,000,000 in any Fiscal Year, (iv) depreciation, depletion, amortization and impairment of intangibles
or financing or acquisition costs and (v) all other non-cash charges and non-cash losses for such period, including the amount of any compensation deduction as the
result of any grant of Stock or Stock Equivalents to employees, officers, directors or consultants accrued during such period and not paid in cash during such period  minus (c) the sum of, in each
case to the extent included in the calculation of such Consolidated Net Income but without duplication,
(i) any credit for income tax, (ii) gains from extraordinary items for such period, (iii) any aggregate net gain (but not any aggregate net loss) from the sale, exchange or other
disposition of capital assets by such Person and (iv) any other non-cash gains or other items which have been added in determining Consolidated Net Income, including any reversal of
a charge referred to in clause (b)(v) above by reason of a decrease in the value of any Stock or Stock Equivalent. 





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    "EFTC" means EFTC Corporation, a Colorado corporation, together with any successors (including, after its merger with EFTC Corporation,
EFTC Delaware) and permitted assigns. 


    "EFTC Holdings" means Suntek Corporation, a Delaware corporation newly-formed for purpose of the EFTC Merger and directly owning all of
the Stock of EFTC Parent. 


    "EFTC Merger" means a series of transactions in which, in accordance with the definition of "Permitted
Acquisition," (a) on the terms set forth in the EFTC Merger Agreement, (i) a newly formed, direct Wholly Owned Subsidiary of EFTC Holdings is merged with and into
Thayer-Blum with Thayer-Blum as the surviving company and another newly-formed, direct Wholly-Owned Subsidiary of EFTC Holdings is merged with and into EFTC with EFTC as the
surviving corporation, and (ii) immediately thereafter, EFTC shall be merged with and into a newly-formed Delaware corporation ("EFTC Delaware")
with EFTC Delaware as the surviving corporation and (A) the holders of the Stock of EFTC (including any holder of preferred stock) will receive Stock of EFTC Delaware, (B) there shall be
no holder of the Stock of EFTC Delaware other than previous holders of Stock in EFTC, (C) K*TEC, Thayer-Blum and EFTC Delaware shall be Wholly-Owned Subsidiaries of EFTC Holdings
and (D) the holders of the Stock of Thayer-Blum and EFTC (including any holder of preferred stock) immediately prior to the mergers will receive, as the sole consideration therefor,
Stock issued by EFTC Holdings and (b) immediately after the consummation of such mergers, all outstanding Stock of Thayer-Blum and EFTC Delaware (as the surviving companies in the
mergers) shall have been transferred by EFTC Holdings to EFTC Parent, so that, after giving effect to all of the foregoing transactions, (A) EFTC Parent is a direct Wholly-Owned Subsidiary of
EFTC Holdings and the only Subsidiary thereof, (B) each of Thayer-Blum and EFTC Delaware (as the surviving companies in the mergers) is a direct Wholly-Owned Subsidiary of EFTC
Parent, and Thayer-Blum and EFTC Delaware are the only Subsidiaries of EFTC Parent and (C) K*TEC is a direct, Wholly-Owned Subsidiary of Thayer-Blum and the only
Subsidiary thereof; provided, however, that the series of transactions described above may be changed in
any respect satisfactory to the Administrative Agent in its sole discretion reasonably exercised. The phrase "consummation of the EFTC Merger" means the
consummation of all transactions described in this definition. 


    "EFTC Merger Agreement" means the Amended and Restated Agreement and Plan of Merger in respect of the EFTC Merger, dated as of
May 3, 2001, with such changes or additions as are reasonably acceptable to the Administrative Agent, and each other agreement, document and instrument executed in connection with the EFTC
Merger, each of which shall be reasonably satisfactory to the Administrative Agent. 


    "EFTC Merger Deadline" means March 31, 2002. 


    "EFTC Parent" means a Delaware corporation that is a direct, Wholly-Owned Subsidiary of EFTC Holdings and which, as part of the EFTC
Merger, shall receive all of the Stock of each of Thayer-Blum and EFTC Delaware. 


    "Eligible Inventory" means Inventory of a Borrower and its Eligible Subsidiaries (other than any Inventory that has been consigned by
such Borrower (or, as the case may be, such Eligible Subsidiary)) including raw materials, work-in-process and finished goods: 



    (a) owned
solely by such Borrower (or, as the case may be, such Eligible Subsidiary); 






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    (b) with respect to which the Administrative Agent has a valid and perfected first priority Lien; 


    (c) as
to which, at the time they were made and at the time of the determination (except for representations and warranties expressly referring to an earlier date that
shall be measured as of such date), all representation and warranties contained in any of the Loan Documents are correct; 


    (d) which
is not obsolete or unmerchantable; provided, however, that
such Inventory shall be deemed to be obsolete or unmerchantable if (i) with respect to Eligible Finished Goods, such Inventory has not been used for a period of three months and (ii) for
all other classes of Inventory, (A) such Inventory has not been used (1) if such Inventory is subject to the Module Supplier Agreement, in the last twelve months and
(2) otherwise, in the last six months, (B) additional quantities of such Inventory have not been received in the last six months and (C) there has been no forecasted usage of such
Inventory in the last six months; and provided, further, that, notwithstanding the foregoing, prior to
the EFTC Joinder Date, such Inventory shall not be deemed to be obsolete or unmerchantable if such Inventory is subject to an Inventory Sale Agreement to which the Borrower (or, as the case may be,
the Eligible Subsidiary thereof) owning such Inventory is a party and such Borrower or Eligible Subsidiary has not received notification from the third-party purchaser party to such Inventory Sale
Agreement that such Borrower or Eligible Subsidiary is in breach or default of such agreement; 


    (e) with
respect to which (in respect of any Inventory labeled with a brand name or trademark and sold by such Borrower (or, as the case may be, such Eligible
Subsidiary) pursuant to a trademark owned by such Borrower (or, as the case may be, such Eligible Subsidiary) or a license granted to such Borrower (or, as the case may be, such Eligible Subsidiary))
the Administrative Agent would have rights under such trademark or license pursuant to the Pledge and Security Agreement or other agreement satisfactory to the Administrative Agent to sell such
Inventory in connection with a liquidation thereof; and 


    (f)  that
the Administrative Agent deems to be Eligible Inventory based on such credit and collateral considerations as the Administrative Agent may, in its sole
discretion, deem appropriate. 




No
Inventory of any Borrower or Eligible Subsidiary thereof shall be Eligible Inventory if such Inventory consists of (i) goods returned or rejected by customers other than goods that are
undamaged or are resaleable in the normal course of business, (ii) goods to be returned to suppliers, (iii) goods in transit, (iv) packaging material or (v) goods located,
stored, used or held at the premises of a third party unless (x)(A) the Administrative Agent shall have received a Landlord Waiver or Bailee's Letter or (B) in the case of Inventory located at
a leased premises, an Eligibility Reserve satisfactory to the Administrative Agent shall have been established with respect thereto and (y) an appropriate UCC-1 financing statement
shall have been executed and properly filed. 


    "Exempted Proceeds" means the first $25,000,000, in the aggregate, of Net Cash Proceeds arising from one or more Equity Issuances by
Holdings or the issuance of Subordinated Debt by any Loan Party.


    "Inventory Sale Agreement" means an unconditional, written Contractual Obligation of a third party purchaser (in form and substance and
with a third party acceptable to the Administrative Agent in its sole discretion exercised reasonably), pursuant to which such 





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purchaser is obligated to purchase from such Borrower or Eligible Subsidiary specifically designated Inventory in the possession of such Borrower or Eligible Subsidiary, within a specified period (or
at a specified date), for a determined price and pursuant to specific payment terms. 


    "K*TEC" has the meaning specified in the preamble to this Agreement. 


    "Minimum Liquidity Condition" refers, at any time, to the sum of the Revolving Credit Outstandings and the Availability Reserves in
effect at such time being lower than the greater of (A) 80% of the aggregate Revolving Credit Commitments in effect at such time and (B) 80% of the Aggregate Borrowing Base at such time. 


    "Module Supplier Agreement" means the Module Supplier Agreement, dated as of February 2, 2000, by and between Applied
Materials, Inc. and K*TEC, as the same may be amended, restated, supplemented or otherwise modified (including any changes to Attachment 1 thereto) with the approval of the Administrative
Agent. 


    "Net Cash Proceeds" means proceeds received by any Loan Party after the Closing Date (or, in case of EFTC Parent, EFTC Holdings, EFTC
or the EFTC Subsidiaries, after the EFTC Joinder Date) in cash or Cash Equivalents from any (a) Asset Sale, other than an Asset Sale permitted under clauses
(a) and (c) through (f) of Section 8.4 (Sale of
Assets), net of (i) the reasonable cash costs of sale, assignment or other disposition, (ii) taxes paid or payable as a result thereof and (iii) any amount
required to be paid or prepaid on Indebtedness (other than the Obligations) secured by the assets subject to such Asset Sale; provided, however, that
the evidence of each of (i), (ii) and (iii) are provided
to the Administrative Agent in form and substance satisfactory to it; (b) Property Loss Event or (c)(i) Equity Issuance (other than (A) any such issuance of common Stock of
Holdings or the Company occurring in the ordinary course of business to any director, member of the management or employee of Holdings or the Company or any of its Subsidiaries or (B) the
Exempted Proceeds) or (ii) any Debt Issuance permitted under clause (i) of Section 8.1
(Indebtedness) or subclause (i) of clause (d) of  Section 16 (Representations and Warranties;
Covenants) of the Guaranty except Exempted Proceeds, in each case net of brokers' and advisors' fees
and other costs incurred in connection with such transaction; provided, however, that
in the case of this clause (c), evidence of such costs is provided to the Administrative Agent in form and substance satisfactory to it. 



    "Pre-Merger Subordinated Debt" means any Subordinated Debt incurred prior to the earlier of the EFTC Merger Deadline and
the consummation of the EFTC Merger in reliance on clause (i) of Section 8.1
(Indebtedness). 


    "Purchase Price Adjustment Agreement" means the Loan Agreement, dated as of October 10, 2000, by and between
Thayer-Blum and Kent Electronics Corporation, relating, inter alia, to the Purchase Price Adjustment Note. 



    "Related Documents" means the Acquisition Agreement, the Purchase Price Adjustment Note, the Purchase Price Adjustment Agreement and
each other document and instrument executed with respect thereof and, effective upon the consummation of the EFTC Merger, the EFTC Merger Agreement. 


    "Restricted Payment" means (a) any dividend or other distribution, direct or indirect, on account of any Stock or Stock
Equivalents of the Company or any of its Subsidiaries now or hereafter outstanding, except a dividend payable solely in Stock or Stock Equivalents, (b) any redemption, retirement, sinking fund
or similar payment, purchase or other acquisition for value, direct or indirect, of any Stock or Stock Equivalents of the Company or any of its Subsidiaries now or hereafter outstanding other than one
payable 





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solely to the Company or one or more Subsidiary Guarantors and (c) any payment or prepayment of principal, premium (if any), interest, fees (including fees to obtain any waiver or consent in
connection with any Security) or other charges on, or redemption, purchase, retirement, defeasance, sinking fund or similar payment with respect to, any subordinated Indebtedness of the Company
(including Subordinated Debt) or any of its Subsidiaries or any other Loan Party, other than any required payment, prepayment, redemption, retirement, purchases or other payments, in each case to the
extent permitted to be made by the terms of such Indebtedness after giving effect to any applicable subordination provisions. 


    "Scheduled Termination Date" means the earlier of (a) the third anniversary of the EFTC Merger Deadline and (b) the third
anniversary of the EFTC Joinder Date. 


    "Sponsor Dividend" means a dividend in the amount of $20,000,000 paid and declared on or about April 9, 2001 by K*TEC to
Thayer-Blum. 


    "Subordinated Debt" means unsecured Indebtedness of K*TEC that (i) is not due (and, except for Pre-Merger
Subordinated Debt, does not provide for the cash payment of principal) at any time prior to the first anniversary of the Scheduled Termination Date, (ii) does not provide for the cash payment
of interest at any time prior to the EFTC Joinder Date, (iii) is subordinated to the payment in full in cash of the Obligations on terms satisfactory to the Administrative Agent and
(iv) is otherwise in form and substance satisfactory to the Administrative Agent. 




    (2) Clause (p) of the definition of "Eligible Receivable" is
hereby amended and restated in its entirety to read as follows: 



    (p) if
such Account Debtor is not Applied Materials, Inc., Honeywell International Inc., Alcatel or, prior to the EFTC Joinder Date, Emulex, the total
Accounts of such Account Debtor to any Borrower or any Eligible Subsidiary thereof represent more than 20% of the Eligible Receivables, individually or in the aggregate, as to all Borrowers and their
Eligible Subsidiaries at such time, but only to the extent of such excess; or 




    (3) Clause (q) of the definition of "Eligible Receivable" is
hereby amended and restated in its entirety to read as follows: 



    (q) if
such Account Debtor is Emulex, prior to the EFTC Joinder Date, the total Accounts of such Account Debtor owing to any Borrower or any Eligible Subsidiary thereof
exceed $30,000,000, individually or in the aggregate, as to all Borrowers and their Eligible Subsidiaries at such time, but only to the extent of such excess; and 




    (4) Subclause (ii) of clause (b) of the definition of
"Permitted Acquisition" in the Credit Agreement is hereby amended and restated in its entirety to read as follows: 



    (b) the
EFTC Merger, but only if the following conditions are met: 



     (i) all
conditions precedent set forth in Section 3.3 (Conditions Precedent to the Joinder of EFTC and EFTC
Parent) shall have been met; 


    (ii) neither
EFTC, nor any of its Subsidiaries shall have, since the Closing Date, merged or consolidated with any other Person, changed the nature of its business or
its corporate structure, created new Subsidiaries, amended its charter or by-laws, declared any dividend or distribution or made any
Restricted Payment (other than (x) payment in full of the $3,000,000 subordinated notes issued by EFTC for the benefit of the Monfort Family Limited Partnership I and (y) purchases by
EFTC of 






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its own Stock in the open-market for an aggregate consideration not exceeding $5,000,000), sold, leased or otherwise disposed of assets outside the ordinary course of business (including
in connection with a sale leaseback transaction), given a negative pledge on any assets in favor of any Person other than the Administrative Agent and the Lenders, permitted to exist any consensual
encumbrance on the ability of any Subsidiary to pay dividends or other distributions to EFTC, except, in each case, if part of the series of transactions set forth in the definition of
"EFTC Merger" above or as may be permitted hereby (assuming EFTC were a Borrower hereunder) or agreed to by the Administrative Agent and, for any
changes that the Administrative Agent reasonably deems material, by the Requisite Lenders; provided,  however, that EFTC (or EFTC Delaware) may make cash
payments to holders of fractional shares of EFTC pursuant to the EFTC Merger Agreement;
 


    (iii) the
EFTC Merger shall have been consummated on or before the EFTC Merger Deadline; 


    (iv) the
EFTC Merger shall be consensual and the EFTC Merger Agreement and the EFTC Merger shall have been approved by the board of directors of each of
Thayer-Blum, EFTC Delaware, EFTC, K*TEC, EFTC Parent, EFTC Holdings and both of the Subsidiaries thereof merging into EFTC and K*TEC respectively; 


    (v) Holdings
shall have assumed (and EFTC or K*TEC, as the case may be, shall be released from), in form and in substance reasonably acceptable to the Administrative
Agent, the obligations of K*TEC under any Subordinated Debt incurred in reliance on clause (i) of Section 8.1
(Indebtedness); 


    (vi) no
Indebtedness or other liabilities shall be incurred, assumed, maintained or otherwise be reflected on a consolidated balance sheet of Thayer-Blum,
the EFTC Parent, EFTC and the Subsidiaries of EFTC after giving effect to the EFTC Merger, except (A) Loans made hereunder, (B) ordinary course trade payables, accrued expenses,
(C) Indebtedness that will be permitted under Section 8.1 (Indebtedness) after the EFTC Joinder Date and (D) other cash liabilities
that would be permitted to be outstanding hereunder after the EFTC Joinder Date; 


   (vii) at
or prior to the closing of the EFTC Merger, K*TEC and its Subsidiaries, Thayer-Blum, EFTC Parent, EFTC Holdings, EFTC and the EFTC Subsidiaries
shall have taken such actions as may be required under Section 7.11 (Additional Collateral and Guaranties) and  Section 7.12 (Real Property) after
giving effect to the consummation of the EFTC Merger; 


   (viii) at
the time of the EFTC Merger and after giving effect to the consummation of the EFTC Merger and to the repayment by EFTC of the EFTC Senior Indebtedness,
(A) no Default or Event of Default shall have occurred and be continuing (and EFTC Parent shall have demonstrated compliance with the covenants set forth in  Article V (Financial Covenants), as
amended, on a pro forma basis), (B) all
representations and warranties contained in Article IV (Representations and Warranties) and in the other Loan Documents shall be true and correct
in all material respects and (C) all conditions precedent set forth in Section 3.2 (Conditions Precedent to Each Loan and Letter of
Credit) shall have been met; 


    (ix) The
Minimum Liquidity Condition shall be satisfied on the EFTC Joinder Date on a pro forma basis, assuming the EFTC
Joinder Date has occurred and after giving effect to the EFTC Merger and to any Borrowings on the EFTC Joinder Date; and 






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    (x) After giving effect to the consummation of the EFTC Merger, the options set forth on Schedule 4.3 (Stock Options; Ownership of
Subsidiaries) shall have been exchanged with, or otherwise shall have become, options to purchase Stock of EFTC Holdings, and, after giving effect to the EFTC Merger and other
acts of the Loan Parties occurring on the EFTC Joinder Date, no Loan Party other than EFTC Holdings shall have any Stock or Stock Equivalents other than that owned by another Loan Party as part of the
Pledged Collateral. 





    (5) The
definition of "Material Adverse Change" in Section 1.1 (Defined
Terms) of the Credit Agreement is hereby amended by inserting the word "prospects," between "performance," and "obligations" in the second line thereof. 


    (6) The
definition of "Mortgage Value" in Section 1.1 (Defined
Terms) of the Credit Agreement is hereby amended by replacing the phrase "the greater of" in the second line thereof with the phrase "the lesser of". 




    (iii) Amendment to Article II (The Facility)



    Clause (b) of Section 2.5 (Reduction and Termination of the Revolving Credit
Commitments) is hereby amended and restated in its entirety to read as follows: 



    (b) The
then current Revolving Credit Commitments shall be reduced on each date on which a prepayment of Revolving Loans or Swing Loans is made pursuant to  subclause (i) (other than for Asset Sales made
pursuant to and in accordance with clause (b) of  Section 8.4 (Sale of Assets)) or (ii) of 
clause (a) of Section 2.9 (Mandatory Prepayments) or would be required to be made had the
outstanding Revolving Loans and Swing Loans equaled the Revolving Credit Commitments then in effect, in each case in the amount of such prepayment (or deemed prepayment) (and the Revolving Credit
Commitment of each Lender shall be reduced by its Ratable Portion of such amount). 





    (iv) Amendment to Article III (Conditions to Loans and Letters of Credit)



    Section 3.3  (Conditions Precedent to the Joinder of EFTC and EFTC Parent) of the Credit Agreement is hereby
amended by deleting the "and" at the end of clause (k) thereof, renumbering clause (l)
clause (m) (and each reference to such clause (l) in any Loan Document (that is not an amendment to the Credit
Agreement) as amended hereby is hereby amended accordingly to refer to such subclause as renumbered) and inserting a new clause (l) immediately
after clause (k) thereof to read in its entirety as follows: 



    (l)  a
pro forma Borrowing Base Certificate setting forth, as of the EFTC Joinder Date after giving effect to the
transaction contemplated to occur on the EFTC Joinder Date, the Borrowing Base of each Borrower and its Eligible Subsidiaries and the Aggregate Borrowing Base executed by a Responsible Officer of each
Borrower. 





    (v) Amendments to Article IV (Representations and Warranties)



    (1) Clause (b) Section 4.13 (Use of Proceeds) is hereby amended by deleting in the fourth line of such
Section the reference "Section 8.5 (b)(c)" and replacing it with the phrase "clauses (b)
and (c) of Section 8.5". 


    (2) Section 4.3 (Ownership of Company; Subsidiaries) of the Credit Agreement is hereby amended and restated in
its entirety to read as follows: 


    Section 4.3 Ownership of Company; Subsidiaries



    (a) On
the Closing Date, the authorized capital stock of the Company consists of 30,000,000 shares of common stock, $0.01 par value per share, of which 23,000,000
shares 





9





 




are issued and outstanding. All of the outstanding capital stock of the Company has been validly issued, is fully paid and non-assessable and is owned beneficially and of record by
Holdings, free and clear of all Liens other than the Lien in favor of the Administration Agent created by the Pledge and Security Agreement. No Stock of the Company is subject to any option, warrant,
right of conversion or purchase or any similar right other than, prior to the earlier of the EFTC Merger Deadline and the consummation of the EFTC Merger (but not after giving effect thereto), as set
forth on Schedule 4.3 (Stock Options; Ownership of Subsidiaries). There are no agreements or understandings to which the Company is a party with
respect to the voting, sale or transfer of any shares of Stock of the Company or any agreement restricting the transfer or hypothecation of any such shares. Holdings has no Subsidiary other than the
Company and owns no other Stock other than that of the Company. As of the Closing Date and (in respect only of EFTC Holdings, EFTC Parent, EFTC and their respective Subsidiaries) the EFTC Joinder
Date, each of Holdings and the Company has no Subsidiary that is not a Loan Party and owns no Stock other than that of a Loan Party. 


    (b) Set
forth on Schedule 4.3 (Ownership of Subsidiaries) hereto is a complete and accurate list showing, as of
the Closing Date (and as of the EFTC Joinder Date, if this representation and warranty is made as to EFTC Holdings, the EFTC Parent, EFTC and its Subsidiaries on or after the EFTC Joinder Date), all
Subsidiaries of the Company (other than K*TEC and its Subsidiaries set forth on Schedule 4.3 (Ownership of Subsidiaries)) and, as to each such
Subsidiary, the jurisdiction of its incorporation, the number of shares of each class of Stock authorized (if applicable), the number outstanding on the Closing Date (and on the EFTC Joinder Date, if
this representation and warranty is made as to EFTC Holdings, the EFTC Parent, EFTC and its Subsidiaries on or after the EFTC Joinder Date) and the number and percentage of the outstanding shares of
each such class owned (directly or indirectly) by the Company. All of the outstanding Stock of each Subsidiary of the Company has been validly issued, is fully paid and non-assessable and
is owned by the Company or a Wholly-Owned Subsidiary of the Company, free and clear of all Liens (other than the Lien in favor of the Secured Parties created pursuant to the Pledge and Security
Agreement). No Stock of any Subsidiary of the Company is subject to any option, warrant, right of conversion or purchase or any similar right. Neither the Company nor any such Subsidiary is a party
to, or has knowledge of, any agreement restricting the transfer or hypothecation of any Stock of any such Subsidiary, other than the Loan Documents. The Company does not own or hold, directly or
indirectly, any Stock of any Person other than such Subsidiaries and Investments permitted by Section 8.3 (Investments). 




    (3) Clause (c) of Section 4.4 (Financial Statements) of
the Credit Agreement is hereby amended and restated in its entirety to read as follows: 



    (c) The
Business Plans have been prepared by K*TEC and EFTC in light of the past operations of their respective business, and reflect K*TEC's, EFTC's and combined
business plans for the five year period beginning on January 1, 2001 on a month by month basis for the first year, on a quarter by quarter basis for the second year and on a year by year basis
thereafter. As of their respective dates, each Business Plan is based upon estimates and assumptions stated therein, all of which each of K*TEC and EFTC believes to be reasonable and fair in light of
current conditions and current facts known to them. As of the EFTC Joinder Date, the Business Plans, together with any update thereof delivered to the Administrative Agent, are based upon estimates
and assumptions stated therein, all of which each of K*TEC and EFTC believes to be reasonable and fair in light of then-current conditions and current facts known to the Company. 





10





 




    (vi) Amendment to Article V (Financial Covenants)



    Section 5.3  (Maximum Capital Expenditures) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows: 



    Section 5.3 Maximum Capital Expenditures


    (a) During
the Fiscal Quarter ending on or about December 31, 2001, K*TEC shall not permit Capital Expenditures to be made or incurred in excess of $2,500,000. 


    (b) During
each of the periods set forth below, the Company shall not permit Capital Expenditures to be made or incurred (in the aggregate, together with any Capital
Expenditures made or incurred prior to the EFTC Joinder Date in such period) in excess of the maximum amount set forth below for such period: 





	
 Period
 
	
 	

Maximum Capital Expenditures
	
 
	Fiscal Year ending on or about December 31, 2002	 	$	15,000,000	 
	Fiscal Year ending on or about December 31, 2003	 	$	20,000,000	 
	Fiscal Year ending on or about December 31, 2004	 	$	25,000,000	 
	From January 1, 2005 through the Scheduled Termination Date	 	$	 8,500,000	;








provided, however, that, in the case of clauses (a) and  (b) above,
 to the extent that actual Capital Expenditures for any such period (whether made before or after the EFTC Joinder Date) shall be less than
the maximum amount set forth above for such period (without giving effect to the carryover permitted by this proviso but considering the maximum amounts set forth above if the EFTC Joinder Date
occurred at any time during such period), the difference between said stated maximum amount
and such actual Capital Expenditures shall, in addition, be available for Capital Expenditures in the next succeeding period. 





   (vii) Amendments to Article VI (Reporting Covenants)



    (1) Clauses (a) through (d) of  Section 6.1 (Financial Statements) of the Credit Agreement are hereby amended and
restated in their entirety (it is understood and agreed that
such amendment and restatement shall not cure the Specified Events of Default or modify in any other way the effect of the waiver (or the effect thereof or of the termination thereof) set forth in  Section 1
(Waiver)) to read as follows: 



    (a) Initial Reports. Within fifteen days of November 7, 2001, (i) (each certified by the Company's
Accountants), financial information regarding the Company and its Subsidiaries consisting of the consolidated balance sheet of the Company and its Subsidiaries as at April 1, 2000, and the
related consolidated statements of operations, investments by the Company's shareholders, and cash flows of the Company and its Subsidiaries for the fiscal years ended April 3, 1999 and
April 1, 2000 and the period from April 2, 2000 through October 9, 2000, in each case certified by a Responsible Officer of the Company as fairly presenting the consolidated and
consolidating financial position of the Company and its Subsidiaries as at the dates indicated and the results of their operations and cash flow for the periods indicated in accordance with GAAP
(subject to the absence of footnote disclosure and normal year-end audit adjustments) and (ii) updated Business Plans of K*TEC, EFTC and combined Business Plans, in each case for
the Fiscal Year beginning on January 1, 2002 reflecting such Business Plans on a month by month basis for such Fiscal Year. 





11





 




    (b) Monthly Reports. Within 30 days after the end of each fiscal month in each Fiscal Year (other than any fiscal
month ending on the last day of any of the first three Fiscal Quarters in any Fiscal Year), financial information regarding the Company and its Subsidiaries consisting of consolidated and
consolidating unaudited balance sheets as of the close of such month and the related statements of income and cash flow for such month and that portion of the current Fiscal Year ending as of the
close of such month, together with an analysis thereof by the management of the Company and setting forth in comparative form the figures for the corresponding period in the prior year (if applicable)
and the figures contained in the business plan provided pursuant to clause (f) of Section 6.1 (Financial
Statements) for the current Fiscal Year, in each case certified by a Responsible Officer of the Company as fairly presenting the consolidated and consolidating financial
position of the Company and its Subsidiaries as at the dates indicated and the results of their operations and cash flow for the periods indicated in accordance with GAAP (subject to the absence of
footnote disclosure and normal year-end audit adjustments). 


    (c) Quarterly Reports. Within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal
Year, financial information regarding the Company and its Subsidiaries consisting of consolidated and consolidating unaudited balance sheets as of the close of such Fiscal Quarter and the related
statements of income and cash flow for such Fiscal Quarter and that portion of the Fiscal Year ending as of the close of such Fiscal Quarter, together with an analysis thereof by the management of the
Company and setting forth in comparative form the figures for the corresponding period in the prior Fiscal Year (if available) and the figures contained in the business plan provided pursuant to  clause (f) of Section 6.1 (Financial Statements) for the current Fiscal Year, in each case
certified by a Responsible Officer of the Company as fairly presenting the consolidated and consolidating financial position of the Company and its Subsidiaries as at the dates indicated and the
results of their operations and cash flow for the periods indicated in accordance with GAAP (subject to the absence of footnote disclosure and normal year-end audit adjustments). 


    (d) Annual Reports. Within 90 days after the end of each Fiscal Year other than in respect of Fiscal Year 2000,
financial information regarding the Company and its Subsidiaries consisting of consolidated and consolidating balance sheets of the Company and its Subsidiaries as of the end of such year and related
statements of income and cash flows of the Company and its Subsidiaries for such Fiscal Year, all prepared in conformity with GAAP, together with an analysis thereof by the management of the Company
and setting forth in comparative form the figures for the corresponding period in the prior Fiscal Year (if available) and the figures contained in the business plan provided pursuant to  clause (f)
of Section 6.1 (Financial Statements) for such Fiscal Year, and certified, in
the case of such consolidated financial statements, without qualification as to the scope of the audit or as to the Company or any of its Subsidiaries being a going concern by the Company's
Accountants, together with the report of such accounting firm stating that (i) such financial statements fairly present the consolidated financial position of the Company and its Subsidiaries
as at the dates indicated and the results of their operations and cash flow for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except for changes with
which such Company's Accountants shall concur and that shall have been disclosed in the notes to the financial statements) and (ii) the examination by such Company's Accountants in connection
with such consolidated financial statements has been made in accordance with generally accepted auditing standards, and accompanied by a certificate stating that in the course of the regular audit of
the business of the Company and its Subsidiaries such accounting firm 





12





 




has obtained no knowledge that a Default or Event of Default has occurred and is continuing under the financial or debt covenants, or, if such accounting firm has knowledge that any such Default or
Event of Default has occurred and is continuing, a statement as to the nature thereof. 




    (2) Section 6.5 (Notices under Related Documents) to the Credit Agreement is hereby amended and restated in its
entirety to read as follows: 




Section 6.5 Notices under Related Documents  




    Promptly
after the sending or filing thereof, the Company shall send the Administrative Agent copies of all material notices, certificates or reports delivered pursuant to any Related
Document. Promptly after the issuance thereof, the Company shall send the Administrative Agent a copy of the Purchase Price Adjustment Note and any notices, certificates or reports delivered pursuant
thereto upon such issuance. 





13











  




    (3) Clause (e) of Section 6.12 (Borrowing Base
Determination) of the Credit Agreement is hereby amended and restated in its entirety to read as follows: 



    (e) For
the purposes of determining the value of Eligible Equipment and Eligible Real Property in effect on the Closing Date, (i) the orderly liquidation value
of the Borrowers' and their Eligible Subsidiaries' Eligible Equipment shall be determined using the valuations set forth in the appraisal dated November 28, 2000, by Emerald Technology
Valuations, LLC (and, in respect of Collateral owned by EFTC or any of its Subsidiaries on the EFTC Joinder Date, using the valuations set forth in a recent appraisal reasonably satisfactory to the
Administrative Agent and (ii) the Fair Market Value of the Borrowers' and their Eligible Subsidiaries' Eligible Real Property shall be determined using the valuations set forth in the appraisal
dated November 26, 2000 by CB Richard Ellis, Inc., as reflected in the Borrowing Base Certificate delivered to the Administrative Agent prior to the Closing Date (and, in respect of
Eligible Real Property (if any) of EFTC or any of its Subsidiaries on the EFTC Joinder Date, using the valuations set forth in a recent appraisal reasonably satisfactory to the Administrative Agent).
Such value shall be updated (x) on or after the 10th day following the EFTC Joinder Date (or, if the EFTC Joinder Date does not occur on or prior to the EFTC Merger Deadline, on the EFTC Merger
Deadline), by internal auditors of the Administrative Agent or based on new values obtained as a result of a "desktop review" conducted by a third-party appraiser satisfactory to the Administrative
Agent (in each case in form and substance satisfactory to the Administrative Agent), (y) on the third anniversary of the Closing Date, by internal auditors of the Administrative Agent or based
on new values obtained as a result of a "desktop review" conducted by a third-party appraiser satisfactory to the Administrative Agent (in each case in form and substance satisfactory to the
Administrative Agent) and (z) on the second and fourth anniversaries of the Closing Date, based on new appraisals obtained by the Borrowers at their own expense, and each in form and substance
and from an appraiser acceptable to the Administrative Agent. If any Eligible Equipment is sold by any Borrower or Eligible Subsidiary thereof in accordance with  clause (b) of Section 8.4 (Sale of Assets), then, the orderly liquidation value of the
remaining Eligible Equipment shall be determined (until the next appraisal, investigation, "desktop review" or other review conducted in accordance with this Agreement in respect of such Eligible
Equipment) by subtracting from the orderly liquidation value of the Eligible Equipment of such Borrower or Eligible Subsidiary prior to such sale the Net Cash Proceeds of such sale used to prepay the
Loans in accordance with clause (a) of Section 2.9 (Mandatory Prepayments). 




    (4) Section 6.15 (Repayment of Purchase Price Adjustment Note) of the Credit Agreement is hereby deleted in its
entirety (and all references thereto in any Loan Document are hereby deleted). 




   (viii) Amendment to Article VII (Affirmative Covenants)



    Clause (b) of Section 7.3 (Conduct of Business) of the Credit Agreement
is hereby amended and restated in its entirety to read as follows: 



    (b) Neither
RodniC LLC nor CathiO LLC shall conduct any business other than holding a general partnership interest and limited partnership interest respectively in
RandiC. From and after the EFTC Joinder Date, (i) EFTC Parent shall not conduct any business other than holding the Stock of Thayer-Blum and EFTC Delaware and
(ii) Thayer-Blum shall not conduct any business other than holding the shares of K*TEC and being the issuer of the Purchase Price Adjustment Note. For purposes of this 





14





 



 clause (b), "conduct business" shall include holding any asset and incurring any liability (other than tax liabilities incurred in the ordinary course of business). 





    (ix) Amendments to Article VIII (Negative Covenants)



    (1) Clause (i) of Section 8.1 (Indebtedness) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows: 



     (i) on
or before the consummation of the EFTC Merger, Subordinated Debt; provided,  however, that the aggregate principal amount of all Subordinated Debt having at
any time been incurred or maintained pursuant to this  clause (i), together with, without duplication, the aggregate principal amount of all Subordinated Debt having at any time been incurred or
maintained by Holdings in accordance with the Guaranty, in each case without giving effect to any repayment thereof and regardless of whether such Subordinated Debt has been repaid (either in whole or
in part) or otherwise remains outstanding, shall not exceed $25,000,000. 




    (2) Section 8.1 (Indebtedness) of the Credit Agreement is hereby amended by deleting the "and" at the end of  clause (h) thereof, replacing the period at the end
thereof with "; and" and then inserting a new  clause (j) at the end thereof to read in its entirety as follows: 



    (j)  the
Purchase Price Adjustment Note. 




    (3) Clause (b) of Section 8.4 (Sale of Assets) of the
Credit Agreement is hereby amended and restated in its entirety to read as follows: 



    (b) as
long as no Default or Event of Default is continuing or would result therefrom, the sale or disposition of equipment that has become obsolete or is replaced in
the ordinary course of business; provided, however, that the aggregate Fair Market Value of all such
equipment disposed of shall not exceed (i) $1,000,000 in any Fiscal Year prior to Fiscal Year 2002, (ii) $10,000,000 in Fiscal Year 2002 and (iii) $5,000,000 in any Fiscal Year
thereafter; and provided, further, that the Net Cash Proceeds of any Asset Sale made pursuant to  clause (ii) or (iii) above are used to prepay the Loans as provided in  clause (a) of Section 2.9 (Mandatory
Prepayments).




    (4) Section 8.5 (Restricted Payments) of the Credit Agreement is hereby amended and restated in its entirety to
read as follows (it being understood and agreed that such amendment and restatement shall not modify in any way the waiver (or the effect thereof) set forth in Section 1
(Waiver) hereof): 


    Section 8.5 Restricted Payments


    The
Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart any sum for any Restricted Payment except: 



    (a) Restricted
Payments by any Subsidiary of a Borrower to such Borrower or a Wholly-Owned Subsidiary of a Borrower; 


    (b) cash
dividends on the Stock of the Borrowers to the Company (if applicable) and on the Stock of the Company to Holdings paid and declared solely for the purpose of
funding the following: 



     (i) ordinary
operating expenses of Holdings not in excess of $2,000,000 in any Fiscal Year; 


    (ii) payments
by Holdings in respect of foreign, federal, state or local taxes owing by Holdings in respect of the Company and its Subsidiaries, but not greater 






15





 





than the amount that would be payable by the Company, on a consolidated basis, if the Company were the taxpayer; and 


    (iii) (A)
from and after the EFTC Joinder Date, payments of principal or interest (either when due or by voluntary prepayment) in cash on Pre-Merger
Subordinated Debt incurred by K*TEC prior to the consummation of the EFTC Merger in accordance herewith, assumed by Holdings and permitted under the Guaranty to be maintained by Holdings to the extent
(1) the proceeds of such Indebtedness were received by K*TEC and (2) such principal or interest is permitted to be paid under the terms of such Pre-Merger Subordinated Debt
and (B) from and after the EFTC Joinder Date, payments of interest when due in cash on other Subordinated Debt of Holdings permitted to be incurred or maintained by the Guaranty to the extent
(1) the proceeds of such other Subordinated Debt were received by K*TEC or, if such other Subordinated Debt was incurred by Holdings, were invested as a capital contribution in the Company, and
by the Company in EFTC or Thayer-Blum and, if received by Thayer-Blum, invested as a capital contribution in K*TEC and (2) such interest is permitted to be paid under
the terms of such other Subordinated Debt; 




    (c) the
Sponsor Dividend; 


    (d) from
and after the EFTC Joinder Date, Restricted Payments in respect of any adjustment to the exercise price of any warrants or options; 



    (e) from
and after the EFTC Joinder Date, Restricted Payments in respect of the repurchase of Stock or Stock Equivalents of Holdings from employees or directors
pursuant to the terms of any operative shareholder agreement to which Holdings is a party; provided,  however, that (i) the cash consideration payable
in respect of all such repurchases shall not exceed $1,000,000 in any Fiscal Year (including
amounts paid under the promissory notes referred to in clause (ii) below) and (ii) the balance of the consideration payable in respect of
all such repurchases shall be in the form of promissory notes of Holdings subordinate and junior in right of payment to the Obligations and otherwise in form and substance satisfactory to the
Administrative Agent; 


    (f)  cash
dividends on the Stock of the Borrowers to Thayer-Blum paid and declared solely for the purpose of funding the repayment of Indebtedness owing
under the Purchase Price Adjustment Note if such repayment is permitted under the terms thereof and, if paid and declared prior to the EFTC Joinder Date, if such repayment is adjudged by a court or
arbitrator of competent jurisdiction to be due and payable under the Purchase Price Adjustment Note; and 


    (g) any
cash payments in lieu of fractional shares in connection with the EFTC Merger; provided,  however, that the aggregate of all such payments does not exceed
five hundred thousand Dollars ($500,000); 



provided, however, that the Restricted Payments described in clauses (b),  (e) and (f)
 above shall not be permitted if (A) a Default or Event of Default shall have occurred
and be continuing at the date of declaration or payment thereof or would result therefrom, (B) such Restricted Payment is prohibited
under the terms of any Indebtedness (other than the Obligations) of the Company or any of its Subsidiaries or (C) in respect of any Restricted Payment described in  subclause (iii) of clause (b) above and  clause (f) above, the Minimum Liquidity Condition shall be satisfied both before and after giving effect to such Restricted Payment; and
 provided, further, that a Restricted Payment may be made after the EFTC Joinder Date pursuant to
clause (b)(i) above to pay the management fees 





16





 




authorized under clause (ii) of Section 8.9 (Transaction with Affiliates), irrespective of
whether any Default or Event of Default shall have occurred solely by reason of a breach of Article VI (Reporting Covenants) or  Article VII (Affirmative Covenants)
 (but such Restricted Payment shall not be made if any Default or Events of Default shall have occurred and be
continuing as a result of a breach of any other provision of the Credit Agreement or would occur as a result of such Restricted Payment). 




    (5) Section 8.6 (Prepayment of Long-Term Indebtedness) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows: 


    Section 8.6 Prepayment of Long-Term Indebtedness


    The
Company shall not, and shall not permit any of its Subsidiaries to, make any optional prepayment of principal, premium (if any), interest, fees (including fees to obtain any
waiver or consent in connection with any Security) or other charges on, or optional redemption, purchase, retirement, defeasance, sinking fund or similar payment with respect to, any long term
Indebtedness (including the Subordinated Debt but, in respect of Pre-Merger Subordinated Debt, only prior to the EFTC Joinder Date) of any Borrower or any of their respective Subsidiaries
or any other Loan Party. 


    (6) Clause (ii) of Section 8.9 (Transactions with
Affiliates) of the Credit Agreement is hereby amended by inserting in the next to last line thereof after the phrase "in the case of Holdings" immediately prior to the comma
the phrase "and in the case of management fees". 


    (7) Section 8.9 (Transactions with Affiliates) of the Credit Agreement is hereby amended by inserting a new  clause (ii) at the end thereof to read in its entirety
as follows: 




and
(iii) payment of up to $7,250,000 (in the aggregate for all such fees) in merger fees associated with the EFTC Merger. 





    (8) Section 8.10 (Restrictions on Subsidiary Distributions; No New Negative Pledge) is hereby amended by
inserting in the first line thereof immediately after "Other than pursuant to" the phrase "the Purchase Price Adjustment Agreement,". 


    (9) Section 8.13 (Modifications of Related Documents) is hereby amended by inserting in the first line thereof
immediately after "(a)" the phrase "other than to issue the Purchase Price Adjustment Note,". 




    (x) Amendment to Article IX (Events of Default)



    Clause (i) of Section 9.1 (Events of Default) of the Credit Agreement is
hereby amended and restated in its entirety to read as follows: 


     (i) any
material provision of any Collateral Document, the Guaranty or any other Loan Document after delivery thereof pursuant to this Agreement or any other Loan
Document shall for any reason cease to be valid and binding, or enforceable against, any Loan Party party thereto, or any Loan Party shall so state in writing; or 




    (xi) Amendment to Article X (The Administrative Agent; The Agents)



    Clause (b) of Section 10.7 (Concerning the Collateral and the Collateral
Documents) of the Credit Agreement is hereby amended by inserting "and" at the end of subclause (ii) thereof, deleting  subclause (iii) thereof in its entirety and renumbering accordingly the following subclause (iv) subclause
(iii). Each reference to such following subclause in any Loan Document (that is not an amendment to the Credit Agreement) as amended hereby is hereby amended accordingly to
refer to such subclause as renumbered. 




17





 




   (xii) Amendments to Schedules



    (1) The
contents of Schedule I (Revolving Credit Commitments) to the Credit Agreement are hereby amended and
restated in their entirety and replaced by the contents of Schedule I-A (Revolving Credit Commitments) hereto. 


    (2) Schedule 4.3 (Ownership of Subsidiaries) to the Credit Agreement is hereby renamed
"Stock Options; Ownership of Subsidiaries", each reference thereto in the Loan Documents is hereby amended accordingly, and the contents of such
Schedule are hereby amended and restated in their entirety and replaced by the contents of Schedule II (Stock Options; Ownership of Subsidiaries)  hereto. 




   (xiii) Amendments to the Guaranty



    (1) Subclause (ii) of clause (a) of  Section 16 (Representations and Warranties; Covenants) of the Guaranty is
hereby amended by deleting the phrase "except for
Thayer-Blum" at the beginning thereof. 


    (2) Clause (b) of Section 16 (Representations and Warranties;
Covenants) of the Guaranty is hereby deleted in its entirety and the following clauses in such Section 16 are hereby
renumbered accordingly clauses (b), (c) and the following. Each reference to any such following clause
in any Loan Document (that is not an amendment to the Credit Agreement) as amended hereby (including in clause (d) of  Section 9.1 (Events of Default) of the Credit Agreement) is hereby amended accordingly to refer to such clause as renumbered. 


    (3) Subclause (i) of Clause (d) of  Section 16 (Representations and Warranties; Covenants) of the Guaranty is hereby
amended and restated in its entirety to read as follows: 



     (i) directly
or indirectly create, incur, assume or otherwise become or remain directly or indirectly liable with respect to any Indebtedness except (A) the
Secured Obligations and (B) on or after the EFTC Joinder Date, the Subordinated Debt assumed by Holdings pursuant to clause (b)(v) of the
definition of "Permitted Acquisition" in the Credit Agreement and other Subordinated Debt (collectively, "Holdings Subordinated
Debt"); provided, however, that the aggregate principal amount of Subordinated
Debt having at any time been incurred or maintained pursuant to this clause (B), together with, without duplication, the aggregate principal
amount of Subordinated Debt having at any time been incurred or maintained pursuant to Section 8.1(i) of the Credit Agreement, in each case
without giving effect to any repayment thereof and regardless of whether such Subordinated Debt has been repaid (whether in whole or in part) or otherwise remains outstanding, shall not exceed
$25,000,000; 




    (4) Section 22 (Additional Guarantors) of the Guaranty is hereby amended and restated in its entirety to read as
follows: 


    Section 22 Additional Guarantors


    Each
of the parties hereto agrees that if, pursuant to the Credit Agreement, any Person shall be required to become a Guarantor hereunder or if, for any reason, any Person desires to
become a Guarantor hereunder, such Person shall execute and deliver to the Administrative Agent a Guaranty Supplement in substantially the form of Exhibit A (Guaranty
Supplement) attached hereto and shall thereafter for all purposes be a party hereto and have the same rights, benefits and obligations as a Guarantor party hereto on the
Closing Date. 


    (5) Exhibit A (Guaranty Supplement) to the Guaranty is hereby amended by replacing the phrase "[NAME
OF SUBSIDIARY GUARANTOR]" in the signature line thereof with the phrase "[NAME OF GUARANTOR]". 




18





 




   (xiv) Amendments to the Pledge and Security Agreement



    (1) Clause (b) of Section 1,1 (Definitions) of the Pledge
and Security Agreement is hereby amended by inserting therein the following terms in the appropriate place to preserve the alphabetical order of the definitions in such clause: 




"Deposit Account"

"Letter of Credit Right" 





    (2) The
following definitions for the following terms are hereby inserted in clause (c) of  Section 1.1 (Defined Terms) of the Pledge and Security
Agreement in the appropriate place to preserve the alphabetical order of the definitions
in such clause (and, if applicable, the following definitions shall replace in their entirety the existing definitions for the following terms in such clause): 



    "Blocked Account" means a Deposit Account maintained by any Grantor with a Blocked Account Bank, which Deposit Account is the subject
of an effective Blocked Account Letter, and includes all monies on deposit therein and all certificates and instruments, if any, representing or evidencing such Blocked Account. 


    "Cash Collateral Account" means any Deposit Account or Securities Account established by the Administrative Agent as provided in  Section 2.3 (Cash Collateral Accounts) in which cash and Cash Equivalents may from time to time be on deposit or held therein as provided in
Section 5.2 (Accounts and Payments in Respect of General Intangibles) and Section 5.4 (Proceeds to be Turned Over
to Administrative Agent) or the Credit Agreement. 


    "Copyright Licenses" means any written agreement naming any Grantor as licensor or licensee granting any right under any Copyright,
including the grant of rights to copy, publicly perform, create derivative works, manufacture, distribute, exploit and sell materials derived from any Copyright. 




    (3) The
following definitions are hereby deleted in their entirety from clause (c) of  Section 1.1 (Defined Terms) of the Pledge and Security Agreement:





"Excluded Property"

"Related Contract"

"Special Property" 





    (4) The
definition of "Uniform Commercial Code" in Section 1.1 (Defined
Terms) of the Pledge and Security Agreement is hereby amended by deleting in its entirety the last proviso therein. 


    (5) Each
of Sections 2.3 (Cash Collateral Accounts) and 3.9 (Deposit Accounts; Control
Accounts) of the Pledge and Security Agreement are hereby amended by replacing the term "deposit account" each time it appears therein with the capitalized term "Deposit
Account". 


    (6) All  clauses of Section 2.1 (Collateral) of the Pledge and
Security Agreement are hereby deleted in their entirety and replaced with the following: 



    (a) all
Accounts; 


    (b) all
Chattel Paper; 


    (c) all
Deposit Accounts; 


    (d) all
Documents; 


    (e) all
Equipment; 





19





 




    (f)  all General Intangibles; 


    (g) all
Instruments; 


    (h) all
Inventory; 


    (i)  all
Investment Property; 


    (j)  all
Letter of Credit Rights; 


    (k) all
Vehicles; 


    (l)  all
books and records pertaining to the other property described in this Section 2.1; 


    (m) all
other goods and personal property of such Grantor whether tangible or intangible wherever located; 


    (n) all
property of any Grantor held by the Administrative Agent or any other Secured Party, including all property of every description, in the possession or custody
of or in transit to the Administrative Agent or such Secured Party for any purpose, including safekeeping, collection or pledge, for the account of such Grantor or as to which such Grantor may have
any right or power; and 


    (o) to
the extent not otherwise included, all Proceeds. 




    (7) Section 2.2 (Grant of Security Interest in Collateral) of the Pledge and Security Agreement is hereby amended
by deleting in their entirety the two provisos therein. 


    (8) Section 3.2 (Perfection and Priority) of the Pledge and Security Agreement is hereby amended by deleting the
word "and" immediately prior to clause (iii) thereof, renumbering such clause (iii)
clause (v) (each reference to any such following clause in any Loan Document (that is not an amendment to the Credit Agreement) as amended hereby is hereby amended
accordingly to refer to such clause as renumbered) and inserting the following new clauses (iii) and  (iv) therein to read in their entirety as follows:




    (iii) the
execution of Blocked Account Agreements with respect to Investment Property not in certificated form, (iv) the execution of Blocked Account Letters
with respect to all Deposit Accounts (other than the Cash Collateral Account) and 




    (9) Section 3.3 (State of Incorporation) of the Pledge and Security Agreement is hereby amended by inserting the
phrase ", organizational number, if any," immediately after the phrase "jurisdiction of organization". 


    (10) Section 4.1 (Generally) of the Pledge and Security Agreement is hereby amended by inserting the word "not"
at the beginning of clause (d) thereof. 


    (11) Clause (a) of Section 4.3 (Changes in Location, Name,
Etc.) of the Pledge and Security Agreement is hereby amended by replacing in its entirety "state of incorporation" in the first line of subclause
(ii) thereof with "jurisdiction of organization" and deleting in its entirety the phrase "by the Administrative Agent" from the second line of subclause
(iii) thereof. 


    (12) Section 4.12 (Special Property) of the Pledge and Security Agreement is hereby deleted in its entirety
(together with any reference thereto in any Loan Document). 


    (13) Section 5.1 (Code and Other Remedies) of the Pledge and Security Agreement is hereby amended by deleting the
phrase ", including Section 9-504(1)(c) of the Uniform Commercial Code," starting in the 29th line thereof. 




20





 



    (14) Clause (e) of Section 5.2 (Accounts and Payments in Respect of General
Intangibles) of the Pledge and Security Agreement is hereby amended and restated in its entirety to read as follows: 



    (e) Upon
the request of the Administrative Agent at any time during the continuance of an Event of Default, each Grantor shall notify Account Debtors that the Accounts
or General Intangibles have been collaterally assigned to the Administrative Agent and that payments in respect thereof shall be made directly to the Administrative Agent. In addition, the
Administrative Agent may at any time during the continuance of an Event of Default enforce such Grantor's rights against such Account Debtors and, except as otherwise provided under the Uniform
Commercial Code, obligors of General Intangibles. 




    (15) Clause (a) of Section 5.3 (Pledged Collateral) of the
Pledge and Security Agreement is hereby amended by replacing the phrase "cash dividends, payments or other Proceeds paid in respect" in the third line thereof with the word "Proceeds". 


    (16) Section 5.6 (Waiver; Deficiency) of the Pledge and Security Agreement is hereby retitled "Deficiency" (and
each reference thereto in any Loan Document other than any amendment to the Credit Agreement is hereby amended accordingly) and is hereby amended by deleting in its entirety the first sentence
thereof. 


    (17) Section 7.10 (Additional Grantors) of the Pledge and Security Agreement is hereby amended and restated in
its entirety to read as follows: 


    Section 7.10 Additional Grantors


    Should,
pursuant to the Credit Agreement, any Person be required to become a Grantor hereunder, or should, for any reason, such Person wish to become a Grantor hereunder, such Person
shall execute and deliver to the Administrative Agent a Joinder Agreement in the form of Annex 4 (Joinder Agreement) and shall thereafter for all
purposes be a party hereto and have the same rights, benefits and obligations as a Grantor party hereto on the Closing Date. 


    (18) Each
of the third and fourth paragraph of Annex I to the Pledge and Security Agreement is hereby amended and
restated in its entirety to read as follows: 


    The
Company hereby transfers to the Administrative Agent exclusive control of the Account and all funds and other property on deposit therein. By your execution of this letter
agreement, you (i) agree that you will comply with instructions originated by the Administrative Agent directing disposition of the funds and other property on deposit in the Account without
further consent of the Company and (ii) acknowledge that the Administrative Agent now has exclusive control of the Account, that all funds in the Account shall be transferred to the
Administrative Agent as provided herein, that the Account is being maintained by you for the benefit of the Administrative Agent and that all amounts and other property therein are held by you as
custodian for the Administrative Agent. 


    Except
as provided in paragraphs (b)(iii) and (d) below, the Account shall not be
subject to deduction, set-off, banker's lien, counterclaim, defense, recoupment or any other right in favor of any person or entity other than the Administrative Agent. By your execution
of this letter agreement you also acknowledge that, as of the date hereof, you have received no notice of any other pledge or assignment of the Account and have not executed any 




21





 



agreements with third parties covering the disposition of funds in the Account. You agree with the Administrative Agent as follows: 


    (19) Subclause (ii) of clause (b) of  Annex I to the Pledge and Security Agreement is hereby amended by replacing the
reference to
"paragraph (c)" therein by a reference to "subclause (iii)". 



    (20) Annex 3 (Form of Pledge Amendment) to the Pledge and Security Agreement is hereby amended by replacing in the
fourth line thereof the words "and the other Subsidiaries of the Company from time to time party thereto as Grantors" with the words "and the other Grantors from time to time party thereto". 


    (21) Annex 4 (Form of Joinder Agreement) to the Pledge and Security Agreement is hereby amended by replacing in the
third line thereof the words ", Holdings and the Subsidiaries of the Company listed on the signature pages thereof" with the words "and the other Grantors from time to time party thereto". 



    (22) The
contents of Schedule 2 (Pledged Collateral) to the Pledge and Security Agreement are hereby amended and
restated in their entirety and replaced by the contents of Schedule III (Pledged Collateral) hereto. 





    (b) As of the EFTC Joinder Date


    The
Credit Agreement is, effective as of the EFTC Joinder Date, hereby amended as follows: 



     (i) Amendment to Article I (Definitions, Interpretation and Accounting Terms)


    A
new clause (c) is hereby added to Section 1.3 (Accounting Terms and
Principles) of the Credit Agreement to read in its entirety as follows: 



    (c) For
purpose of Article V (Financial Covenants), any calculation in respect of Fiscal Year 2002 or the first
Fiscal Quarter thereof shall be made pro forma as if the EFTC Merger had occurred on January 1, 2002. 




    (ii) Amendments to Article V (Financial Covenants)



    (1) Section 5.1 (Maximum Leverage Ratio) of the Credit Agreement is hereby amended and restated in its entirety
(and any reference in the Loan Documents to such Section 5.1 is hereby amended accordingly to refer to such clause using its new title) to read
as follows: 


    Section 5.1 Minimum EBITDA


    The
Company shall have, as of the last day of each Fiscal Quarter set forth below, EBITDA for the four Fiscal Quarters ending on such day (or with respect to the Fiscal Quarters
ending on or before September 30, 2002, the period commencing on January 1, 2002 




22





 



and ending on the last day of such Fiscal Quarter) of not less than the following (parentheses indicate a negative EBITDA): 




	Fiscal Quarter Ending on or about
 
	 	Minimum EBITDA
	 
	March 31, 2002	 	$	(12,000,000	)
	June 30, 2002	 	$	(12,000,000	)
	September 30, 2002	 	$	(12,000,000	)
	December 31, 2002	 	$	(10,000,000	)
	

March 31, 2003	
 	
$	

0	
 
	June 30, 2003	 	$	10,000,000	 
	September 30, 2003	 	$	17,500,000	 
	December 31, 2003	 	$	25,000,000	 
	

March 31, 2004	
 	
$	

26,000,000	
 
	June 30, 2004	 	$	27,000,000	 
	September 30, 2004	 	$	28,000,000	 
	December 31, 2004	 	$	30,000,000	 







    (2) Section 5.2 (Maintenance of Tangible Net Worth) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows: 


    Section 5.2 Maintenance of Tangible Net Worth


    On
each day during each Fiscal Quarter set forth below, the Company shall maintain a Tangible Net Worth of not less than the minimum amount set forth opposite such Fiscal Quarter: 




	Fiscal Quarter Ending on or about
 
	 	Minimum Tangible Net Worth

	March 31, 2002	 	$	122,400,000
	June 30, 2002	 	$	111,500,000
	September 30, 2002	 	$	105,600,000
	December 31, 2002	 	$	101,600,000
	

March 31, 2003	
 	
$	

101,400,000
	June 30, 2003	 	$	101,300,000
	September 30, 2003	 	$	101,900,000
	December 31, 2003	 	$	100,900,000
	

March 31, 2004	
 	
$	

101,100,000
	June 30, 2004	 	$	101,300,000
	September 30, 2004	 	$	101,500,000
	December 31, 2004	 	$	101,800,000






    (iii) Amendment to Schedules


    The
contents of Schedule I (Revolving Credit Commitments) to the Credit Agreement, as may have been amended prior to the EFTC
Joinder Date by Section 2(a)(xii)(1) (Amendments; As of the Amendment Effective Date) above, are hereby amended and restated in entirety and
replaced by the contents of Schedule I-B (Revolving Credit Commitments) hereto. 



23





 

 Section 3. Conditions Precedent to the Effectiveness of this Amendment  




    (a) This
Amendment (other than Section 2(b) (Amendments; As of the EFTC Joinder Date) above) shall become
effective when, and only when, each of the following conditions precedent shall have been satisfied (the "Amendment Effective Date"): 



     (i) Certain Documents. The Administrative Agent shall have received, on or before the Amendment Effective Date, all of
the following, each in form and substance satisfactory to it: 



    (1) this
Amendment, executed by the Borrower, each Guarantor, the Administrative Agent and each Lender; 


    (2) the
Syndication Side Letter, dated as of November 7, 2001, executed by the Borrower, the Administrative Agent and the Arranger; and 


    (3) such
additional documentation as the Administrative Agent or the Lenders may reasonably require. 



    (ii) Corporate and Other Proceedings. All corporate and other proceedings, and all documents, instruments and other
legal matters in connection with the transactions contemplated by this Amendment shall be satisfactory in all respects in form and substance to the Administrative Agent and each Lender. 


    (iii) No Event of Default. After giving effect to this Amendment (other than Section 2(b)
(Amendments; As of the EFTC Joinder Date) above), no Default or Event of Default (except for those that may have been duly waived) shall have occurred and be continuing on the
date hereof or the Amendment Effective Date. 


    (iv) Fees and Expenses Paid. The Borrower shall have paid all Obligations due on or before the later of the date hereof
and the Amendment Effective Date including, without limitation, all costs and expenses of the Administrative Agent in connection with the preparation, reproduction, execution and delivery of this
Amendment and all other Loan Documents entered into in connection herewith (including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Administrative Agent with
respect thereto and all other Loan Documents) and all costs, expenses and fees due under any Loan Document. 






    (b) Section 2(b) (Amendments; As of the EFTC Joinder Date) above shall become effective when, and only when, each
of the following conditions precedent shall have been satisfied (the "Merger Amendments Effective Date and, together with the Amendment Effective Date,
the "Effective Dates"): 





     (i) Each
of the Amendment Effective Date and EFTC Joinder Date shall have occurred. 


    (ii) Fees and Expenses Paid. The Borrower shall have paid Obligations due on or before the Merger Amendment Effective
Date including, without limitation, all costs and expenses of the Administrative Agent in connection with the preparation, reproduction, execution and delivery of this Amendment and all other Loan
Documents entered into in connection herewith, including the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent with respect thereto and all
other Loan Documents and payment of all costs, expenses and fees due under any Loan Document. 


    (iii) Certain Documents. The Administrative Agent shall have received, on or before the Merger Amendment Effective Date,
in form and substance satisfactory to the Administrative Agent, such additional documentation as the Administrative Agent or the Lenders may reasonably require. 





24





 




 Section 4. Fees and Expenses  




    The Borrower agrees to pay on demand in accordance with the terms of Section 11.3 (Costs and Expenses)
of the Credit Agreement all costs and expenses of the Administrative Agent in connection with the preparation, reproduction, execution and delivery of this Amendment and all other Loan Documents
entered into in connection herewith, including, without limitation, the reasonable fees, expenses and disbursements of counsel for the Administrative Agent with respect thereto. 



 Section 5. Representations and Warranties  




    On and as of the date hereof, and as of each Effective Date, after giving effect, in respect of the date hereof, to the waivers and amendments set forth herein
effective as of the Amendment Effective Date and, in respect of an Effective Date, to the waivers and amendments made by this Amendment as of such Effective Date (collectively, the
"Effective Amendments"), the Borrower hereby represents and warrants to the Administrative Agent and each Lender as follows: 



    (a) this
Amendment has been duly authorized, executed and delivered by the Borrower and each Guarantor and constitutes a legal, valid and binding obligation of the
Borrower and each Guarantor, enforceable against the Borrower and each Guarantor in accordance with its terms and the Credit Agreement, as amended by the Effective Amendments, constitutes the legal,
valid and binding obligation of the Borrower and each Guarantor, enforceable against the Borrower and each Guarantor in accordance with its terms; 


    (b) each
of the representations and warranties contained in Article IV (Representations
and Warranties) of the Credit Agreement, the other Loan Documents or in any certificate, document or financial or other statement furnished at any time under or in connection
therewith are true and correct in all material respects on and as of the date hereof and such Effective Date, in each case as if made on and as of such date and except to the extent that such
representations and warranties specifically relate to a specific date, in which case such representations and warranties shall be true and correct in all material respects as of such specific date;  provided, however, that references therein to the "Credit
Agreement" shall be deemed to refer to the Credit Agreement as amended by the Effective Amendments; and 


    (c) no
Default or Event of Default has occurred and is continuing (except for those that are duly waived). 



 Section 6. Reference to the Effect on the Loan Documents  




    (a) As
of each Effective Date, each reference in the Credit Agreement to "this Agreement,"
"hereunder," "hereof," "herein," or words of like
import, and each reference in the other Loan Documents to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby as of such Effective Date, and this Amendment
and the Credit Agreement shall be read together and construed as a single instrument. The table of contents, signature pages and list of Exhibits and Schedules of the Credit Agreement shall be amended
to reflect the changes made in this Amendment as of such Effective Date. 


    (b) Except
as expressly amended hereby or specifically waived above, all of the terms and provisions of the Credit Agreement and all other Loan Documents are and shall
remain in full force and effect and are hereby ratified and confirmed. 


    (c) The
execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the
Lenders, Issuers, Arranger or the Administrative Agent under any of the Loan Documents, nor constitute a waiver or amendment of any other provision of any of the Loan Documents or for any purpose
except as expressly set forth herein. 


25





 


    (d) This Amendment is a Loan Document. 



 Section 7. Execution in Counterparts  




    This Amendment may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart
so that all signature pages are attached to the same document. Delivery of an executed counterpart by telecopy shall be effective as delivery of a manually executed counterpart of this Amendment. 



 Section 8. Guarantors Consent  




    Each Guarantor hereby consents to this Amendment and agrees that the terms hereof shall not affect in any way its obligations and liabilities under the Loan
Documents (other than because of the amendments to the Guaranty set forth herein), all of which obligations and liabilities shall remain in full force and effect and each of which is hereby reaffirmed
(as amended by the amendments to the Guaranty set forth herein). 



 Section 9. Governing Law  




    This Amendment shall be governed by and construed in accordance with the law of the State of New York. 



 Section 10. Headings  




    The headings contained in this Amendment are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement
between the parties hereto. 



 Section 11. Notices  




    All communications and notices hereunder shall be given as provided in the Credit Agreement. 



 Section 12. Severability  




    The fact that any term or provision of this Agreement is held invalid, illegal or unenforceable as to any person in any situation in any jurisdiction shall not
affect the validity, enforceability or legality of the remaining terms or provisions hereof or the validity, enforceability or legality of such offending term or provision in any other situation or
jurisdiction or as applied to any person 



 Section 13. Successors  




    The terms of this Amendment shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns. 



 Section 14. Waiver of Jury Trial  




    EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AMENDMENT OR ANY OTHER
LOAN DOCUMENT.


[SIGNATURE PAGES FOLLOW] 


26





 


    IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers and general partners
thereunto duly authorized, as of the date first above written. 



	 	 	K*TEC ELECTRONICS HOLDING

  CORPORATION,

  as Borrower
	

 	
 	

By:	

/s/ R. MICHAEL GIBBONS   
 Name: R. Michael Gibbons

Title: President
	

 	
 	
CITICORP USA, INC.,

  as Administrative Agent and Lender
	

 	
 	

By:	

/s/ JAMES R. WILLIAMS   
 Name: James R. Williams

Title: Vice President




27





 


	 	 	Guarantors:
	

 	
 	
K*TEC ELECTRONICS HOLDING

  CORPORATION,
	

 	
 	

By:	

/s/ R. MICHAEL GIBBONS   
 Name: R. Michael Gibbons

Title: President
	

 	
 	
THAYER-BLUM FUNDING II, L.L.C.
	

 	
 	

By:	

/s/ MICHAEL B. SWEENY   
 Name: Michael B. Sweeny

Title: Manager
	

 	
 	
RODNIC LLC
	

 	
 	

By:	

/s/ R. MICHAEL GIBBONS   
 Name: R. Michael Gibbons

Title: President
	

 	
 	
CATHIO LLC
	

 	
 	

By:	

/s/ R. MICHAEL GIBBONS   
 Name: R. Michael Gibbons

Title: President
	

 	
 	
K*TEC ELECTRONICS L.P. (FORMERLY KNOWN AS RANDIC LP)

its general partner
	

 	
 	

By:	

RodniC LLC,

its general partner
	

 	
 	

By:	

/s/ R. MICHAEL GIBBONS   
 Name: R. Michael Gibbons

Title: President




28









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AMENDMENT NO. 1 AND WAIVER TO K*TEC ELECTRONICS HOLDING CORPORATION CREDIT AGREEMENT, GUARANTY AND PLEDGE AND SECURITY AGREEMENT

W I T N E S S E T H