Exhibit 10
SIXTH AMENDMENT TO CREDIT AGREEMENT
This Amendment, dated as of February 13, 2002, 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
(herein collectively called the "Banks" and individually each called a "Bank"),
and ▇▇▇▇▇ 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 and a Fifth
Amendment to Credit Agreement dated as of September 30, 2001 (as so amended and
as further amended or restated from time to time, the "Credit Agreement").
B. Under Section 2.9(b) of the Credit Agreement, the Borrower is required
to make installment payments on the Term Notes on the first day of January,
April, July and October of each year. On January 1, 2002, the Borrower failed to
make the required payment on the Term Notes (the "Payment Default").
C. The Borrower has requested that the Banks and the Agent, among other
things, agree to accept two installment payments in lieu of the payment that was
due and owing on January 1, 2002, waive certain defaults and provide other
accommodations.
D. 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:
"Sixth Amendment" means the Sixth Amendment to Credit Agreement, dated
as of February 13, 2002, by and among the Borrower, the Banks and the
Agent.
"Margin" means, with respect to computation of the applicable interest
rate on Fundings under a Facility, without regard to the Borrower's
Leverage Ratio and status: (a) until the aggregate principal amount
outstanding under the Term Note is less than $8,000,000 and the Borrower is
not in default under the Credit Agreement, two percent (2.00%) for Floating
Rate Advances and three and three-quarters percent (3.75%) for Eurodollar
Advances, and (b) after the aggregate principal amount outstanding under
the Term Note is less than $8,000,000 and so long as the Borrower is not in
default under the Credit Agreement, one and one-half percent (1.50%) for
Floating Rate Advances and three and one-quarter percent (3.25%) and for
Eurodollar Advances.
"Revolving Commitment Amount" shall mean Three Million Five Hundred
Thousand Dollars ($3,500,000), being the maximum amount of the Revolving
Commitments of all Banks, in the aggregate, to make Revolving Advances to
the Borrower pursuant to Section 2.1, subject to reduction in accordance
with Section 2.14(a).
2. Eurodollar Advances. As of the date this Amendment is executed, the
Borrower shall not be permitted to request any additional Eurodollar Advances
under the Credit Agreement. All requests for Advances shall be considered
requests for Floating Rate Advances. Notwithstanding the forgoing, as of the
date of this Amendment, any existing and outstanding Eurodollar Advances (the
"Existing Eurodollar Advances") shall remain outstanding as such until
expiration of the applicable Interest Period, whereupon such Eurodollar Advances
shall be converted to Floating Rate Advances. Prior to the expiration of the
Interest Period, such Existing Eurodollar Advances shall be treated as
`Eurodollar Advances' for all purposes under the Credit Agreement, including but
not limited to the calculation of interest thereunder.
3. Covenant Waiver. The requirements of Section 5.9 regarding the
Borrower's Minimum Interest Coverage Ratio, Section 5.10 regarding the
Borrower's Maximum Leverage Ratio, Section 5.11 regarding the Borrower's Minimum
Net Worth, and Section 5.12 regarding Borrower's Profitability, in each case as
of December 31, 2001 are waived by Banks. Such waivers are limited to the
December 31, 2001 Covenant Computation Date.
4. January 2002 Payment. The Borrower hereby agrees to fully satisfy the
amounts due and owing to the Banks that were otherwise due and owing to the
Banks on January 1, 2002 by paying the Agent $1,562,500 as follows: (a) $781,250
upon the
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execution of this Agreement (the "Initial Payment"); and (b) $781,250 on or
before February 28, 2002 (the "Final Payment"). Upon the date this Amendment is
effective, the Agent shall waive the Payment Default. In consideration for the
waiver contained in this paragraph 4, the Borrower shall pay the Agent a fee of
$35,000, which shall be due and owing to the Agent as of the date of this
Amendment is executed. The Borrower's failure to make the payments as set forth
in this pararagraph 4 shall constitute an Event of Default under the Credit
Agreement.
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 February 14, 2002:
(a) This Amendment, duly executed by the Agent, the Banks and the
Borrower, and duly acknowledged by the Guarantors;
(b) A certified copy of the resolutions of the Board of Directors of
the Borrower evidencing that the officers of the Borrower have authority to
enter into this Amendment and the transactions contemplated by this
Amendment (which resolutions may, at the option of the Agent, be in the
form of ratifying resolutions);
(c) Payment of the Initial Payment;
(d) Payment of the fee referenced in paragraph 4; and
(e) Payment of all legal fees incurred by the Agent through the date
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 its respective
Acknowledgment and Agreement set forth below, each hereby absolutely and
unconditionally releases and forever discharges the Agent and each of the Banks,
and any and all participants, parent corporations, subsidiary corporations,
affiliated corporations, insurers, indemnitors, successors and assigns thereof,
together with all of the present and former directors, officers, agents and
employees of any of the foregoing (the "Released Parties"), 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
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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 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.
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[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
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Its
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▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, formerly known as Norwest
Bank Minnesota, National Association, as
Bank and as Agent
By
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Its
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U.S. BANK NATIONAL ASSOCIATION, as Bank
By
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Its
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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 Guarantor
Security Agreement and any other Loan Documents to which it is a party; and (d)
acknowledges that the Agent and the Banks may amend, restate, extend, renew, or
otherwise modify the Credit Agreement or any other Loan Document or any
indebtedness or agreement of the Borrower in favor of the Agent and/or the
Banks, or enter into any agreement or extend additional or other credit
accommodations to the Borrower, without notifying or obtaining the consent of
the undersigned and without impairing the liability of the undersigned under its
Guaranty, its Guarantor Security Agreement and any other Loan Documents to which
it is a party.
INNOVEX PRECISION COMPONENTS, INC.
By
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Its
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INNOVEX SOUTHWEST, INC.
By
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Its
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ADFLEX CAYMAN LIMITED
By
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Its
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