10-Q

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934

[x] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934.

For the Period ended March 31, 2001.

OR

[  ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934.

Commission File Number: 0-13143

INNOVEX, INC.
(Exact name of registrant as specified in its charter)

Minnesota	41-1223933
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification No.)
5540 Pioneer Creek Drive, Maple Plain, Minnesota	55359-9003
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:   (763) 479-5300

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes – X       No

As of May 1, 2001, 14,999,177 shares of the registrant’s common stock, $.04 par value per share, were outstanding.

Exhibit Index, page 12

PART I: ITEM 1 FINANCIAL INFORMATION

INNOVEX, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (unaudited)

ASSETS	March 31, 2001		September 30, 2000
Current assets:
Cash and equivalents	$	1,343,155	$	1,673,486
Short-term investments		5,000		5,000
Accounts receivable, net		17,723,345		23,834,538
Inventories		18,180,361		21,570,553
Income taxes receivable		–		2,182,924
Other current assets		6,326,117		7,311,184
Total current assets		43,577,978		56,577,685
Property, plant and equipment, net of accumulated depreciation
of $21,270,000 and $17,955,000		88,448,507		94,519,926
Intangible and other assets, net of accumulated amortization of
$1,162,000 and $1,326,000		3,477,876		7,089,649
Deferred income taxes		9,445,162		9,445,162
Other assets		47,653		47,470
	$	144,997,176	$	167,679,892
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	7,714,902	$	7,198,411
Line of credit		12,500,000		9,700,000
Accounts payable		17,060,133		24,872,142
Accrued compensation		1,898,904		2,173,881
Other accrued liabilities		13,436,437		6,336,127
Total current liabilities		52,610,376		50,280,561
Long-term debt, less current maturities		19,436,564		21,003,284
Stockholders’ equity:
Common stock, $.04 par value; 30,000,000 shares authorized,
14,999,177 and 14,930,286 shares issued and outstanding		599,967		597,211
Capital in excess of par value		17,531,012		17,086,609
Retained earnings		54,819,257		78,712,227
Total stockholders’ equity		72,950,236		96,396,047
	$	144,997,176	$	167,679,892

See accompanying notes to condensed consolidated financial statements.

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INNOVEX, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)

	Three Months Ended March 31,
	2001			2000
Net sales	$	34,936,271		$	41,388,132
Costs and expenses:
Cost of sales		31,838,482			36,741,374
Selling, general and administrative		4,480,082			4,142,925
Engineering		1,889,599			1,867,391
Asset impairment		9,754,043
Restructuring charges		10,618,896			–
Net interest (income) expense		838,207			587,543
Net other (income) expense		(35,333	)		(321,392	)
Income (loss) before taxes		(24,447,705	)		(1,629,709	)
Provision for income taxes		(1,181,682	)		(473,071	)
Net income (loss)	$	(23,266,023	)	$	(1,156,638	)
Net income (loss) per share:
Basic	$	(1.55	)	$	(0.08	)
Diluted	$	(1.55	)	$	(0.08	)
Weighted average shares outstanding:
Basic		14,985,008			14,826,407
Diluted		14,985,008			14,826,407

	Six Months Ended March 31,
	2001			2000
Net sales	$	73,513,155		$	86,112,757
Costs and expenses:
Cost of sales		64,388,662			76,750,823
Selling, general and administrative		8,685,113			8,378,767
Engineering		3,585,164			3,571,506
Asset impairment		9,754,043			6,605,357
Restructuring charges		10,618,896			7,179,728
Net interest (income) expense		1,757,230			1,114,372
Net other (income) expense		54,776			(126,732	)
Income (loss) before taxes		(25,330,729	)		(17,361,064	)
Provision for income taxes		(1,437,759	)		(5,035,164	)
Net income (loss)	$	(23,892,970	)	$	(12,325,900	)
Net income (loss) per share:
Basic	$	(1.60	)	$	(0.83	)
Diluted	$	(1.60	)	$	(0.83	)
Weighted average shares outstanding:
Basic		14,972,567			14,821,592
Diluted		14,972,567			14,821,592

See accompanying notes to condensed consolidated financial statements.

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INNOVEX, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)

	Six Months Ended March 31,
	2001			2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(23,892,970	)		(12,325,900	)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization		6,481,444			6,002,753
Restructuring and asset impairment charges		20,372,939			13,785,085
Other non-cash items		711,933			(270,311	)
Changes in operating assets and liabilities net of business
acquisitions and restructurings:
Accounts receivable		6,111,193			(673,331	)
Inventories		1,754,763			668,228
Other current assets		884,603			(1,018,378	)
Accounts payable		(7,812,009	)		(3,756,894	)
Other liabilities		(2,879,855	)		(3,444,280	)
Income taxes payable		2,904,644			(4,672,724	)
Net cash provided by (used in) operating activities		4,636,685			(5,705,752	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(7,256,881	)		(16,495,523	)
Business acquisition		–			(3,750,000	)
Proceeds from sale of assets		92,935			24,630
Maturities of held-to-maturity securities		–			19,305,000
Net cash provided by (used in) investing activities		(7,163,946	)		(915,893	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt		(3,591,470	)		(167,254	)
Issuance of long-term debt		2,541,241			785,767
Net activity on line of credit		2,800,000			5,836,069
Proceeds from exercise of stock options and employee stock
purchase plan		447,159			48,420
Dividends paid		–			(592,948	)
Net cash provided by (used in) financing activities		2,196,930			5,910,054
Increase (decrease) in cash and equivalents		(330,331	)		(711,591	)
Cash and equivalents at beginning of year		1,673,486			6,231,430
Cash and equivalents at end of period	$	1,343,155		$	5,519,839

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest was $1,657,290 and $1,152,000 in fiscal 2001 and 2000, respectively.

Income tax payments were $-0- and $221,000 in fiscal 2001 and 2000, respectively.

See accompanying notes to condensed consolidated financial statements.

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INNOVEX INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements

NOTE 1 – FINANCIAL INFORMATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions on Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of Innovex, Inc. and its subsidiaries (the “Company”) after elimination of all significant intercompany transactions and accounts. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of operating results have been made. Operating results for interim periods are not necessarily indicative of results that may be expected for the year as a whole. The Company utilizes a fiscal year that ends on the Saturday nearest to September 30. For clarity of presentation, the Company has described all periods as if they end at the end of the calendar quarter. For further information, refer to the consolidated financial statements and footnotes included in the registrant’s annual report on Form 10-K for the year ended September 30, 2000.

Preparation of the Company’s condensed consolidated financial statements requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and related revenues and expenses. Actual results could differ from these estimates.

NOTE 2 – RESTRUCTURING CHARGES

2001 manufacturing operations restructuring-
The fiscal 2001 second quarter includes asset impairment and restructuring charges of $9,754,000 and $10,124,000 related to the restructuring of the Company’s manufacturing operations. The restructuring is primarily related to moving manufacturing operations from the Company’s Chandler, Arizona facility to the Company’s Minnesota locations. The charges were recorded pursuant to a plan announced in January 2001. The charge included approximately $6,380,000 related to asset impairment of property and equipment and $3,374,000 for the impairment of the remaining unamortized balance of the goodwill recorded at the time of the Company’s September 1999 acquisition of ADFlex Solutions, Inc. The charge also includes $1,636,000 of inventory written off related to discontinued product lines and accrued liabilities of $2,156,000 for employee severance and benefits and $6,332,000 for facility abandonment costs.The restructuring is expected to be substantially complete by the end of the fiscal year with the exception of the costs accrued to maintain the leased Chandler facility through the June 2003 lease termination.

2000 manufacturing operations restructuring-
The fiscal 2000 first quarter includes a $13,785,085 restructuring charge related to restructuring the Company’s manufacturing operations. The restructuring is primarily related to moving operations from the Company’s Agua Prieta, Mexico facility to its new facility in Lamphun, Thailand. The charge was recorded pursuant to a plan announced in November 1999. The charge included approximately $6,605,000 related to asset impairment of property and equipment, $356,000 for the write off of inventory and supplies, $176,000 for increasing the accounts receivable reserve, and accrued liabilities of $2,101,000 for facility abandonment costs and $4,547,000 in employee severance and benefits. A change in estimate was recorded in the quarter ending September 2000 increasing the facility abandonment accrual by $1,435,000 and decreasing the accrued employee severance by $1,485,000. The estimate changes were due to higher costs than expected to discontinue the operation of the Mexican facility and higher turnover than expected prior to the payment of severance. The restructuring was substantially complete as of September 2000 with the exception of completing the disposition of the Mexican facility. During the quarter ending March 31, 2001, the Company had a $495,000 increase in the estimate of the facility abandonment charges relating to the length of time required to complete the disposition of the facility located in Agua Prieta, Mexico.

The remaining restructuring accrual as of March 31, 2001 totaled $8,874,000. Selected information regarding the restructuring follows (in thousands):

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	Manufacturing Operations Restructuring – Arizona						Manufacturing Operations Restructuring – Mexico
	Facility Abandonment Charges			Employee Termination Benefits			Facility Abandonment Charges			Employee Termination Benefits			Total
Accrual at December 31,
2000	$	–		$	–		$	730		$	147		$	877
Changes in estimate		–			–			495			–			495
Establishment of accrual		6,332			2,156			–			–			8,488
Payments		(439	)		(132	)		(404	)		(11	)		(986	)
Accrual remaining at
March 31, 2001	$	5,893		$	2,024		$	821		$	136		$	8,874

NOTE 3 – EARNINGS PER SHARE

The Company’s basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of outstanding common shares. The Company’s diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of outstanding common shares and common share equivalents relating to stock options when dilutive. Options to purchase 1,046,806 and 926,028 shares of common stock with a weighted average exercise price of $13.90 and $14.36 were outstanding during the three and six month periods ending March 31, 2001, but were excluded from the computation of common share equivalents because they were not dilutive. Options to purchase 731,150 and 751,560 shares of common stock with a weighted average exercise price of $14.70 and $14.71 were outstanding during the three month and six month periods ending March 31, 2000, but were excluded from the computation of common share equivalents because they were not dilutive.

NOTE 4 – INVENTORIES

Inventories are comprised of the following (in thousands):

	March 31, 2001		September 30, 2000
Raw materials and purchased parts	$	9,071	$	11,804
Work-in-process and finished goods		9,109		9,767
	$	18,180	$	21,571

PART I: ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE COMPANY
In the fiscal 1999 fourth quarter, Innovex, Inc. and its subsidiaries (the “Company”) acquired ADFlex Solutions, Inc. (“ADFlex”) for approximately $37 million. At that time, the Company also obtained credit facilities totaling in principal amount $40 million, which were utilized to refinance ADFlex’s outstanding debt, pay down current liabilities and pay related transaction costs. Prior to the acquisition, ADFlex was a leading supplier of flexible circuit based solutions to the computer, computer peripheral, communications and consumer electronics industries. Applications for these flex-based interconnects include cellular phones, hard disk drives, other storage systems, high-end consumer products, notebook computers, pagers and personal communication systems. ADFlex’s diverse customer and industry base has reduced Innovex’s reliance on the disk drive industry.

Prior to the ADFlex acquisition, the Company had one primary operating group, Innovex Precision Components. The Company has combined the ADFlex operation into its existing operations as both operations design and manufacture flexible circuits.

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Prior to fiscal 1999, the Company operated through three divisions, Precision Products (Precision), Litchfield Precision Components (LPC) and Iconovex. Each division had its own administrative, engineering, manufacturing and marketing organizations. During the quarter ending September 30, 1998, the Company combined the operations of its two core operating divisions, Precision and LPC into one operating division, Innovex Precision Components. The combination merged the rapidly growing LPC flexible circuit fabrication and chemical etching operations with Precision’s high volume fine wire manufacturing expertise. The combination also allowed Innovex to leverage Precision’s disk drive industry market and trade knowledge to disk drive industry flexible circuit applications as the industry transitioned from wire interconnects.

Prior to the divisional combination, the largest division, Precision, developed, engineered and manufactured specialty precision electromagnetic products for original equipment manufacturers (“OEM’s”). Lead wire assemblies for the thin film disk drive market were the division’s primary product. Lead wire assemblies are fine twisted magnet wires that connect the back end electronics of a disk drive with the inductive or magneto resistive thin film heads that read and write information on the disk. Since the divisional combination, the lead wire assembly revenue declined as anticipated. As a result, during the fiscal 1999 fourth quarter, charges of $2.8 million were recorded to account for the discontinuance of this product line.

LPC, prior to the fiscal 1998 divisional combination, designed and manufactured highly complex flexible circuitry and chemically machined components for computer, computer peripheral, medical and other applications. The Company purchased Litchfield Precision Components, Inc. on May 16, 1996. This acquisition reduced the Company’s reliance on the disk drive industry while providing an entry into the large and rapidly growing flexible circuit market. Innovex’s flexible circuit operation is one of a limited number of operations in the world able to produce flexible circuits with line and spacing tolerances of less than 2 mils for the high-end portion of the flexible circuit market.

Innovex, Inc. was incorporated under the laws of the State of Minnesota in 1972. Its principal executive offices are located at 5540 Pioneer Creek Drive, Maple Plain, Minnesota 55359-9003 and its telephone number is (763) 479-5300. Products are developed and manufactured through the Company’s wholly owned subsidiaries, Innovex Precision Components, Inc., Innovex Southwest, Inc., Innovex (Thailand) Ltd. and Innovex Ltd. Innovex Precision Components, Inc. and Innovex Ltd. are Minnesota corporations. Innovex Southwest, Inc. is a Delaware corporation and Innovex (Thailand) Ltd. is a Thailand corporation.

RESULTS OF OPERATIONS

NET SALES
The Company’s net sales from operations totaled $34,936,000 for the quarter, down 16% from $41,388,000 reported in fiscal 2000. Sales of $73,513,000 for the six months ended March 31, 2001 decreased 15% from the prior year period. The decrease in net sales for the first quarter and six months ended March 31, 2001 was due to lower revenue generated by standard flexible circuit product lines associated with the ADFlex Solutions acquisition in late 1999. Revenue generated by the acquired ADFlex Solutions operation declined throughout fiscal 2000 as a result of quality, cost and customer service issues existing at the time of purchase. These issues have been addressed and revenue increases are expected from these product lines in the last half of fiscal 2001.

Revenue from the disk drive industry generated 60% of the Company’s revenue for the quarter. In addition, 12% of the revenue was generated by flexible circuits for consumer applications, 17% from network system applications and 11% from applications for other industries. The acquisition of ADFlex has reduced the Company’s dependence on the disk drive industry significantly from its historical levels of 85-90% of revenue. Although revenue growth for the next quarter will be limited as a result of the current economic conditions, the last half of fiscal 2001 should benefit from continued growth in demand for high technology flexible circuit products including the Company’s Flex Suspension Assembly (FSA). Significant progress has been made in gaining customer acceptance of the Company’s FSA product that will be integral to increasing revenue.

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GROSS MARGINS
The Company’s gross profit as a percent of sales for the quarter decreased to 9% from the 11% reported for the fiscal 2000 second quarter. The gross profit as a percent of sales for the first six months increased to 12%, from the 11% reported for the same period last year. The decrease for the quarter was due to duplicate costs related to the transfer of manufacturing operations from Chandler Arizona to the Company’s Minnesota facilities and the reduced fixed cost leverage resulting from lower revenue during the quarter. The increase for the six month period was due to yield and efficiency improvements related to manufacture of the high technology flexible circuits. These improvements offset the unfavorable impact on gross margins resulting from the lower revenue level of the standard flexible circuits.

The Company anticipates that gross margins in the last quarter of fiscal 2001 will improve as a result of the cost reductions and improved efficiencies related to closing the Chandler manufacturing facility. Near term gross margins will continue to be negatively impacted due to the duplicate costs of ramping up production at the Company’s Minnesota operations while discontinuing the Chandler operation. Revenue increases during the last half of 2001 should also have a favorable impact on gross margins.

OPERATING EXPENSES
Operating expenses were 18.2% of sales for the current quarter, as compared to 14.5% in the prior year’s first quarter. Operating expenses for the first six months of fiscal 2001 were 16.7%, up from 13.9% from the prior year first six months. The increase in operating expenses as a percent of sales for the current year is primarily due to decreased revenue generated by the standard flexible circuit product lines. Total operating expenditures increased slightly for the same periods last year primarily due to increased research and development spending related to the development of a materials manufacturing process. Fiscal 2001 operating expenses are expected to remain at similar levels for the remainder of fiscal 2001.

RESTRUCTURING CHARGES
Asset impairment and restructuring charges of $20,372,939 were recorded during the second quarter of fiscal 2001 related to the restructuring of the Company’s manufacturing operations. The restructuring is primarily related to closing the Company’s manufacturing facility in Chandler, Arizona. The majority of this charge included the accrual of employee severance and facility abandonment costs, the asset impairment of property, equipment and goodwill and the write-off of inventory related to discontinued product lines. The restructuring is expected to significantly reduce operating costs by the end of the fiscal year as a result of consolidating facilities and the higher level of efficiency of the Minnesota operations.

A restructuring charge of $13,785,000 was recorded during the first quarter of fiscal 2000 related to the restructuring of the Company’s manufacturing operations. The restructuring was primarily related to moving operations from the Company’s Agua Prieta, Mexico facility to its facility in Lamphun, Thailand. The majority of this charge included employee severance, asset impairment of property and equipment and facility abandonment costs.

OPERATING PROFIT (LOSS)
The consolidated operating loss of $(23,645,000) in the current quarter was up from the operating loss of $(1,364,000) for the prior year second quarter. Consolidated operating loss for the first six months was $(23,519,000) versus $(16,373,000) for the same period last year. The increase is primarily due to the restructuring charge recorded during the current year second quarter.

NET INCOME (LOSS)
Consolidated net loss for the fiscal 2001 second quarter was $(23,266,000) as compared to $(1,157,000) for the prior year. Basic and diluted net loss per share were ($1.55) as compared to ($0.08) for the prior year second quarter. Consolidated net loss for the first six months of fiscal 2001 was $(23,893,000) as compared to $(12,326,000) for the prior year. Basic and diluted net loss per share were ($1.60) as compared to ($0.83) for the same period last year.

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LIQUIDITY AND CAPITAL RESOURCES
Cash and short-term investments decreased to $1.3 million at March 31, 2001 from $1.7 million at September 30, 2000.

Accounts receivable at March 31, 2001 decreased by $6.1 million from September 30, 2000 due to a large customer temporarily reducing their payment cycle. Inventories at March 31, 2001 decreased by $3.4 million from September 30, 2000 due to the lower level of sales activity and the write off of inventory related to discontinued product lines resulting from the manufacturing restructuring.

Accounts payable at March 31, 2001 decreased by $7.8 million primarily due the reduced level of capital expenditures during the quarter and the lower level of purchasing required to support sales activity.

Working capital totaled $(9.0) million and $6.3 million at March 31, 2001 and September 30, 2000.

Since September 30, 2000, the Company has invested $7.3 million in capital expenditures primarily for FSA attachment equipment. Capital expenditures of approximately $5 million are expected during the remainder of fiscal 2001. These expenditures will increase the Company’s FSA production capacities and complete the move of the Chandler operation to Minnesota.

On April 23, 2001 the Company entered into a 1.2 billion Thailand baht credit facility agreement with Bank of Ayudhya Public Company Limited and The Industrial Finance Corporation of Thailand. The facility is comprised of a 590 million baht long term facility, a 530 million packing credit facility, a 70 million baht short term working capital facility and a 10 million baht overdraft facility. This facility will provide approximately $19 million of additional financing after reductions to the current U.S. based credit facility required by Wells Fargo and US Bank to secure their approval for the new Thailand based facility. The new Thailand based facility is secured by the receivables, inventory and assets held by the Company in Thailand. Management believes that the new Thailand credit facility, the existing US credit facility, cash and investments and cash generated from operations will provide an adequate source of funds to support projected working capital needs and capital expenditures in fiscal 2001. The Company is in compliance with the debt covenants of its U.S. credit facility as amended by the Third Amendment to Credit Agreement attached to this document as an exhibit.

FORWARD LOOKING STATEMENTS
Statements included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, elsewhere in the Company’s Form 10-Q and in future filings by the Company with the SEC, except for the historical information contained herein and therein, are “forward-looking statements”that involve risks and uncertainties. These risks and uncertainties include the timely availability and acceptance of new products including the FSA and semiconductor packaging substrates, the impact of competitive products and pricing, the development and implementation of a materials manufacturing process, the transfer of Chandler AZ operations to Minnesota, interruptions in the operations the Company’s single source suppliers, changes in manufacturing efficiencies and other risks detailed from time to time in the Company’s reports filed with the Securities and Exchange Commission. In addition, a significant portion of the Company’s revenue is generated from the disk drive, consumer electronics, network system and telecommunication industries and the global economic downturn has and a continued economic downturn will continue to have an adverse impact on the Company’s operations. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect subsequent events or circumstances or the occurrence of unanticipated events.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There were no material changes in the Company’s market risk during the three-month period ended March 31, 2001.

PART II – OTHER INFORMATION
Responses to Items 1 through 3 and 5 are omitted since these items are either inapplicable or the response thereto would be negative.

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ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

a) The Annual Meeting of the shareholders of Innovex, Inc. was held on January 17, 2001. There were 14,980,213 shares of common stock entitled to vote at the meeting and a total of 13,758,409 shares were represented at the meeting.

b) Seven directors were elected at the meeting to serve for one year or until their successors are elected and qualified. Shares were voted as follows:

	For	Withheld
Gerald M. Bestler	13,523,872	234,537
Frank L. Farrar	11,529,314	2,229,095
Thomas W. Haley	12,382,715	1,375,694
Elick Eugene Hawk	13,578,679	179,730
William P. Murnane	13,523,932	234,477
Michael C. Slagle	13,580,710	177,699
Bernt M. Tessem	13,578,692	179,717

c) Other matters voted on at the meeting: Proposal #2. A proposal was made to approve the selection of the Company’s independent public accountants for the current fiscal year. Shares were voted as follows:

For	Against	Abstain
13,642,120	26,848	89,441

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

a) Exhibits

10a Third Amendment to Credit Agreement.

10b Credit Facilities Agreement between Innovex (Thailand) Limited as the borrower and The Industrial Finance Corporation of Thailand and Bank of Ayudhya Public Company Limited as the creditors

b) Reports on Form 8-K

None.

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SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	INNOVEX, INC.
	Registrant
Date: May 14, 2001
	By \s\ William P. Murnane
	William P. Murnane
	President and Chief Executive Officer
	By \s\ Thomas Paulson
	Thomas Paulson
	Chief Financial Officer

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INDEX TO EXHIBITS

Exhibits		Page
10(a)	Third Amendment to Credit Agreement	13-18
10(b)	Credit Facilities Agreement between Innovex (Thailand) Limited as the
	Borrower and The Industrial Finance Corporation of Thailand and Bank of
	Ayudhya Public Company Limited as the Creditors	19-55

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EX-10

                                                                   EXHIBIT 10(a)


                       THIRD AMENDMENT TO CREDIT AGREEMENT

         This Amendment, dated as of March 30, 2001, 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 WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, formerly known as Norwest
Bank Minnesota, National Association, a national banking association, in its
separate capacity as administrative agent for itself and all other Banks (in
such capacity, the "Agent").

                                    Recitals

         A. The Borrower has requested that the Banks and the Agent, among other
things, amend certain financial covenants, exclude certain foreign Accounts and
Inventory from the Borrowing Base, waive certain covenant and payment defaults
and provide other accommodations.

         B. The Borrower, the Banks and the Agent have entered into a Credit
Agreement dated as of September 15, 1999, a First Amendment to Credit Agreement
dated as of June 29, 2000, and a Second Amendment to Credit Agreement dated as
of December 31, 2000 (as amended or restated from time to time, the "Credit
Agreement").

         C. The Borrower has represented to the Banks that it is securing
additional financing from foreign financial institutions. The Borrower has
further represented it intends to offer, as collateral for this financing, its
real and personal property assets located in the country of Thailand. Among
other things, this Amendment provides for a Revolving Facility with a Borrowing
Base which excludes foreign Accounts and Inventory.

         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. 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.

         2. Section 1.1 of the Credit Agreement is hereby amended by restating
the following definitions in the appropriate alphabetical location:

                  "Borrowing Base" means, at any time and subject to change from
         time to time in the Banks' reasonable discretion, the lesser of:

                  (a)      the Revolving Commitment Amount or


                                      -13-



                  (b)      the sum of:

                           (i)      80% OF ELIGIBLE ACCOUNTS, PLUS

                           (ii)     50% OF ELIGIBLE INVENTORY.

                  "Borrowing Base Certificate" means a certificate in the form
         attached hereto as Exhibit A.

                  "Eligible Accounts" means all unpaid Accounts of the Borrower,
         Innovex Precision Components, Inc., and Innovex Southwest, Inc., net of
         any credits, except the following shall not in any event be deemed
         Eligible Accounts:

                  (i) That portion of Accounts unpaid 90 days or more after the
         invoice date;

                  (ii) That portion of Accounts that is disputed or subject to a
         claim of offset or a contra account;

                  (iii) That portion of Accounts not yet earned by the final
         delivery of goods or rendition of services, as applicable, by the
         Borrower to the customer;

                  (iv) Accounts owed by any unit of government, whether foreign
         or domestic (provided, however, that there shall be included in
         Eligible Accounts that portion of Accounts owed by such units of
         government for which the Borrower has provided evidence satisfactory to
         the Banks that (A) the Banks have a first priority perfected security
         interest and (B) such Accounts may be enforced by the Banks directly
         against such unit of government under all applicable laws);

                  (v) Accounts owed by an account debtor located outside the
         United States which are not (A) backed by a bank letter of credit
         naming the Banks as beneficiary or assigned to the Banks, in the
         Agent's possession and acceptable to the Banks in all respects, in
         their sole discretion, (B) covered by a foreign receivables insurance
         policy acceptable to the Banks in their sole discretion;

                  (vi) Accounts owed by an account debtor that is insolvent, the
         subject of bankruptcy proceedings or has gone out of business;

                  (vii) Accounts owed by a shareholder, Subsidiary, Affiliate,
         officer or employee of the Borrower;

                  (viii) Accounts not subject to a duly perfected security
         interest in the Banks' favor or which are subject to any lien, security
         interest or claim in favor of any Person other than the Banks including
         without limitation any payment or performance bond;

                  (ix) That portion of Accounts that has been restructured,
         extended, amended or modified;

                  (x) That portion of Accounts that constitutes advertising,
         finance charges, service charges or sales or excise taxes;

                  (xi) That portion of Accounts owed by any one Account debtor
         that would cause the total of such Account debtor's Accounts to exceed
         25% of the total Accounts of the Borrower, Innovex Precision
         Components, Inc., and Innovex Southwest, Inc., excepting (A) Accounts
         owed by Seagate Technology, Inc. and its Subsidiaries and Affiliates
         which may constitute up to 75% of the total Accounts of the Borrower,
         Innovex Precision Components, Inc., and Innovex Southwest, Inc., and
         (B) Accounts owed by Little Fuse and its Subsidiaries and Affiliates
         which may constitute up to 30% of the total Accounts of the Borrower,
         Innovex Precision Components, Inc., and Innovex Southwest, Inc.;

                  (xii) Accounts owed by an account debtor, regardless of
         whether otherwise eligible, if 10% or more of the total amount due
         under Accounts from such debtor is ineligible under clauses (i), (ii)or
         (ix) above; and

                  (xiii) Accounts, or portions thereof, otherwise deemed
         ineligible by the Banks in their reasonable discretion.

                  "Eligible Inventory" means all Inventory of the Borrower,
         Innovex Precision Components, Inc., and Innovex Southwest, Inc., at the
         lower of cost or market value as determined in accordance with GAAP;
         provided, however, that the following shall not in any event be deemed
         Eligible Inventory:


                                      -14-



                  (i) Inventory that is: in-transit; located at any warehouse,
         job site or other premises not approved by the Banks in writing;
         located outside of the states, or localities, as applicable, in which
         the Banks have filed financing statements to perfect a first priority
         security interest in such Inventory; covered by any negotiable or
         non-negotiable warehouse receipt, bill of lading or other document of
         title; on consignment from any Person; on consignment to any Person or
         subject to any bailment unless such consignee or bailee has executed an
         agreement with the Banks;

                  (ii) Supplies, packaging, parts or sample Inventory;

                  (iii) Work-in-process Inventory;

                  (iv) Inventory that is damaged, obsolete, slow moving or not
         currently saleable in the normal course of the Borrower's operations;

                  (v) Inventory that the Borrower has returned, has attempted to
         return, is in the process of returning or intends to return to the
         vendor thereof;

                  (vi) Inventory that is perishable or live;

                  (vii) Inventory manufactured by the Borrower pursuant to a
         license unless the applicable licensor has agreed in writing to permit
         the Banks to exercise their rights and remedies against such Inventory;

                  (viii) Inventory classified as "deferred product variance";

                  (ix) Inventory that is subject to a security interest in favor
         of any Person other than the Banks; and

                  (x) Inventory otherwise deemed ineligible by the Banks in
         their reasonable discretion.

         "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 Notes is less than $17,500,000 and the Borrower is not in default under the
Credit Agreement, one and three-quarters percent (1.75%) for Floating Rate
Advances and three and one-half percent (3.50%) for Eurodollar Rate Advances,
and (b) after the aggregate principal amount outstanding under the Term Notes is
less than $17,500,000 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
three and one-quarter percent (3.25%) and for Eurodollar Rate Advances.

         "Revolving Commitment" means, with respect to each Bank, such Bank's
Percentage of the Revolving Commitment Amount, unless such amount is reduced
pursuant to Section 2.14(a) hereof, in which event it means the amount to which
said amount is reduced pursuant thereto, or as the context may require, the
obligation of such Bank to make Revolving Advances, as contemplated in Section
2.1.

         "Revolving Commitment Amount" shall mean Seven Million Five Hundred
Thousand Dollars ($7,500,000), 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).

         "Thai Guaranty" shall have the meaning set forth in Section 6.3(d) of
this Credit Agreement.

         "Third Amendment" means the Third Amendment to Credit Agreement, dated
as of March 30, 2001, by and among the Borrower, the Banks and the Agent.

         3. Article V of the Credit Agreement is hereby amended to add a new
Section 5.13 at the end thereof as follows:

                  "5.13 Mandatory Prepayment. The Borrower will, and will cause
         each of its Subsidiaries to, take all action necessary to apply any and
         all proceeds received from any sale or other disposition of the
         Borrower's assets located in Mexico towards the prepayment of the Term
         Notes in inverse order of their respective maturities. For purposes of
         this covenant, "proceeds" shall include all amounts received by the
         Borrower or its Subsidiaries upon the sale or other disposition of such
         assets, net of any costs incurred by the Borrower or its Subsidiaries
         in connection with such sale."


                                      -15-



         4. Section 6.1 of the Credit Agreement is hereby amended to add a new
subparagraph (i) at the end thereof as follows:

                  "(i) liens and security interests granted by Innovex
         (Thailand) Limited in favor of the Industrial Finance Corporation of
         Thailand and the Bank of Ayudhya Company Limited (together, the "Thai
         Lenders") pursuant to the Credit Facilities Agreement between Innovex
         (Thailand) Limited and the Thai Lenders dated as of April 23, 2001."

         5. Section 6.3 of the Credit Agreement is hereby amended to add a new
subparagraph (d) at the end thereof as follows:

                  "(d) a guaranty by the Borrower in favor of the Industrial
         Finance Corporation of Thailand and the Bank of Ayudhya Company Limited
         (together, the "Thai Lenders") of the obligations of Innovex (Thailand)
         Limited to the Thai Lenders in an amount not to exceed 1.2 Billion Baht
         under the Credit Facilities Agreement between Innovex (Thailand)
         Limited and the Thai Lenders dated on or about April 23, 2001 (the
         "Thai Guaranty")."

         6. Section 6.4 of the Credit Agreement is hereby amended to add a new
subparagraph (d) at the end thereof as follows:

                  "(d) equity investments in or loans or other extensions of
         credit to Innovex (Thailand) Limited in excess of the amount of such
         investments and extensions of credit outstanding and shown on the
         consolidated and consolidating balance sheet of the Borrower as of
         March 31, 2001."

         7. 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 March 31, 2001 are waived
by Banks. Such waivers are limited to the March 31, 2001 Covenant Computation
Date. In addition, the Banks waive the Borrower's failure to pay the regularly
scheduled principal payment of the Term Notes that was due April 1, 2001;
provided, however that such regularly scheduled principal payment shall be paid
in full not later than the earlier of May 1, 2001 or the date when Innovex
(Thailand) Limited shall have borrowed not less than 1.2 Billion Baht from The
Industrial Finance Corporation of Thailand, Bank of Ayudhya Public Company
Limited, and/or other Thai entities.

         8. Section 5.1(b) of the Credit Agreement is hereby amended in its
entirety to read as follows:

                  "(b) as soon as available and in any event within twenty (20)
         days after the end of each fiscal month of the Borrower, an
         unaudited/internal balance sheet and statement of income, cash flow and
         retained earnings of the Borrower and its Subsidiaries as at the end of
         and for such month and for the year-to-date period then ended, prepared
         on a consolidated and consolidating basis, in reasonable detail and the
         figures for the corresponding date and periods in the previous year,
         all prepared in accordance with GAAP hereof, subject to year-end audit
         adjustments; and accompanied by a certificate of the chief financial
         officer of the Borrower, substantially in the form of Exhibit B to the
         Third Amendment, stating (i) that such financial statements have been
         prepared in accordance with GAAP, subject to year-end audit
         adjustments, (ii) whether or not such officer has knowledge of the
         occurrence of any Default or Event of Default hereunder not theretofore
         reported and remedied and, if so, stating in reasonable detail the
         facts with respect thereto, and (iii) with respect to each such
         month-end which is also a Covenant Computation Date, all relevant facts
         in reasonable detail to evidence, and the computations as to whether or
         not the Borrower is in compliance with the requirements set forth in
         Sections 5.9, 5.10, 5.11, 5.12 and 6.12;".

         9. Article VI of the Credit Agreement is hereby amended by adding the
following new Section 6.14 immediately following Section 6.13:


                                      -16-



                  "Section 6.14. Prohibition on Certain Payments under the Thai
         Guaranty. The Borrower shall not make any payment pursuant to the Thai
         Guaranty if such payment could reasonably be expected to create a
         default under this Credit Agreement, including, without limitation, a
         default under the financial covenants contained in Article V. The
         Borrower shall provide the Agent with ten (10) days prior written
         notice of any payment it proposes to make under the Thai Guaranty."

         10. This Amendment, including without limitation the covenant and
payment waivers contained 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 May 1, 2001:

                  (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) An opinion of counsel to the Borrower and the Guarantors
         in form and content acceptable to the Agent;

                  (d) Payment of all legal fees incurred by the Agent through
         the date of this Amendment;

                  (e) An Escrow Agreement in form and substance satisfactory to
         the Banks among the Borrower, the Banks, Innovex (Thailand) Limited,
         The Industrial Finance Corporation of Thailand, Bank of Ayudhya Public
         Company Limited, and Citibank, N.A., Bangkok Branch, as Escrow Agent,
         duly executed by each of the parties thereto, pursuant to which
         Citibank, N.A., Bangkok Branch will hold certificates evidencing the
         capital stock of Innovex (Thailand) Limited.

                  (f) A Prioritization Agreement in form and substance
         satisfactory to the Banks among the Borrower, the Banks, The Industrial
         Finance Corporation of Thailand, and the Bank of Ayudhya Public Company
         Limited, duly executed by each of the parties thereto, whereby the
         parties agree as to the priority of certain payments.

                  (g) Payment of the Revolving Notes in an amount not less than
         $5,700,000 and payment of the Term Notes in an amount not less than
         $1,562,500.

         11. 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.

         12. 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.

         13. 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 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


                                      -17-



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.

         14. 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.

         15. 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.

         16. 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.

                  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
                               Its


                                   WELLSFARGO BANK MINNESOTA, NATIONAL
                                        ASSOCIATION, formerly known as Norwest
                                        Bank Minnesota, National Association, as
                                        Bank and as Agent
                               By
                               Its

                                   U.S. BANK NATIONAL ASSOCIATION, as Bank
                               By
                               Its


                                      -18-

EX-10

                                                                   Exhibit 10(b)


                           CREDIT FACILITIES AGREEMENT

                                     BETWEEN


                           INNOVEX (THAILAND) LIMITED
                                 as the Borrower


                     BANK OF AYUDHYA PUBLIC COMPANY LIMITED
                              as the Facility Agent




                 THE INDUSTRIAL FINANCE CORPORATION OF THAILAND
                              as the Security Agent



                                       AND



                 THE INDUSTRIAL FINANCE CORPORATION OF THAILAND
                                       and
                     BANK OF AYUDHYA PUBLIC COMPANY LIMITED
                                as the Creditors


                  Siam Premier International Law Office Limited
                      24th - 26th Floor, Thai Wah Tower II
                          21/147-150 South Sathorn Road
                                  Bangkok 10120
                               Tel: (662) 679-1333
                               Fax: (662) 679-1314


                                      -19-



                                TABLE OF CONTENTS


                                                                            Page
                                                                            ----

1.     Definition and Interpretation..........................................21
2.     The Facilities.........................................................27
3.     Conditions Precedent...................................................28
4.     Utilization of Facility................................................29
5.     Fees and Interest......................................................32
6.     Repayment and Prepayment...............................................33
7.     Payment................................................................35
8.     The Facility Agent, the Security Agent and the Creditors...............35
9.     Change in Circumstances................................................38
10.    Representations and Warranties.........................................40
11.    Affirmative Covenants and Negative Covenants...........................41
12.    Event of Default.......................................................47
13.    Security...............................................................49
14.    Distribution of Security...............................................50
15.    Indemnity..............................................................52
16.    Expenses...............................................................52
17.    Notices................................................................52
18.    Assignment.............................................................54
19.    Void Provision not Affecting Valid Provision...........................54
20.    Amendment or Waiver....................................................54
21.    Set-Off................................................................54
22.    Governing Laws.........................................................55
23.    No Waiver..............................................................55
24.    Effective Date of this Agreement.......................................55

Attachment 1             Details of the Facilities and the Creditors
Attachment 2             Drawdown Notice
Attachment 3             Receipt (for Long Term Facility)
Attachment 3.1  Receipt (for Packing Credit Facility)
Attachment 3.2  Receipt (for Short Term Working Capital Facility)
Attachment 4             Notice of Commitment Percentage
Attachment 5             General Conditions Precedent
Attachment 6             Repayment Schedule
Attachment 7             Details of Land and Building
Attachment 8             Guarantee Agreement
Attachment 9             Equipment Pledge Agreement
Attachment 10            Escrow Agreement
Attachment 11            Prioritization Agreement


                                      -20-



                           CREDIT FACILITIES AGREEMENT

            This Agreement is made to be effective from 23 April 2001

                                     BETWEEN

     INNOVEX (THAILAND) LIMITED (Registration No. Bor Aor Chor. Lor Por 253)
 with its head office located at No. 79 Moo 4 Export Industrial Zone 2, Northern
   Industrial Estate, Baan Klang Sub-district, Muang Lampoon District, Lampoon
              Province (hereinafter referred to as the "Borrower")

BANK OF AYUDHYA PUBLIC COMPANY LIMITED ("Bank of Ayudhya") as the Facility Agent
       (hereinafter referred to in this Agreement as the "Facility Agent")

  THE INDUSTRIAL FINANCE CORPORATION OF THAILAND ("IFCT") as the Security Agent
               (hereinafter referred to as the "Security Agent").

                                       AND

    THE INDUSTRIAL FINANCE CORPORATION OF THAILAND and BANK OF AYUDHYA PUBLIC
  COMPANY LIMITED as the Creditors (hereinafter referred to collectively as the
                  "Creditors" and individually as "Creditor").

WHEREAS

(A)      The Borrower intends to obtain the Facilities from the Creditors for
         the business of manufacturing Flexible Interconnect Assembles and/or
         any products of the Borrower; and

(B)      The Creditors are desirous of providing the Facilities to the Borrower
         in accordance with the details and conditions of this Agreement.

The Borrower, the Facility Agent, the Security Agent and the Creditors have
already studied this Agreement to understand the contents hereof and have
obtained the necessary consultation and instruction from their counsels and are
of the opinion that the contents of this Agreement are correct in accordance
with their intention and have agreed to enter into this Agreement in accordance
with the following details.

1.       DEFINITION AND INTERPRETATION

1.1      Unless the context required otherwise, all the words and terms provided
         in this Agreement have the following meanings:


         "AUTHORIZED DIRECTOR" means one or more directors who are authorized to
         sign and affix the company seal to bind the limited company in
         accordance with their authorization registered with the registrar of
         the partnerships and corporations, Lampoon Province;

         "CREDITORS" means all the financial institutions specified in
         Attachment 1 and the "CREDITOR" means each financial institution
         specified in Attachment 1;

         "LONG TERM CREDITORS" and "LONG TERM CREDITOR" mean the Long Term
         Creditors and each Long Term Creditor (as the case may be) under this
         Agreement;


                                      -21-



         "PACKING CREDIT CREDITORS" and "PACKING CREDIT CREDITOR" mean the
         Packing Credit Creditors and each Packing Credit Creditor (as the case
         may be) under this Agreement;

         "WORKING CAPITAL CREDITORS" and "WORKING CAPITAL CREDITOR" mean IFCT as
         the Short Term Working Capital Creditor and Bank of Ayudhya as the
         Overdraft Creditor (as the case may be) under this Agreement;

         "PLEDGEES" means IFCT and Bank of Ayudhya;

         "DRAWDOWN" and "DRAWDOWN" mean an act of borrowing and other
         utilization of Facility under this Agreement;

         "REPAYMENT SCHEDULE" means the repayment schedule for Long Term
         Facility under the condition specified in Clause 6.1.1 and Attachment
         6;

         "EQUIPMENT" means all the equipment and appliances installed or will be
         installed, imported or purchased locally or used in the Project at
         present and in the future from the Effective Date of this Agreement
         until 31 December 2002 including Registrable Equipment in accordance
         with the details specified in Attachment 9 and any amendment thereof;

         "REGISTRABLE EQUIPMENT" means all the equipment located in the Project
         which is capable of registration under the Machinery Registration Acts
         B.E. 2514 (including any amendment thereof);

         "PROJECT" means the project for the manufacturing of Flexible
         Interconnect Assembles and/or any products of the Borrower;

         "NOTICE OF DRAWDOWN" means the notice of drawdown in the form specified
         in Attachment 2;

         "LOAN" means the aggregate principal amount that the Long Term
         Creditors, Packing Credit Creditors and/or Working Capital Creditors
         allow the Borrower to drawdown under this Agreement and for the time
         being of outstanding under this Agreement;

         "BAHT CURRENCY" or "BAHT" means the lawful currency of Thailand;

         "FINANCIAL STATEMENTS" means balance sheet, income statement, cashflow
         statement of the Borrower or the Guarantor (as the case may be)
         together with the notes attached thereto including the statements
         specifying the sources and uses of funds;

         "INTEREST PERIOD" means the interest period as specified in Clause
         5.1.2, Clause 5.2, Clause 5.3, Clause 9.3.2, Clause 9.3.5 and Clause
         12.3.2;

         "UTILIZED AMOUNT" means the principal that any Creditor allow the
         Borrower to drawdown or that any Creditor is deemed to allow the
         Borrower to drawdown on each Utilization Date;

         "AUTHORIZED OFFICER" means any or more persons authorized by the
         Authorized Director of a company to act and sign to bind the company;

         "EQUITY" means the equity of the Borrower which includes paid-up share
         capital, share premiums, reserves, retained earnings and also includes
         the subordinated loans provided by any of Innovex Group Companies to
         the Borrower in compliance with the form and substance acceptable to
         the Creditors;

         "LAND AND BUILDING" means the land and building which are the location
         of the Project in accordance with the details specified in Attachment
         7;


                                      -22-



         "INNOVEX GROUP COMPANIES" means any company registered in any
         jurisdiction which holds shares or have controlling power or being
         controlled by or under common control with other companies, whether
         directly or indirectly, in the Borrower; for the benefit of the
         foregoing, the power to control, being controlled or under common
         control mean having the power, whether directly or indirectly, to order
         or have the power to designate the management or policies of such
         company whether by being the holder of voting shares, by contract or
         otherwise;

         "RECEIPT" means the receipt issued by the Borrower to each Creditor as
         evidence of the drawdown from (a) the Long Term Facility in accordance
         with the form specified in Attachment 3 (b) the Packing Credit Facility
         in accordance with the form specified in Attachment 3.1, and (c) the
         Short Term Working Capital Facility in accordance with the form
         specified in Attachment 3.2;

         "SECURITY KEEPER" means each of (a) Mr. Brian Dahmes and/or (b) Mr.
         Robert Beaton who is a director of the Borrower and has the power to
         control the Equipment for and on behalf of the Creditors in accordance
         with the conditions set forth in Attachment 9;

         "GUARANTOR" means Innovex Inc which is an ultimate parent company of
         the Borrower and/or the Innovex Group Companies;

         "AUDITOR" means any authorized auditor of Grant Thornton or other
         independent audit firm appointed by the Borrower with the consent of
         the Creditors;

         "AVAILABILITY PERIOD FOR LONG TERM FACILITY" means the period
         commencing from the Effective Date of this Agreement and expiry on the
         earlier of (a) 30 June 2001 or (b) the Long Term Creditors have no
         obligation to provide Long Term Facility to the Borrower or (c) the
         Long Term Creditors agree with the Borrower;

         "AVAILABILITY PERIOD FOR PACKING CREDIT FACILITY" means the period
         commencing from the Effective Date of this Agreement and expiring on
         the earlier of (a) the Packing Credit Creditors have no obligation to
         provide Packing Credit Facility to the Borrower under this Agreement
         and/or the Documents for the Utilization of Packing Credit Facility or
         (b) the Packing Credit Creditors agree with the Borrower;

         "AVAILABILITY PERIOD FOR WORKING CAPITAL FACILITY" means the period
         commencing from the Effective Date of this Agreement and expiring on
         the earlier of (a) the Working Capital Creditors have no obligation to
         provide Working Capital Facility to the Borrower under this Agreement
         and/or the Documents for the Utilization of Overdraft Facility or
         Documents for the Utilization of Short Term Working Capital Facility
         (as the case may be) or (b) the Working Capital Creditors agree with
         the Borrower;

         "PROMISSORY NOTE" means any promissory note issued by the Borrower to
         the Packing Credit Creditor and/or Working Capital Creditor as an
         evidence for the granting and/or drawing of that type of FACILITY to
         the Borrower and shall be in accordance with the form specified by each
         such Creditor;

         "FACILITY LIMIT OF EACH CREDITOR" means the facility limit for Long
         Term Facility, Packing Credit Facility and Working Capital Facility
         provided by each Creditor to the Borrower under Attachment 1 under the
         name of each such Creditor, this facility limit may be reduced or
         cancelled under the term of this Agreement;

         "BANKING DAY" means the day the Creditors open for business in Bangkok
         (except Saturdays, Sundays and other holidays of the financial
         institutions announced by the Bank of Thailand);


                                    -23-



         "UTILIZATION DATE" means the date the Borrower utilizes any type of
         Facility under this Agreement;

         "EFFECTIVE DATE OF THIS AGREEMENT" means 23 April 2001;

         "REPAYMENT DATE" means the day on which the loan shall be repaid as
         specified in Clause 6 of this Agreement and under Attachment 6 (as the
         case may be);

         "INTEREST PAYMENT DATE" means the day on which the interest shall be
         due and payable under this Agreement;

         "COMMITMENT PERCENTAGE" means the commitment percentage for the
         Facility of each Creditor specified under the name of such Creditor in
         Attachment 1;

         "GUARANTEE AGREEMENT" means the Guarantee Agreement issued by the
         Guarantor to the Creditors in accordance with the form of Attachment 8
         as a security of the Debt of the Borrower under this Agreement;

         "LAND AND BUILDING MORTGAGE" means the agreement to mortgage the Land
         and Building including the agreement attached to the Land and Building
         Mortgage in accordance with the form and substance specified by the
         Security Agent;

         "EQUIPMENT MORTGAGE AGREEMENT" means the agreement to mortgage the
         Registrable Equipment including the agreement attached to the Equipment
         Mortgage Agreement in accordance with the form and substance specified
         by the Security Agent;

         "EQUIPMENT PLEDGE AGREEMENT" means the pledge agreement for Equipment
         made between the Borrower, Security Keeper, Security Agent and the
         Creditors for the benefit of the Creditor in accordance with the form
         specified in Attachment 9 of this Agreement;

         "POOL ASSETS" means all assets of the Borrower including trade debtor,
         note receivable, security, income from the Insurance, money paid by
         other person to the Borrower, and other revenues received by the
         Borrower under the conditions of this Agreement or other type of the
         Agreement;

         "FACILITY" means the credit Facility provided by the Creditors to the
         Borrower under this Agreement including Long Term Facility, Packing
         Credit Facility and Working Capital Facility;

         "LONG TERM FACILITY" means the facility in Baht as specified in Clause
         2.1.1;

         "PACKING CREDIT FACILITY" means the facility in Baht or foreign
         currency equivalent to Baht as specified in Clause 2.1.2;

         "WORKING CAPITAL FACILITY" means the Short Term Working Capital
         Facility and Overdraft Facility in Baht as specified in Clause 2.1.3;

         "SHORT TERM WORKING CAPITAL FACILITY" means the short term working
         capital facility that IFCT allows the Borrower to drawdown under this
         Agreement;

         "OVERDRAFT FACILITY" means the overdraft facility that Bank of Ayudhya
         allows the Borrower to drawdown under this Agreement;

         "NOTICE OF COMMITMENT PERCENTAGE" means the notice informing the
         Commitment Percentage for each Facility arranged by the Facility Agent
         in accordance with the form specified in Attachment 4;


                                      -24-



         "DEBT" and "INDEBTEDNESS" means all debts and obligations of the
         Borrower under this Agreement and the Transaction Documents whether
         existing debt, future debt or conditional debt including the obligation
         of the Borrower to repay the money to the Creditors under the
         Transaction Documents;

         "EXISTING DEBT" means the Debt which is already in existence at any
         time;

         "AGGREGATE DEBT" means all debts and obligations of the Borrower at any
         time;

         "LONG TERM DEBT" means all the debts which has the repayment maturity
         of not less than one year from the date of incurrence of such debts;

         "SECURITY" means the security specified in Clause 3.1, Clause 13 and
         Attachment 5 including the additional security to be provided in
         addition to or as a substitution in the form and value acceptable to
         the Creditors;

         "EVENT OF DEFAULT" means any event as specified in Clause 12.1 as an
         event of default;

         "PROPORTION OF DEBT" means the proportion of the Existing Debt of the
         Borrower for each Creditor and all the Existing Debts of the Borrower
         under the Long Term Facility, Packing Credit Facility or Working
         Capital Facility (as the case may be) at any time under this Agreement;

         "TRANSACTION DOCUMENTS" means this Agreement, and agreements, documents
         and other agreements relating to the utilization of the Facility under
         this Agreement including all the documents relating to Security,
         Guarantee Agreement, Land and Building Mortgage Agreement, Equipment
         Pledge Agreement, Equipment Mortgage Agreement, Escrow Agreement,
         Prioritization Agreement, Documents for the Utilization of Overdraft
         Facility, Documents for the Utilization of Packing Credit Facility,
         Documents for the Utilization of Short Term Working Capital Facility,
         Receipt and Promissory Notes;

         "DOCUMENTS FOR THE UTILIZATION OF OVERDRAFT FACILITY" means application
         for the utilization of overdraft and/or documents or agreements which
         are used for the utilization of overdraft Facility (including overdraft
         agreement) in the form and substance specified by Bank of Ayudhya;

         "DOCUMENTS FOR THE UTILIZATION OF SHORT TERM WORKING CAPITAL FACILITY"
         means application for the utilization of Short Term Working Capital
         Facility and/or any documents, instruments, Promissory Notes or other
         agreements which are used for the utilization of the Short Term Working
         Capital Facility in the form and substance specified by IFCT;

         "DOCUMENTS FOR THE UTILIZATION OF PACKING CREDIT FACILITY" means
         application for the utilization of Packing Credit and/or any documents,
         instruments, Promissory Notes or other agreements which are used for
         the utilization of Packing Credit Facility in the form and substance
         acceptable to Packing Credit Creditors;

         "DEFAULT INTEREST RATE" means

         (a)      In the case of IFCT, the maximum interest rate IFCT is legally
                  allowed at that particular time to use in compliance with the
                  laws regarding interest for loans of financial institutions
                  which, on the Effective Date of this Agreement, is at the rate
                  of seventeen (17) percent per annum but can be changed as
                  announced, from time to time, by IFCT; and/or

         (b)      In the case of Bank of Ayudhya, the maximum interest rate
                  applicable to the general customers who breach any condition
                  specified by Bank of Ayudhya under the notification of the
                  Bank of Thailand relating to the specification for commercial
                  banks to perform in relation to interest and discount which,
                  on the Effective Date of this Agreement, is at the rate


                                     -25-



                  of fourteen point five (14.5) percent per annum but can be
                  changed as announced, from time to time, by Bank of Ayudhya;

         "MARKET RATE" means an annual interest rate to be used with Packing
         Credit Facility which is MOR or any rate used by each Packing Credit
         Creditor to calculate the interest on that particular date from its
         prime customers;

         "AVERAGE MLR" means an annual interest rate specified by the Facility
         Agent by using the annual interest rate that each Creditor used to
         calculate the interest for the long term debt in Baht from the prime
         customers of each Creditor;

         "MOR" means

         (a)      In the case of Bank of Ayudhya, an annual interest rate
                  specified by Bank of Ayudhya using the annual interest rate
                  that Bank of Ayudhya used to calculate the interest for the
                  overdraft facility in Baht from its prime customers which, on
                  the Effective Date of this Agreement, is at the rate of eight
                  point two five (8.25) percent per annum but can be changed as
                  announced from time to time by Bank of Ayudhya; and

         (b)      In the case of IFCT, a minimum annual interest rate for the
                  purchase of bills from the prime customers as announced by
                  IFCT which, on the Effective Date of this Agreement, is at the
                  rate of eight point two five (8.25) percent per annum but can
                  be changed as announced from time to time, by IFCT;

         "ESCROW AGENT" means Citibank, N.A., Bangkok Branch;

         "ESCROW AGREEMENT" means the escrow agreement dated 23 April 2001
         executed by the Borrower, Creditors, U.S. Bank and Wells Fargo Bank in
         accordance with the form specified in Attachment 10;

         "PRIORITIZATION AGREEMENT" means the prioritization agreement dated 23
         April 2001 executed by the Guarantor, Creditors, U.S. Bank and Wells
         Fargo Bank in accordance with the form specified in Attachment 11;

         "U.S. BANK" means U.S. Bank National Association, which is one of the
         banks which currently provides credit facilities to the Guarantor or
         any Innovex Group Company other than the Borrower; and

         "WELLS FARGO BANK" means Wells Fargo Bank Minnesota National
         Association, which is one of the banks which currently provides credit
         facilities to the Guarantor or any Innovex Group Company other than the
         Borrower.

1.2      Under this Agreement unless the context required otherwise

         (a)      References to this Agreement or Transaction Documents shall
                  include annexes and attachments of this Agreement or
                  Transaction Documents and also includes this Agreement or the
                  Transaction Documents as amended and supplemented from time to
                  time;

         (b)      The term "Facility Agent", "Security Agent" and "Creditor" are
                  references to the assignee or transferee of such person;

         (c)      The term "Law" includes the codes, emergency decrees,
                  constitution, statutes, acts, decrees, emergency decrees,
                  treaties, conventions, guidelines and judgments (whether or
                  not having the force of laws) and also includes the laws of
                  the countries other than Thailand.


                                      -26-



         1.3 Contents, headings or names of this Agreement and the Transaction
         Documents are for the purpose of references only and will not be used
         for the interpretation of any terms of this Agreement or the
         Transaction Documents.

2.       THE FACILITIES

2.1      Subject to the terms and conditions of this Agreement, the Facilities
         to be made available to the Borrower under this Agreement shall consist
         of:

         2.1.1    LONG TERM FACILITY the Baht loan facility provided by the Long
                  Term Creditors to the Borrower under the terms and conditions
                  of this Agreement for the aggregate amount of not exceeding
                  Baht 590,000,000 (Five Hundred Ninety Million Baht)

         2.1.2    PACKING CREDIT FACILITY the Baht or foreign currency
                  equivalent to Baht facility as Packing Credit Creditors agree
                  but not exceeding the Packing Credit Facility Limit provided
                  by Packing Credit Creditors to the Borrower under the terms
                  and conditions of this Agreement for the aggregate amount of
                  not exceeding Baht 530,000,000 (Five Hundred Thirty Million
                  Baht)

         2.1.3    WORKING CAPITAL FACILITY Baht loan or overdraft provided by
                  Working Capital Creditors to the Borrower under the terms and
                  conditions of this Agreement for the aggregate amount of not
                  exceeding Baht 80,000,000 (Eighty Million Baht) divided in to
                  the following type of the Facility:

                  (1)      SHORT TERM WORKING CAPITAL FACILITY to be provided by
                           IFCT to the Borrower for the amount not exceeding
                           Baht 70,000,000 (Seventy Million Baht); and

                  (2)      OVERDRAFT FACILITY to be provided by Bank of Ayudhya
                           to the Borrower for the amount not exceeding Baht
                           10,000,000 (Ten Million Baht).

2.2      The Borrower shall use the Facilities exclusively for the following
         purposes:

         2.2.1    LONG TERM FACILITY The Borrower shall use the Long Term
                  Facility for the payment of expenses related to the Project.

         2.2.2    PACKING CREDIT FACILITY The Borrower shall use the Packing
                  Credit Facility for the payment of expenses related to the
                  Project and as working capital for the Project.

         2.2.2    WORKING CAPITAL FACILITY The Borrower shall use the Working
                  Capital Facility as working capital for the Project.

2.3      The fact that, for whatsoever reason, the Facility or any part thereof
         is not fully utilized by the Borrower or is unavailable to the Borrower
         shall neither affect nor impair the liabilities of the Borrower to
         perform any and all of its obligations under this Agreement in full nor
         impose any obligation on any Creditor to provide the Borrower any
         Facility other than the Commitment Percentage of the Facility of each
         Credit as specified in this Agreement.

2.4      Failure by a Creditor to perform its obligation under this Agreement
         shall not release other Creditor, Facility Agent, Security Agent or the
         Borrower from their respective obligations under this Agreement nor
         shall any Creditor, Security Agent or Facility Agent be liable in any
         respect for the failure of such Creditor to perform its obligation
         under this Agreement. In the event of any circumstance as specified
         above has happened, other Creditor will arrange the consultation with
         the Borrower immediately to find a possible remedy for such
         circumstance.


                                      -27-



3.       CONDITIONS PRECEDENT

3.1      GENERAL CONDITIONS PRECEDENT
         In addition to other conditions specified in this Agreement, the
         Creditors are bound to provide the Facility to the Borrower under this
         Agreement when the Facility Agent is of the opinion that the Borrower
         and the Guarantor have fulfilled the conditions precedent as specified
         in Attachment 5 completely no later than seven (7) Banking Days before
         the first Utilization Date or if the Facility Agent has waived any
         condition precedent in writing before or on the first Utilization Date.

3.2      Conditions Precedent for the utilization of Long Term Facility, Packing
         Credit Facility and Working Capital Facility

         In addition to other conditions specified in this Agreement, the Long
         Term Creditors, Packing Credit Creditors and Working Capital Creditors
         are bound to provide the Long Term Facility, Packing Credit Facility
         and Working Capital Facility to the Borrower under this Agreement when
         the Facility Agent is of the opinion that the Borrower has fulfilled
         the conditions precedent as specified under this clause in full no
         later than three (3) Banking Days before the Utilization Date for the
         Long Term Facility, Utilization Date for Packing Credit Facility or
         Utilization Date for Working Capital Facility (as the case may be) or
         when the Facility Agent has waived any condition precedent to the
         Borrower in writing before or on the Utilization Date for Long Term
         Facility, Utilization Date for Packing Credit Facility or Utilization
         Date for Working Capital Facility (as the case may be). The conditions
         precedent for Long Term Facility, Packing Credit Facility and Working
         Capital Facility are as follows:

         3.2.1    Events which are conditions precedent for Long Term Facility,
                  Packing Credit Facility and Working Capital Facility

                  (a)      all representations and warranties made by the
                           Borrower and the Guarantor (as the case may be) under
                           Clause 10 and under other Transaction Documents are
                           true and correct as if made or provided on that
                           proposed Utilization Date;

                  (b)      The Borrower and the Guarantor (as the case may be)
                           are in compliance with the conditions precedent as
                           specified in Clause 3.1 completely and/or being
                           waived in writing by the Facility Agent;

                  (c)      The Borrower and the Guarantor (as the case may be)
                           have fulfilled the affirmative covenants and negative
                           covenants provided under Clause 11 of this Agreement
                           and/or provided pursuant to other Transaction
                           Documents and there is no Event of Default which has
                           happened or may happen as a result of the utilization
                           of Long Term Facility, Packing Credit Facility and
                           Working Capital Facility (as the case may be);

                  (d)      The Transaction Documents, authorization, permit or
                           other documents of the same kind as specified in
                           Attachment 5 are in full force and effect and has not
                           been cancelled or amended in the way which is not
                           acceptable to the Long Term Creditors, Packing Credit
                           Creditors or Working Capital Creditors (as the case
                           may be).

         3.2.2    Documents which are conditions precedent for each utilization
                  of Long Term Facility

                  The Facility Agent has received the following documents within
                  the time specified above.

                  (a)      a Notice of Drawdown for that drawdown; and


                                      -28-



                  (b)      the Transaction Documents, other documents relating
                           to this Agreement or related to the Borrower or other
                           parties as requested by Long Term Creditors.

                  The Borrower shall deliver the documents specified in Clause
                  3.2.2 to the Facility Agent with sufficient copy for the
                  Creditors (one copy for each Long Term Creditor of which the
                  Facility Agent will keep the original of all the documents).
                  For the copy of all documents, the Borrower will arrange for
                  its Authorized Director or Authorized Officer to certify each
                  document as true and correct copy and in full force on the
                  date of the certification of such documents.

         3.2.3    Documents which are conditions precedent for each utilization
                  of the Packing Credit Facility

                  Before the utilization of each Packing Credit Facility, each
                  Packing Credit Creditor will receive the Documents for the
                  Uitilization of Packing Credit Facility and Promissory Note
                  which is duly signed by the Authorized Director of the
                  Borrower and proper stamp duties have already been affixed.

         3.2.4    Documents which are conditions precedent for each utilization
                  of the Short Term Working Capital Facility.

                  Before the utilization of each Short Term Working Capital
                  Facility, IFCT will receive the Documents for the Utilization
                  of Short Term Working Capital Facility (in Baht) and the
                  Promissory Note which is duly signed by the Borrower and
                  proper stamp duties have already been affixed.

         3.2.5    Documents which are conditions precedent for each utilization
                  of the Overdraft Facility.

                  Before the first utilization of Overdraft Facility, Bank of
                  Ayudhya will receive the Documents for the Utilization of the
                  Overdraft Facility (which includes overdraft agreement) duly
                  signed by the Authorized Director of the Borrower and proper
                  stamp duties are affixed and in case for the extension of each
                  additional Overdraft Facility, the Borrower will affix proper
                  stamp duties as specified by Bank of Ayudhya.

4.       UTILIZATION OF FACILITY

4.1      UTILIZATION OF LONG TERM FACILITY

         4.1.1    Subject to the terms of Clause 3.1 and Clause 3.2 and other
                  terms and conditions specified in this Agreement or the
                  Transaction Documents, the Borrower may utilize the Long Term
                  Facility on any Banking Days during the Availability Period
                  for Long Term Facility.

         4.1.2    Each drawdown of the Long Term Facility will be in compliance
                  with the following conditions:

                  (a)      The Facility Agent has received a Notice of Drawdown
                           from the Borrower no later than three (3) Banking
                           Days prior to the date of such drawdown;

                  (b)      The Borrower shall deliver Receipt to the Facility
                           Agent on each Utilization Date by delivering

                           (1)      Receipt specifying the total amount for such
                                    drawdown;


                                      -29-



                           (2)      Receipt specifying the amount that each Long
                                    Term Creditor provided to the Borrower under
                                    the Commitment Percentage for each Long Term
                                    Creditor for all the Long Term Creditors.

                  (c)      Subject to the conditions of Clause 2.1.1, the
                           Borrower is entitled to drawdown Long Term Facility
                           for the aggregate amount of Baht 590,000,000 (Five
                           Hundred Ninety Million Baht).

                  (d)      In case the Borrower has drawndown Long Term Facility
                           in full during the Availability Period for Long Term
                           Facility, the Borrower is not entitled to drawdown
                           such amount again.

         4.1.3    A Notice of Drawdown issued by the Borrower shall be
                  irrevocably binding on the Borrower to act in compliance with
                  such notice.

                  In case the Borrower issues a Notice of Drawdown to the
                  Facility Agent and there is no drawdown on the date specified
                  as Utilization Date due to the reason that the Borrower fails
                  to drawdown or the reason that the Borrower fails to comply
                  with any conditions specified in Clause 3 in full, the
                  Borrower will pay the money to the Long Term Creditor upon
                  request to remedy the damage, loss and expenses as a result of
                  the failure to drawdown on such date including the loss,
                  interest margin, costs and expenses incurred from the
                  reallocation of the amount prepared for the providing of such
                  Long Term Facility to the Borrower.

         4.1.4    Payment of Loan by the Long Term Creditors

                  Subject to the terms and conditions of this Agreement, for
                  each drawdown of Long Term Facility, the Facility Agent will
                  issue the Notice of Commitment Percentage to inform each Long
                  Term Creditor of the amount of money that such Long Term
                  Creditor has to provide to the Borrower in compliance with the
                  Commitment Percentage of the Facility of such Long Term
                  Creditor for the Long Term Facility no later than two (2)
                  Banking Days prior to the Utilization Date and within 10.00
                  a.m of the Utilization Date that the Borrower is allowed to
                  drawdown the Long Term Facility, each Long Term Creditor will
                  deliver the amount specified by the Facility Agent by
                  transferring the money to the Borrower's account (in which
                  case the Long Term Creditor will deliver copy of the transfer
                  slip to the Facility Agent within the Utilization Date) or
                  deliver cashier's cheque under the name of the Borrower dated
                  the Utilization Date to the Facility Agent for deposit in the
                  Borrower's account.

                  The parties clearly agree that the Borrower will be deemed to
                  receive the Loan when each Long Term Creditor has delivered
                  the amount of money in accordance with the Commitment
                  Percentage to the account of the Borrower or delivered the
                  cashier's cheque in the name of the Borrower dated the
                  Utilization Date to the Facility Agent which has deposited
                  such funds in the Borrower's account in compliance with the
                  condition of this Clause.

4.2      UTILIZATION OF PACKING CREDIT FACILITY

         4.2.1    Subject to Clauses 3.1 and 3.2 and other conditions specified
                  in this Agreement or the Transaction Documents, on any Banking
                  Days during the Availability Period for Packing Credit
                  Facility, the Borrower is entitled to utilize the Packing
                  Credit Facility in Baht or in other foreign currency which is
                  equivalent to Baht acceptable by each of the Packing Credit
                  Creditor but not exceeding the Facility Limit of Each Creditor
                  of such Packing Credit Creditor.

         4.2.2    For the utilization of the Packing Credit Facility from each
                  Packing Credit Creditor, the Borrower shall execute the
                  Documents for the Utilization of Packing Credit Facility for
                  such


                                      -30-



                  Packing Credit Creditor no later than two (2) Banking Days
                  before the Utilization Date for Packing Credit Facility and
                  shall deliver a Receipt to each Packing Credit Creditor on
                  each Utilization Date for Packing Credit Facility obtained
                  from such Packing Credit Creditor.

         4.2.3    The maximum amount for the Packing Credit Facility the
                  Borrower is entitled to utilize from the Packing Credit
                  Creditors under this Agreement is Baht 530,000,000 (Five
                  Hundred Thirty Million Baht).

         4.2.4    The maturity of each Packing Credit Facility of the Borrower
                  will not exceed one hundred and eighty (180) days.

         4.2.5    Subject to the conditions of Clause 4.2.3 for any amount
                  drawndown by the Borrower under the Packing Credit Facility
                  and has been prepaid or repaid by the Borrower, the Borrower
                  is entitled to drawdown such amount again under the terms and
                  conditions set forth by each Packing Credit Creditor under its
                  Documents for the Utilization of Packing Credit Facility.

         4.2.6    The utilization of Packing Credit Facility must be renewed on
                  a yearly basis in accordance with the conditions specified by
                  each Packing Credit Creditor in the Documents for the
                  Utilization of Packing Credit Facility.

         4.2.7    The Borrower agrees that the Borrower shall use its best
                  efforts to utilize Packing Credit Facility from each Packing
                  Credit Creditor at the proportionate ratio of 8 (IFCT) to 5
                  (Bank of Ayudhya) or the ratio specified by the Packing Credit
                  Creditors and shall prepare the reports for the drawdown of
                  Packing Credit Facility and other Facilities to the Facility
                  Agent on the first and sixteenth days of each month under the
                  calendar year.

                  In case the amount of Packing Credit Facility utilized cannot
                  be proportionately maintained in accordance with the ratio
                  specified above, the Facility Agent shall divide the amount as
                  close as possible to the proportionate ratio specified above.

4.3      UTILIZATION OF OVERDRAFT FACILITY

         4.3.1    Subject to Clauses 3.1 and 3.2 and other conditions specified
                  in this Agreement or the Transaction Document, on any Banking
                  Days during the Availability Period for Working Capital
                  Facility, the Borrower is entitled to utilize the Overdraft
                  Facility with Bank of Ayudhya in accordance with the
                  conditions specified in the Documents for the Utilization of
                  Overdraft Facility made with the Bank of Ayudhya.

         4.3.2    The maximum amount for the Overdarft Facility that the
                  Borrower is entitled to utilize under this Agreement is Baht
                  10,000,000 (Ten Million Baht).

         4.3.3    In case Bank of Ayudhya changes the form of Overdraft
                  Agreement, the Borrower agrees to execute new Overdraft
                  Agreement in compliance with the new format in substitution
                  for the old Overdraft Agreement to Bank of Ayudhya immediately
                  upon request by the Bank.

         4.3.4    The Utilization of Overdraft Facility must be renewed on a
                  yearly basis in accordance with the conditions specified by
                  Bank of Ayudhya and/or the conditions specified in the
                  Documents for the Utilization of Overdraft Facility.

4.4      UTILIZATION OF SHORT TERM WORKING CAPITAL FACILITY

         4.4.1    Subject to Clauses 3.1 and Clause 3.2 and other conditions
                  specified in this Agreement or the Transaction Documents, on
                  any Banking Days during the Availability Period for Working
                  Capital Facility, the Borrower is entitled to utilize the
                  Short Term Working Capital Facility in Baht by executing the
                  Documents for the Utilization of Short Term Working Capital
                  Facility to IFCT no later than two (2) Banking Days before
                  that Utilization date for


                                      -31-



                  the Short Term Working Capital Facility and shall deliver a
                  Receipt to IFCT on each Utilization Date for Short Term
                  Working Capital Facility obtained from IFCT.

         4.4.2    The maximum amount the Borrower is entitled to utilize the
                  Short Term Working Capital Facility from IFCT under this
                  Agreement is Baht 70,000,000 (Seventy Million Baht).

         4.4.3    The maturity of each Short Term Working Capital Facility will
                  not exceed one hundred and twenty (120) days from the
                  Utilization Date and in any case shall not exceed the
                  Availability Period for Working Capital Facility unless IFCT
                  will agree otherwise.

         4.4.4    The Borrower will issue and deliver Promissory Note to IFCT as
                  specified by IFCT in relation to the utilization of Short Term
                  Working Capital Facility in compliance with the conditions
                  specified by IFCT and/or the conditions specified in the
                  Documents for the Utilization of Short Term Working Capital
                  Facility.

         4.4.5    The utilization of Short Term Working Capital Facility must be
                  renewed on a yearly basis in accordance with the conditions
                  specified by IFCT and/or the conditions specified in the
                  Documents for the Utilization of Short Term Working Capital
                  Facility.

         4.4.6    Subject to the conditions of Clause 4.4.2, for any amount
                  drawndown by the Borrower under the Short Term Working Capital
                  Facility and has been prepaid or repaid by the Borrower, the
                  Borrower is entitled to drawdown such amount again under the
                  terms set forth by IFCT and/or the terms specified in the
                  Documents for the Utilization of Short Term Working Capital
                  Facility.

5.       FEES AND INTEREST

5.1      LONG TERM FACILITY

         5.1.1    FRONT END FEE FOR THE LONG TERM FACILITY
                  Within seven (7) days from the Effective Date of this
                  Agreement, the Borrower will pay the front end fee for the
                  Long Term Facility to IFCT for the amount of Baht 1,500,000
                  (One Million Five Hundred Thousand Baht) and to the Bank of
                  Ayudhya for the amount of Baht 1,450,000 (One Million Four
                  Hundred Fifty Thousand) by using bank checks of the commercial
                  bank which has its head office or branches in Bangkok
                  Metropolis and payable in the name of IFCT or Bank of Ayudhya.

         5.1.2    INTEREST FOR THE LONG TERM FACILITY

                  The interest rate for the Loan in relation to the Long Term
                  Facility will be calculated as an annual rate specified by the
                  Facility Agent on the date of first drawdown date and on the
                  date the interest for the Long Term Facility has changed at
                  the following rate:

                  (1)      From the first drawdown date until 23 April 2003 at
                           the rate of seven (7) percent per annum.

                  (2)      From 24 April 2003 until 31 December 2005 at the rate
                           equal to Average MLR per annum.

                  For each Interest Period, the Borrower will pay interest for
                  the Loan under the Long Term Facility in compliance with the
                  conditions in this Agreement to the Facility Agent for the
                  benefit of the Long Term Creditors pursuant to its Proportion
                  of Debt by payment within 10:00 a.m. (Bangkok time) on the
                  last Banking Day of each month under the calendar year.


                                      -32-



5.2      PACKING CREDIT FACILITY

         The interest rate for the Loan under Packing Credit Facility will be
         calculated on an annual basis specified by the Facility Agent as Market
         Rate.

         For each Interest Period, the Borrower will pay such interest in
         compliance with the conditions specified by each Packing Credit
         Creditor in the Documents for the Utilization of Packing Credit
         Facility of such Packing Credit Creditor. In case those documents do
         not specify any specific condition on this, the Borrower will pay
         interest on the last Banking Day of each month under the calendar year.

5.3      WORKING CAPITAL FACILITY

         5.3.1    FRONT END FEE FOR THE WORKING CAPITAL FACILITY
                  Within seven (7) days from the Effective Date of this
                  Agreement, the Borrower will pay front end fee for the Working
                  Capital Facility to IFCT for the amount of Baht 350,000 (Three
                  Hundred Fifty Thousand Baht) and to Bank of Ayudhya for the
                  amount of Baht 50,000 (Fifty Thousand Baht). The payment of
                  front end fee in relation to the Working Capital Facility
                  shall be made by the Borrower by using similar method as the
                  payment of front end fee in relation to the Long Term Facility
                  as specified in Clause 5.1.1.

         5.3.2    INTEREST FOR THE OVERDRAFT FACILITY

                  The Borrower will pay the interest for Overdraft Facility to
                  Bank of Ayudhya under this Agreement at the rate equal to MOR
                  of Bank of Ayudhya.

                  For each Interest Period, such interest will be paid pursuant
                  to the conditions specified by Bank of Ayudhya in the
                  Documents for the Utilization of Overdraft Facility on a
                  compound basis. In case those documents do not specify any
                  specific condition on this, the Borrower will pay interest on
                  the one day prior to the last Banking Day of each month under
                  the calendar year.

         5.3.3    INTEREST FOR THE SHORT TERM WORKING CAPITAL FACILITY

                  The Borrower will pay interest for the Short Term Working
                  Capital Facility to IFCT under this Agreement at the rate
                  equal to MOR of IFCT.

                  For each Interest Period, such interest will be paid pursuant
                  to the terms specified by IFCT in the Documents for the
                  Utilization of Short Term Working Capital Facility. In case
                  those documents do not specify any specific condition on this,
                  the Borrower will pay interest on the last Banking Day of each
                  month under the calendar year.

5.4      THE CALCULATION OF INTEREST FOR ALL TYPES OF FACILITIES

         Interest for all types of Facilities will be calculated on the basis of
         actual number of days elapsed and a year of 365 days for the Facilities
         in Baht and a year of 360 days for the Facilities in other foreign
         currencies other than Baht.

5.5      FACILITY AGENT'S FEE AND SECURITY AGENT'S FEE

         The Borrower will pay Facility Agent's Fee and Security Agent's Fee in
         accordance with the conditions specified in the letter(s) between the
         Facility Agent, Security Agent and Borrower dated 23 April 2001. The
         Borrower will pay the Facility Agent's Fee and Security Agent's Fee
         within seven (7) days from the Effective Date of this Agreement and
         every anniversary thereof and shall be paid by using similar method as
         the payments of other fees to the Creditor under Clause 5.1.1 of this
         Agreement.

6.       REPAYMENT AND PREPAYMENT

6.1      LONG TERM FACILITY


                                      -33-



         6.1.1    The Borrower shall repay the Loan under the Long Term Facility
                  to each Long Term Creditor on the last Banking Day of March,
                  June, September and December (for the total 18 installments)
                  in accordance with Repayment Schedule commencing from 30
                  September 2001 onwards.

         6.1.2    Before 10.00 a.m on each Repayment Date, the Borrower will
                  repay the Loan to the Facility Agent for the benefit of the
                  Long Term Creditors in accordance with the condition of Clause
                  6.1.1 and in compliance with the Repayment Schedule. In case
                  the Borrower does not utilize the whole amount of Long Term
                  Facility, the amount of Loan to be repaid by the Borrower on
                  each Repayment Date will be reduced in the inverse order of
                  maturity.

         6.1.3    After the Borrower has repaid the Loan, the Borrower may not
                  utilize such repayment amount again.

         6.1.4    The Borrower is entitled to prepay the Loan in relation to the
                  Long Term Facility in whole or in part on any Interest Payment
                  Date before the Repayment Schedule in compliance with the
                  following conditions:

                  (a)      The Borrower has delivered the notice in writing
                           specifying the intention to prepay the Loan by
                           specifying the amount to be prepaid and the date of
                           such prepayment to the Facility Agent in advance no
                           later than thirty (30) Banking Days;

                  (b)      Subject to Clause 7.1, the amount to be partially
                           prepaid will be in the amount of not less than
                           5,000,000 Baht (Five Million Baht) or the integral
                           multiple of 5,000,000 Baht (Five Million Baht);

                  (c)      The Borrower shall prepay the Loan together with
                           interest calculated until the date of such prepayment
                           and any other amount which is due and payable under
                           this Agreement;

                  (d)      The amount prepaid will firstly be used to pay the
                           expenses which are due under this Agreement. After
                           that it will be used to pay the fees and interest
                           which are due and payable and the Loan in the inverse
                           order of maturity;

                  (e)      On each Prepayment Date, the Borrower agrees to pay
                           the prepayment fee equal to two percent (2%) of the
                           amount prepaid to the Facility Agent for the benefit
                           of the Long Term Creditors in compliance with their
                           Proportion of Debt in relation to the Long Term
                           Facility except in the case where the prepayment
                           money is obtained from the operation of the Borrower
                           or from the capital increase of the Borrower; in
                           which case the Borrower shall not be responsible to
                           pay the prepayment fee.

         6.1.5    Any notices of prepayment given by the Borrower shall be
                  irrevocable and the Borrower shall be bound to make the
                  prepayment in accordance with such notice.

         6.1.6    Except as otherwise clearly mentioned in this Agreement, the
                  Borrower is not entitled to prepay any or all part of the
                  Loan. The Loan which is prepaid shall not be available for
                  further drawdown.

6.2      REPAYMENT OF PACKING CREDIT FACILITY AND WORKING CAPITAL FACILITY

         The Borrower shall comply with all the conditions specified in the
         Documents for the Utilization of Packing Credit Facility, Documents for
         the Utilization of Overdraft Facility, and the Documents for the
         Utilization of Short Term Working Capital Facility or other relevant
         documents or agreements


                                      -34-



         and shall reduce Packing Credit Facility and all types of Working
         Capital Facility to zero upon the expiry of Availability Period for
         Packing Credit Facility or the Availability period for Working Capital
         Facility (as the case may be).

7.       PAYMENT

7.1      Except as otherwise expressly provided under this Agreement, on each
         day on which any sum is due under this Agreement, the Borrower shall
         make payment to the Creditors in Baht (or in other foreign currency (in
         some cases) for the Packing Credit Facility) which may be utilized
         immediately within that day within 10.00 a.m. Bangkok time by, for the
         case of Long Term Facility, payment to the Facility Agent for the
         benefit of the Creditors or payment directly to each Creditor in
         accordance with their Proportion of Debt for Long Term Facility and for
         the other types of Facilities, by direct payments to the Creditors for
         such Facilities.

         For Packing Credit Facility which is denomiated in other foreign
         currency other than Baht, the Borrower hereby irrevocably waives any
         rights it may have under Section 196 of the Civil and Commercial Code
         of Thailand (or any modification or re-enactment thereof for the time
         being in force) to make payment under the Packing Credit Facility in
         Baht and shall make payment to the Packing Credit Creditors under the
         terms and conditions specified in the Documents for the Utilization of
         Packing Credit Facility.

7.2      The Borrower shall promptly upon demand by the Facility Agent make or
         cause to make any evidence of debt to evidence the obligations of the
         Borrower under this Agreement.

7.3      The Borrower agrees to be bound as each Creditor records in its book of
         account and other records in the absence of manifest error.

7.4      Except as otherwise specified in this Agreement or the Transaction
         Documents, if any due date for payment under this Agreement is on any
         Banking Holidays such payment shall be extended to the next succeeding
         Banking Day except in the case that the succeeding Banking Day is in
         the subsequent month in which case the due date for the payment shall
         be shortened to be on the last Banking Day of that month.

8.       THE FACILITY AGENT, THE SECURITY AGENT AND THE CREDITORS

8.1      APPOINTMENT

         (a)      Each of the Creditors hereby appoints Bank of Ayudhya to act
                  as the Facility Agent of the Creditors and appoints IFCT as
                  the Security Agent of the Creditors and authorizes the
                  Facility Agent and Security Agent to act in compliance with
                  the terms of this Agreement and the Transaction Document on
                  behalf of the Creditors and/or the Borrower. In addition, the
                  Facility Agent and the Security Agent may perform its duties
                  under this Agreement and the Transaction Documents through
                  agent, employee or professional consultant;

         (b)      Each of the Creditors hereby appoints the Security Agent to
                  sign all the documents, instruments and agreements relating to
                  the Security on its behalf.

8.2      OBLIGATIONS OF THE FACILITY AGENT

The Facility Agent has the following duties:

         (1)      promptly inform each of the Creditors of the contents of any
                  notice, demand or document concerning this Agreement upon
                  receipt of such notice, demand or other document, including
                  inform the portions of each type of Facilities as notified by
                  the Borrower to the Facility Agent pursuant to Clause 11.1.15
                  on each of the first and sixteenth day of each month under the
                  calendar year.


                                      -35-



         (2)      promptly notify each of the Creditors of the occurrence of any
                  Event of Default in case

                  (a)      any official of the Facility Agent who is directly
                           responsible for administration of this Agreement has
                           been notified by the Borrower, the Creditor or other
                           reliable source; or

                  (b)      any official of the Facility Agent who is directly
                           responsible for administration of this Agreement
                           actually knows about such Event of Default.

         (3)      notify the Creditors about the status of the conditions
                  precedent as specified in Clause 3 as appropriate.

         (4)      subject to the terms and conditions of this Agreement, acts or
                  refrains from acting for the benefit of all the Creditors or
                  in accordance with instruction of the Creditors or Majority
                  Creditors.

         (5)      review and notify the report prepared by the Borrower in
                  relation to the drawdown of Facilities under this Agreement to
                  the other Creditors.

         (6)      inform the Borrower in advance of the amount of interest
                  and/or principal of the Long Term Facility which the Borrower
                  has to pay to the Long Term Creditors on each Interest Period
                  or Repayment Schedule.

8.3      RIGHTS OF THE FACILITY AGENT AND SECURITY AGENT

         In performing its duties under this Agreement, the Facility Agent and
         the Security Agent has the following rights:

         (1)      assume that no Event of Default and no prespective Event of
                  Default has occurred and the Borrower is not in breach of any
                  of its obligation under this Agreement unless and until it has
                  actual knowledge or has received actual notice under Clause
                  8.2 (2);

         (2)      rely upon the written notice, certificate, order or other
                  documents believed by it to be genuine and correct which are
                  duly signed by the Authorized Director or Authorized Officer
                  of the person preparing such notice, certificate, order and
                  document and shall not be liable to any other party under this
                  Agreement for any loss incurred as a result of such reliance
                  (other than in cases of its gross negligence or willful
                  misconduct); and

         (3)      engage and pay for the advice and services of any lawyer,
                  accountant, advisor independent appraiser or valuer or other
                  professional advisor or expert as it may consider necessary,
                  expedient or desirable upon consent by the Creditors and rely
                  on and act upon such advice so obtained.

         (4)      the time frame for the performance of obligations of the
                  Facility Agent shall be the period commencing from the
                  Effective Date of this Agreement and expiring on the later of
                  (a) five (5) years from such date and (b) the date the
                  Borrower has paid the Debt under this Agreement and the
                  Transaction Documents in full while the Security Agent shall
                  perform its obligations until the Creditors have received the
                  payment of Debt under their respective Proportion of Debt in
                  full from the Borrower.


                                      -36-



8.4      INDEMNITY

         The Creditors agree to reimburse and indemnify the Facility Agent or
         Security Agent in accordance with their respective Commitment
         Percentages to the extent not actually reimbursed by the Borrower from
         and against all liabilities of claims or proceeding resulting from the
         performance by the Facility Agent or Security Agent under this
         Agreement or which is advance or expenses incurred by the Facility
         Agent or Security Agent for any enforcement or preservation of the
         rights of the Creditors under this Agreement or the Transaction
         Documents provided that no Creditor shall be liable for any such
         liabilities resulting from the gross negligence or willful misconduct
         of the Facility Agent or Security Agent.

8.5      BEFORE THE DECLARATION OF AN EVENT OF DEFAULT

         Before declaring any or all of the debts of the Borrower to be
         immediately due and enforceable pursuant to Clause 12.2 of this
         Agreement, the Facility Agent will consult with the Creditors and act
         in compliance with the unanimous instruction of the Creditors. The
         Creditors agree to reimburse any loss to the Facility Agent and will
         protect the Facility Agent from the claims, damages, penalty and other
         expenses of whatsoever nature which have been claimed from the Facility
         Agent or as the Facility Agent may have to suffer or be responsible
         from any act performed by the Facility Agent in the capacity of the
         Facility Agent in accordance with the Commitment Percentage of the
         Creditors under this Agreement.

8.6      DISTRIBUTE OF THE PROCEEDS AMONG THE CREDITORS

         Subject to Clause 14, the Facility Agent or Security Agent (as the case
         may be) shall, as soon as practicable, distribute the proceeds which is
         the part of each Creditor to each Creditor in accordance with the
         Proportion of Debt in the principal, interest, fee and other types of
         money actually received by the Facility Agent or Security Agent (as the
         case may be) from the Borrower on behalf of the Creditors in accordance
         with such part of Facility in which such Creditor has some stake in. If
         such money is not sufficient to be distributed among the Creditors,
         each Creditor will receive such part of money in accordance with its
         Proportion of Debt.

8.7      THE RIGHTS AND POWER OF THE FACILITY AGENT AND THE SECURITY AGENT AS
         ONE OF THE CREDITOR

         As the Facility Agent and the Security Agent are Creditors which is
         obligated to perform in compliance with this Agreement, the Facility
         Agent and the Security Agent has the right and power under this
         Agreement the same as other Creditor and has the right and obligation
         as if they are not Facility Agent or Security Agent. The term
         "Creditor" or "Creditors" shall include the Facility Agent and the
         Security Agent as one of the Creditors except as expressly provided
         otherwise in this Agreement.

8.8      THE OBLIGATIONS OF EACH CREDITOR

         The obligations of each Creditor under this Agreement are several and
         no Creditor shall be responsible for the obligations of the other
         Creditor under this Agreement and the failure of any Creditor to
         perform any of its obligations under this Agreement shall not be deemed
         to release other Creditor from its obligation to perform under this
         Agreement.

8.9      RESIGNATION AND TERMINATION OF FACILITY AGENT OR SECURITY AGENT

         The Facility Agent or Security Agent may resign at any times and the
         Creditors may terminate the Facility Agent or Security Agent by giving
         written notice to the Creditors and the Borrower in


                                      -37-



         advance at least sixty (60) days from the date the Facility Agent or
         the Security Agent intends to resign or from the date for such
         termination and the Creditors shall perform the obligations of the
         Facility Agent or Security Agent until there is any appointment of the
         substituted Facility Agent or Security Agent.

         The new Facility Agent or Security Agent shall have all the rights,
         powers and obligations of the resigned or terminated Facility Agent or
         Security Agent and the resigned Facility Agent or Security Agent will
         be released from all the obligations and commitments as the Facility
         Agent or Security Agent under this Agreement immediately upon the
         appointment of the new Facility Agent or Security Agent.

9.       CHANGE IN CIRCUMSTANCES

9.1      UNLAWFULNESS OR IMPRACTICALITY

         Upon the occurrence of any of the following events:

         9.1.1    any enactment or change in laws or regulations or any change
                  in interpretation or application of any laws or regulations
                  resulting in any part of this Agreement and/or the entering
                  into this Agreement of any Creditor is illegal or not in full
                  force and effect;

         9.1.2    any compliance in good faith by any Creditor with any
                  applicable instruction (whether or not having force of laws)
                  of the Bank of Thailand, government agency or authority made
                  it impracticable for that Creditor to perform any condition of
                  this Agreement.

         In such event, that Creditor will inform the Facility Agent and the
         Borrower of the event in which case the obligations of such Creditor
         whether in whole or in part will be terminated and the Borrower will
         repay the debt which is affected in full immediately or provide
         additional security for the debt which is not due and enforcable in
         compliance with the form specified by the Facility Agent upon request
         by the Facility Agent for the benefit of that Creditor.

9.2      INCREASED COST

         9.2.1    In the event that

                  (a)      any enactment or change in laws or regulation or any
                           change in the interpretation or application of any
                           laws or regulation; or

                  (b)      any compliance in good faith by a Creditor with any
                           applicable instruction (whether or not having the
                           force of laws) of the Bank of Thailand, any other
                           governmental agency or authority shall

                           (1)      increase the cost of any Creditor to perform
                                    under this Agreement and/or

                           (2)      reduce any interest, fee or any payment
                                    received or receivable by that Creditor
                                    under this Agreement.

         In this circumstance, the Borrower shall perform as follows:

                  (a)      The Borrower shall pay additional amount as the
                           Creditor specified as necessary to compensate it for
                           such increased cost or to compensate for the amount
                           of interest, fees or other payment which the Creditor
                           is entitled to receive under this


                                      -38-



                           Agreement equal to the shortfall of such amount to
                           that Creditor upon request by such Creditor; and

                  (b)      After the Borrower has received such notification to
                           pay the money under such Clause (a), there is still
                           additional cost or there is still an event the result
                           of which will reduce the interest, fee or other
                           payment entitled by such Creditor under this
                           Agreement, the Borrower may select to pay the
                           relevant part of Debt which is affected in full by
                           acting in compliance with the condition set froth
                           Clause 9.1.

         9.2.2    After the occurrence of the event pursuant to Clause 9.2.1,
                  the Creditor is entitled to demand the Borrower to pay the
                  debt under this Clause at any time even after the settlement
                  of debt under this Agreement (except the debt under this
                  Clause) in full.

9.3      CHANGE IN BASIS FOR INTEREST OR FEE CALCULATION

         9.3.1    At any times, if

                  (a)      the Facility Agent or any Creditor considers that
                           there is any event which effect the money market in
                           general and there is no proper method to determine
                           the fees or interest under Clause 5; or

                  (b)      The Facility Agent is notified by any Creditor that
                           there is no determination of Average MLR or MOR or
                           Market Rate any longer, the Facility Agent shall give
                           notice of such determination to the Creditors and the
                           Borrower within seven (7) days from the date of such
                           event or from the date of notification by the
                           Facility Agent (as the case may be).

         9.3.2    After the giving of a notice pursuant to Clause 9.3.1 last
                  paragraph, the Borrower and the Creditors shall enter into
                  negotiation in good faith with a view to agreeing upon and
                  alternative basis for the calculation of interest, fee,
                  Interest Period and Interest Payment Date and other relevant
                  conditions (hereinafter referred to as "Substituted Basis of
                  Financing").

         9.3.3    If the Creditors and the Borrower can agree in writing for the
                  Substituted Basis of Financing within thirty (30) days from
                  the date of notification by the relevant notification pursuant
                  to Clause 9.3.1 last paragraph, such basis shall take effect
                  in accordance with its terms.

         9.3.4    If no Substituted Basis of Financing is agreed upon within
                  thirty (30) days from the date of notification or the
                  Creditors determine that the Agreement on the Substituted
                  Basis of Financing cannot be completed prior to the expiry of
                  such period, the parties agree to perform in compliance with
                  the following conditions:

                  (a)      The Creditors have the right to require the Borrower
                           to pay the affected part of the Facility by sending
                           notice in advance specifying the date for such
                           prepayment within thirty (30) days from the date of
                           notification to the Borrower. In such case, the
                           Borrower will repay the affected part of the Facility
                           together with interest accrued thereon [in case there
                           is no determination of Average MLR, MOR or Market
                           Rate (as the case may be) the last available rate
                           applicable thereto will be used] on the calculation
                           of the interest which is due or payable and other
                           amount of money which is due and payable to the
                           Creditors within the time specified therein; and

                  (b)      In any case, so long as the circumstances referred to
                           in Clause 9.3.1 (a) or (b) shall continue and the
                           Facility Agent have sent the notification of such
                           event, the Borrower is entitled to repay the affected
                           part of Facility in full to the Creditors


                                      -39-



                           together with the interest [in case there is no
                           determination of Average MLR, MOR or Market Rate (as
                           the case may be) the last available interest rate
                           will be used] and other amount due under this
                           Agreement without having to pay the penalty fine.

         9.3.5    Upon the occurrence of the event pursuant to Clause 9.3.1 and
                  there is no agreement on the Substituted Basis of Financing,
                  the interest shall be calculated at the annual rate which is
                  equal to the aggregate of (1) the per annum interest rate
                  determined by the Creditors from time to time and (2) the
                  average interest provided by the Creditor to the prime
                  customers as the substitution for Average MLR, MOR or Market
                  Rate (as the case may be) provided the Borrower will pay such
                  interest calculating from the last day of interest period
                  designated by the Facility Agent from time to time.

         9.3.6    If there is a notification pursuant to Clause 9.3.1 before the
                  utilization of any Facility, the Borrower is not entitled to
                  utilize such Facility except the Substituted Basis of
                  Financing have been agreed upon.

10.      REPRESENTATIONS AND WARRANTIES

10.1     THE BORROWER REPRESENTS AND WARRANTS TO THE FACILITY AGENT, THE
         SECURITY AGENT AND THE CREDITORS THAT:

         10.1.1   The Borrower is a limited company registered under Thai laws
                  and has the registered office at the address mentioned above
                  and has the branch offices as specified in the affidavit. The
                  Borrower is authorized or registered to conduct the business
                  in Thailand and has power to hold titles to all of its assets
                  (including Equipment, Land and Buildings). The Borrower has
                  the right to operate its business operation or has the plan to
                  operate in the future.

         10.1.2   The Borrower has the right and power to perform in accordance
                  with this Agreement and the Transaction Documents and has
                  taken all necessary actions to authorize the execution of this
                  Agreement and the Transaction Documents.

         10.1.3   The Borrower has obtained the authorization from any
                  governmental agency, competent authority and other related
                  persons for or in connection with the execution and
                  performance of this Agreement and the Transaction Documents
                  and under the Project.

         10.1.4   The execution of this Agreement and the Transaction Documents
                  or the performance by the Borrower of its obligations under
                  this Agreement and the Transaction Documents do not and shall
                  not:

                  (a)      contravene or contradict to the terms, conditions,
                           representations, contracts, agreements, laws or
                           regulations binding on the Borrower.

                  (b)      contravene any restrictions on the power to borrow
                           money, incur indebtedness or any other authorities of
                           the Borrower.

                  (c)      result in incurring any encumbrances on all or any
                           part of its assets or income for the benefit of any
                           other persons other than the Creditors under this
                           Agreement or result in the Borrower being in default
                           or breach any document or agreement in which the
                           Borrower is a party or the assets of the Borrower
                           have to be encumbered other than for the benefit of
                           the Creditors under this Agreement.

         10.1.5   The Borrower has taken all necessary actions according to the
                  laws to authorized the Authorized Director and/or the
                  Authorized Officer to execute and deliver this Agreement and
                  each of the Transaction Documents to which the Borrower is a
                  party including any documents, instruments and contracts
                  necessary to be executed according to such agreements.


                                      -40-



         10.1.6   This Agreement and the Transaction Documents (whether or not
                  existing on the date of this Agreement) constitute legal,
                  valid and binding obligations of the Borrower and each person
                  entered into the said Agreement and the Transaction Documents.

         10.1.7   No litigation or arbitration proceeding is pending and no case
                  is under the consideration of any administrative bureaus and
                  no prospective litigation against the Borrower or to enforce
                  on assets or rights of the Borrower; provided that the result
                  of such litigation, arbitration or proceeding may materially
                  and adversely affect the business operation under the Project,
                  assets, debts or status (financial or otherwise) of the
                  Borrower or the Borrower's ability to perform its obligations
                  under this Agreement and the Transaction Documents.

         10.1.8   The Borrower has not done any acts against the laws or as
                  required by laws, regulations, orders, agreements,
                  representations, instruments, preferential rights,
                  concessions, permits, licenses, authorizations, obligations,
                  or any duties binding on the Borrower or its assets or incomes
                  provided that the result of any acts against the laws or as
                  required by laws of the Borrower may materially affect the
                  business operation under the Project, assets, debts or status
                  (financial or otherwise) of the Borrower or the Borrower's
                  ability to perform its obligations under the Agreement and the
                  Transaction Documents and no Events of Default occurred and
                  still in existence.

         10.1.9   The Borrower is not adjudicated bankrupt, under the
                  receivership or insolvent or any court procedures, resolutions
                  or application for bankruptcy has been taken or filed for the
                  order of bankruptcy, control of assets, debt restructure,
                  dissolution, liquidation of the borrower or a receiver,
                  administrator, planner, plan administrator or similar officers
                  is appointed or under the procedure of business rehabilitation
                  in the Court according to the Bankruptcy law.

         10.1.9   No guarantee agreement issued by the Borrower in favor of
                  Wells Fargo Bank and/or U.S. Bank or any other bank to
                  guarantee the debt of the Guarantor.

         10.1.10  The Borrower represent and warrant that the conditions under
                  Clause 10.1.3, 10.1.4,10.1.6,10.1.7,10.1.8 and 10.1.9 shall be
                  deemed to constitute the representations and warranties of the
                  Guarantor.

10.2     The representations and warranties in Clauses 10.1.1 to 10.1.11 are the
         representations and warranties of the Borrower to the Facility Agent,
         Security Agent and Creditors made on the Effective Date of this
         Agreement and still be in full force and effect after the Effective
         Date of this Agreement until the Creditors have received payment for
         the Debt in full.

11.      AFFIRMATIVE COVENANTS AND NEGATIVE COVENANTS

11.1     GENERAL AFFIRMATIVE COVENANTS
         The Borrower agrees with the Facility Agent, the Security Agent and the
         Creditors that as long as any debt under this Agreement and/or
         Transaction Documents is outstanding, the Borrower covenants that it
         shall:

         11.1.1   promptly on reasonable request from the Creditors, provides
                  the Creditors through the Facility Agent the statement and
                  other information relating to its operation, asset, condition
                  (financial or otherwise), Project, business plan or status of
                  the Borrower as the Creditors may require from time to time
                  with appropriate reason, including the report on the change of
                  structure or shareholder of the Borrower or change in control
                  of the Guarantor and the details relating to Director and
                  authorization of the Director of the Borrower. In case there
                  is any change of the structure or shareholder of the Borrower
                  or change in control of the Guarantor or the details relating
                  to Directors and/or authorization of the Director of the
                  Borrower, the Borrower must receive the written consent from
                  the Creditors in advance. For the purpose of this Clause
                  11.1.1, the term "control" means the power, whether directly
                  or indirectly, to order or designate the management or
                  policies of a company whether by being the holder of voting
                  shares, by contract or otherwise.


                                      -41-



         11.1.2   the Borrower shall promptly notify the Facility Agent about
                  the following matters (together with all the relevant details)

                  (a)      the occurrence of any Event of Default;

                  (b)      the occurrence of any current litigation, arbitration
                           or administrative proceeding or which is pending or
                           where any person expressly shows its intention to sue
                           the Borrower or the Guarantor or to enforce the
                           assets or rights of the Borrower or the Guarantor
                           under any law;

                  (c)      the commencement by the Borrower or the Guarantor of
                           any negotiation with any other creditors of the
                           Borrower or the Guarantor apart from the Creditors
                           for the restructure of any debt of the Borrower or
                           the Guarantor;

                  (d)      the dispute between the Borrower or the Guarantor and
                           any governmental authorities with respect to the
                           payment of taxes or any matter where in any such case
                           the dispute if resolved adversely to the Borrower or
                           the Guarantor would be materially and adversely
                           affect the operation, business, asset, debt or
                           condition (financial or otherwise) of the Borrower or
                           the Guarantor or the ability of the Borrower or the
                           Guarantor to perform its obligation of the Borrower
                           or the Guarantor under this Agreement or the
                           Transaction Documents or any financial document
                           executed by the Guarantor with U.S. Bank or Wells
                           Fargo Bank or any financial institution or any other
                           document with any third party; and

                  (e)      any change in the personnel who is authorized to
                           sign, certify true and correct and deliver notice and
                           document or instrument as specified in this Agreement
                           on behalf of the Borrower.

         11.1.3   The Borrower shall ensure that the obligation of the Borrower
                  under this Agreement and/or the Transaction Documents at all
                  time rank at least PARRI PASSU with all other obligations of
                  the Borrower at all time except for preferential rights
                  arising by operation of the laws of Thailand.

         11.1.4   The Borrower shall pay all taxes upon and of the assets,
                  revenue or income or profit of the Borrower before the same
                  shall become overdue and shall pay or cause to be paid any
                  money in compliance with the lawful claims in whatsoever
                  nature which is the claim where the non-payment of which may
                  result in the encumbrance over the asset, revenue, income or
                  profit of the Borrower or any other preferential rights except
                  where (1) taxes or money is being contested in good faith by
                  proper proceeding and (2) such reserve or provision as may be
                  required by generally accepted accounting principal and taxes
                  shall have been made therefore.

         11.1.5   The Borrower shall maintain the assets, Equipment and
                  appliances in the Project of the Borrower in the good
                  maintenance status, operational and in good condition and will
                  repair, change and improve the asset, Equipment and appliance
                  as necessary and appropriate from time to time.

         11.1.6   The Borrower agrees to deliver the following documents to the
                  Facility Agent

                  (a)      as soon as they are available (but in event within
                           one hundred and twenty (120) days) after the end of
                           each fiscal year of the Borrower and the Guarantor
                           after the Effective Date of this Agreement, copies
                           of the Financial Statements of the Borrower and the
                           Guarantor for each fiscal year equal to the number of
                           the Creditors and ensure in each case that they were
                           prepared in accordance with accounting principles and
                           practices generally acceptable in Thailand (in the
                           case of the Borrower) or in the United States of
                           America (in


                                      -42-



                           the case of the Guarantor) and gives in conjunction
                           with the notes thereto including the note on changes
                           in the accounting principles and practices (1)
                           financial condition of the Borrower and the Guarantor
                           on the date of such Financial Statements and (2) the
                           result of the operation of the Borrower and the
                           Guarantor for the period to which they relate, having
                           been prepared with due care and diligence and were
                           audited by Auditor acceptable to the Creditors;

                  (b)      as soon as they are available, (but in any event
                           within forty five (45) days) after the end of each of
                           the three (3) months period after the Effective Date
                           of this Agreement, copies of unaudited quarterly
                           financial statements of the Borrower and the
                           Guarantor for such quarterly financial period
                           together with the cashflow statements and sources and
                           uses of funds in respect of such periods for the
                           number enough for all the Creditors having ensured
                           that they were prepared in accordance with accounting
                           principles and practices generally acceptable in
                           Thailand (in the case of the Borrower) or in the
                           United States of America (in the case of the
                           Guarantor) and gives in conjunction with the notes
                           thereto including the notes on changes in the
                           application of an accounting principles and practices
                           (1) the financial condition of the Borrower or the
                           Guarantor as of the last day of such financial period
                           and (2) the result of the operation of the Borrower
                           or the Guarantor for the period of which they relate,
                           having been prepared with the due care and diligence,
                           in the case of the Borrower or accepted by U.S. Bank,
                           Wells Fargo Bank or any other creditors of the
                           Guarantor, in case of the Guarantor;

                  (c)      simultaneously with the delivery of Financial
                           Statements for the three (3) month period of the
                           Borrower or the Guarantor pursuant to subclause (b)
                           above, the Borrower or the Guarantor shall deliver
                           certificate signed by its Authorized Director or
                           Authorized Officer certifying on the date of such
                           certification that (which must be dated not more than
                           ten (10) days before the date of delivery to the
                           Facility Agent) no Event of Default from the latest
                           submission of such certification under this subclause
                           (c) (or from the Effective Date of this Agreement for
                           the first submission of this certificate) or if such
                           certification cannot be made, the Borrower or the
                           Guarantor will specify the details of the Event of
                           Default which has happened together with all the
                           details of the things that the Borrower or the
                           Guarantor has made or proposed to be done to remedy
                           such Event of Default or status or other surrounding
                           circumstances.

         11.1.7   The Borrower shall duly and punctually perform and observe all
                  terms, covenants and conditions on its part to be performed
                  and observed under each of the documents to which the Borrower
                  is or will be the party and not offer or agree to enter into
                  any agreement to amend or cancel any of the Transaction
                  Documents the Facility Agent considers to be material and
                  shall proceed to ensure that the Transaction Documents are in
                  full force and effect.

         11.1.8   The Borrower shall obtain and maintain all authorization and
                  privileges from any governmental authority, bureau, agency or
                  other person in Thailand or other places as necessary in
                  connection with the execution, delivery or performance of the
                  Transaction Documents or related to the operation of the
                  Borrower or the Project of the Borrower.

         11.1.9   The Borrower shall notify the Facility Agent in writing of the
                  litigation or proceeding in court or other authority with
                  resulting in the prohibition or obstruction to the performance
                  of the Borrower under this Agreement or the Transaction
                  Documents or affect the validity and enforceability of this
                  Agreement or the Transaction Documents as soon as practicable.

         11.1.10  The Borrower shall allow the Facility Agent, the Security
                  Agent, the Creditors or the representatives of such persons to
                  during business hours examine the operation of the Borrower
                  including all documents which, in the opinion of the Facility
                  Agent, the Security


                                      -43-



                  Agent, the Creditors or the representatives of such person
                  consider to be related to the business operation of the
                  Borrower and the Board of Directors of the Borrower shall
                  strictly follow the advice and suggestion of the Facility
                  Agent, the Security Agent, the Creditors or the
                  representatives of such persons in relation to the
                  preservation of their rights over all or any part of the
                  Security or assets of the Borrower and will ensure as
                  necessary that the said advice and/or suggestion must be
                  approved by the shareholders of the Borrower with enough
                  majority votes pursuant to the Articles of Association of the
                  Borrower to make that advice and/or suggestion operational in
                  the event that according to the Articles of Association of the
                  Borrower such action requires approval from the shareholders
                  of the Borrower.

         11.1.11  The Borrower shall arrange to increase the registered capital
                  so that the registered capital and the paid-up capital of the
                  Borrower shall be no less than Baht 735,000,000 (Seven Hundred
                  Thirty Five Million Baht) within 31 December 2001 and shall
                  ensure that the capital increase shall not affect the
                  privileges under the Investment Promotion Certificate issued
                  by the Board of Investment of the Borrower. In addition, the
                  Borrower must arrange to deposit the shares resulting from
                  such capital increase to the possession of the Escrow Agent in
                  the form and substance satisfactory to the Creditors until the
                  Debt of the Borrower under this Agreement and the Transaction
                  Documents shall be paid in full.

         11.1.12  The Borrower shall maintain:

                  (a)      the ratio of Aggregate Debt to Equity at the rate of
                           not exceeding 3:1 as long as there is any Debt under
                           this Agreement and/or Transaction Documents
                           outstanding.

                  (b)      the ratio of all Long Term Debts to Equity at the
                           rate of not exceeding 2:1 as long as there is any
                           Debt under this Agreement and/or Transaction
                           Documents outstanding.

         11.1.13  The Borrower shall arrange for the Guarantor to support the
                  Project throughout the term of this Agreement which includes
                  the support in raw materials, and other necessary tools and
                  appliances and the marketing for the Project.

         11.1.14  The Borrower shall arrange for (a) the Guarantor to control
                  whether directly or indirectly the operation of the Borrower
                  and hold the shares in the Borrower whether directly or
                  through any of the Innovex Group Companies not less than 99.99
                  percent of the paid-up capital and (b) the Guarantor which is
                  the ultimate parent company to hold the shares in the last
                  layer in the Borrower to be the controller of the business of
                  the Borrower and the Borrower agrees to provide comfort to the
                  Creditors that throughout the term of this Agreement (1) there
                  will be no change in control in the Borrower in a way which
                  results in the Guarantor having no control over the Borrower
                  whether directly or through any of the Innovex Group
                  Companies, and (2) apart from the change of control in the
                  Borrower as aforesaid, there will be no similar kind of change
                  in control in the Guarantor. For the purpose of this Clause
                  11.1.14, the term "control" means the power, whether directly
                  or indirectly, to order or designate the management or
                  policies of a company whether by being the holder of voting
                  shares, by contract or otherwise.

         11.1.15  The Borrower shall inform the portions of each type of
                  Facilities drawndown by the Borrower under this Agreement
                  and/or the Transaction Documents to the Facility Agent in the
                  form and substance satisfactory to the Facility Agent on each
                  of the first and sixteenth day of each month under the
                  calendar year.

         11.1.16  The Borrower agrees that the Security currently held by the
                  Creditors is the Security which has preferential rights which
                  are valid and enforceable under the Thai law.


                                      -44-



11.2     COVENANT IN RELATION TO INSURANCE

         Throughout the term of this Agreement, the Borrower agrees to perform
         in accordance with the following matters:

         11.2.1   The Borrower shall obtain and maintain and/or arrange to
                  obtain and maintain insurance on the Building, Equipment,
                  stocks and other assets relating to the Project of the
                  Borrower in the insurable amount not less than the aggregate
                  commitments of the Creditors under this Agreement and the
                  Transaction Documents including third party liabilities
                  insurances which insurances will be the type of All Risks
                  insurance in compliance with the terms, conditions and within
                  the time the Creditors consider appropriate in which case, the
                  Borrower shall designate the Creditors to be the casualty
                  insurance agent as specified by the Creditors with the
                  insurance company acceptable to the Creditors and at the
                  amount acceptable to the Creditors and will designate the
                  Creditors as sole beneficiary of such insurances.

         11.2.2   In the event the Creditors determine that the insurance
                  effected and maintained pursuant to this sub-clause will not
                  at any time adequately cover the interest of the Creditors
                  under this Agreement or the Transaction Documents, the
                  Creditors may notify the Borrower to arrange the additional
                  insurance or change the insurance company and the Borrower (as
                  the case may be) shall comply with the request of the
                  Creditors at its own expenses and the conditions for such
                  insurance and the benefits shall be in compliance with Clause
                  11.2.1.

         11.2.3   The Borrower shall delivery or arrange to deliver the original
                  of all insurance policies or cover notes pursuant to the
                  condition of Clause 11.2.1 above to the Security Agent as soon
                  as practicable.

         11.2.4   The Borrower shall promptly pay all premiums (or installment
                  thereof) in respect of each of the policy of insurances
                  promptly and within the due date and produce copy of receipt
                  in respect of payment of such premiums (or installment thereof
                  ) or other evidence of such payment to the Security Agent as
                  accepted by the Security Agent in its own discretion within
                  fourteen (14) days from the date of payment and in case of
                  renewal of such policy produce to the Security Agent the
                  evidence of each such renewal no later than the date of expiry
                  of such policy and pay the renewal and other premiums (and
                  installment thereof) as required by the term of such policy
                  and shall promptly produce such evidence of payment to the
                  Security Agent and in case the Borrower fails to pay insurance
                  premiums (or installment thereof) in time the Creditor may pay
                  such premiums (or installment thereof) in accordance with the
                  Commitment Percentage on behalf of the Borrower in which case
                  the Borrower will repay such amount to the Creditors promptly
                  upon demand by the Creditors with interest at the Default
                  Interest Rate.

         11.2.5   The Borrower shall do all things necessary and provide all
                  documents, evidence and information and/or assist the Security
                  Agent to collect or recover any money which becomes due and
                  payable to the Security Agent or Creditors in respect of the
                  insurances referred to in this Agreement.

         11.2.6   The Borrower shall send notice to the Security Agent of the
                  occurrence of the loss under the insurance policy together
                  with details of the same.

11.3     NEGATIVE COVENANT

         The Borrower covenants with the Facility Agent, the Security Agent and
         the Creditors that as long as there is any Debt under this Agreement
         and/or Transaction Documents outstanding, the Borrower shall not
         without prior written consent of the Creditors perform any of the
         following acts:


                                      -45-



         11.3.1   The Borrower shall not merge or consolidate with or into any
                  other person or perform any act which have the feature and
                  consequence similar to merger or acquisition or take any step
                  with a view to dissolution, liquidation or winding-up.

         11.3.2   The Borrower shall not make any substantial change or
                  alteration in the nature of the business or Project in which
                  the Borrower is currently operating.

         11.3.3   The Borrower shall not sell, transfer, lend, lease or dispose
                  of the operation or asset or fixed asset of the Borrower
                  whether in whole or in part including not enter into any
                  securitization except in the ordinary course of business of
                  the Borrower or guarantee any debt of any of the Innovex Group
                  Companies and/or the Guarantor.

         11.3.4   Except the performance under this Agreement and the
                  Transaction Documents, the Borrower shall not incur or
                  maintain any obligation, debt or encumbrance by borrowing from
                  any person (including each Creditor under this Agreement) or
                  lending to any person or giving guarantee or other means
                  except

                  (a)      The borrowing from any of the Innovex Group Companies
                           (including the Guarantor of the Borrower) in the
                           subordinated nature, namely having the right for the
                           payment of debt after the Creditors receive all the
                           payment of Debt under this Agreement and Transaction
                           Documents in full; or

                  (b)      The debt incurred in the ordinary course of business
                           of the Borrower.

         11.3.5   The Borrower shall not transfer its rights or revenues or
                  income and shall not pay any Creditor under this Agreement
                  otherwise than pursuant to the methods specified in this
                  Agreement or Transaction Documents.

         11.3.6   Except for the Security provided to the Creditors prior to the
                  Effective Date of this Agreement or pursuant to the condition
                  of this Agreement or the Transaction Documents, the Borrower
                  shall not incur or allow any lien, mortgage, pledge or
                  encumbrances, option, preferential rights (except preferential
                  rights created by operation of laws) assignment or transfer by
                  way of security, deposit asset as security, trust receipt, any
                  agreement allowing one Creditor to have any rights over other
                  Creditors, securitization, benefit as the seller, lessee,
                  purchaser or lessor pursuant to the conditional purchase and
                  sale agreement, hire purchase, leasing (except commercial
                  lease of the appliances, stationary in the office, factory and
                  car in the normal business operation) installment agreement or
                  agreement with right for ownership retention in whatsoever
                  nature existing over the security, revenue or right whether in
                  whole or any part of the Borrower relating to the operating of
                  the business pursuant to the Project of the Borrower except
                  items designated by this Agreement for the benefit of the
                  Creditors or any Creditor and will not allow any person to
                  utilize the asset of the Borrower relating to the operation of
                  the Project of the Borrower and the Security; and

         11.3.7   The Borrower shall not pay dividend, interest or any money
                  according to the loan agreement or any other type of agreement
                  to the shareholders or Innovex Group Companies and/or
                  Directors except with prior written consent from the
                  Creditors.

         11.3.8   Throughout the term of this Agreement, the Borrower shall
                  arrange to prohibit the Guarantor to incur additional debt
                  whether with U.S. Bank, Wells Fargo Bank or any other creditor
                  in excess of the credit line of the Guarantor which is
                  currently the aggregate principal amount of US$ 37,000,000
                  (Thirty Seven Million United States Dollar).


                                      -46-



12.      EVENT OF DEFAULT

12.1     Each of the following events shall be an Event of Default unless the
         Creditors agree in writing in advance that it is not an Event of
         Default.

         12.1.1   The Borrower fails to pay any sums due hereunder and/or under
                  the Transaction Documents on the due date pursuant to the
                  terms of this Agreement and/or Transaction Documents.

         12.1.2   The Borrower fails to perform or observe any of its other
                  obligations under this Agreement and/or the Transaction
                  Documents for whatsoever reason and such failure the Facility
                  Agent considers that it is not remediable.

         12.1.3   Apart from the events under Clauses 12.1.1 and 12.1.2 of this
                  Agreement, the Borrower fails to perform or observe any of its
                  other obligations under this Agreement and/or the Transaction
                  Documents for whatsoever reason and such failure the Facility
                  Agent considers it is capable of remedy but that failure has
                  not been remedied within thirty (30) days from the earlier of
                  (a) the date on which the Borrower becomes aware or with the
                  exercise of reasonable diligence to have become aware of such
                  failure or (b) the date upon which the written notice of such
                  failure is given to the Borrower by the Facility Agent.

         12.1.4   Any representation or warranty given by the Borrower under
                  this Agreement or the Transaction Documents is not true, or
                  proves to have been untrue, incorrect or misleading in any
                  material respect or the Borrower fails to comply with any of
                  the affirmative and negative covenants as specified in Clause
                  11 which the Facility Agent considers to be material.

         12.1.5   (a) any indebtedness of the Borrower or the Guarantor becomes
                  due and payable prior to its stated majority or (b) any
                  indebtedness of the Borrower or the Guarantor which is payable
                  on demand or after the notice is not paid on demand or on the
                  expiry of due notice (as the case may be) or (c) the Borrower
                  or the Guarantor defaults in the payment of any indebtedness
                  (or upon the expiration of the any applicable grace period) or
                  (d) any guarantee or indemnity of the Borrower or the
                  Guarantor is not honor when due or demanded or (e) steps are
                  taken to enforce any encumbrances or other security of the
                  Borrower or the Guarantor given in respect of its liability or
                  liability of any other persons.

         12.1.6   Any of the authorization, permit or consent referred to in
                  Clause 9 of Attachment 5 is modified or restricted in the
                  nature which is not acceptable to the Creditors or revoked,
                  withdrawn, suspended, terminated or expire whether in whole or
                  in part or is not renewed or extended or not in full force and
                  effect in whatsoever nature or there is any promulgate,
                  announcement, cancellation or revocation or change in laws or
                  regulations or orders the result of which is the suspension,
                  change, cancel or except the performance of the obligation of
                  the Borrower under the Transaction Documents whether in whole
                  or in part.

         12.1.7   The Transaction Documents or any part of the Transaction
                  Documents cease to be in full force and effect at any time and
                  for whatever reason (except the expiration on the maturity or
                  the relevant parties have completed all the obligations under
                  the Agreement) or announce to be void or reject or ineffective
                  or the Borrower or any person oppose to the completion or
                  effectiveness of the Transaction Documents at any time or the
                  Borrower rejects that it has any obligation or commitment
                  under the Transaction Documents.

         12.1.8   Any action, proceeding or litigation is instituted in any
                  courts or authorities to prohibit or sustain the performance
                  of the Borrower under this Agreement or the Transaction
                  Documents in whatsoever nature which affects the legality,
                  completeness, binding effect or enforceability of the
                  Transaction Documents.


                                      -47-



         12.1.9   The performance of the Borrower or other person under the
                  Transaction Documents or the utilization by any Creditor of
                  its rights under this Agreement or the Transaction Document is
                  impossible or illegal.

         12.1.10  The Borrower ceases or demonstrates the possibility of ceasing
                  of the operation of the Borrower which is material or the
                  Borrower disposes of its operation or assets in whole or in
                  any material part.

         12.1.11  The Borrower or the Guarantor enters into any agreements with
                  any other creditors apart from the Creditors or be adjudicated
                  bankrupt or insolvent upon prove that the Borrower or the
                  Guarantor has more debts than assets, enter into receivership,
                  or transfer the rights for the benefit of its Creditor or
                  similar proceeding is instituted or any dissolution is made
                  for the issuance of the order in relation to the business
                  rehabilitation, bankruptcy, receivership, winding-up, dissolve
                  of operation, corporate restructuring or debt restructuring or
                  rehabilitation of the Borrower or the Guarantor, the
                  winding-up or any acts in similar nature relating to the
                  Borrower or the Guarantor under the Thai law or other law or
                  there is any appointment of Official Receiver, administrator,
                  planner, plan administrator or official of similar nature or
                  any administrator of the encumbrancer takes possession of all
                  or part of assets of the Borrower or the Guarantor or there is
                  any judgment or execution order of the similar nature for
                  whatsoever over all or part of the assets of the Borrower or
                  the Guarantor.

         12.1.12  Any law or regulation or order is enacted, promulgated or made
                  or governmental action is taken or proceedings instituted for
                  the winding-up, liquidation, rehabilitation or restructuring
                  of the structure of the Borrower or the Guarantor or for the
                  suspension or revocation of any substantial part of the
                  Borrower's or the Guarantor's operations or for
                  nationalization of the property or assets, seizure,
                  expropriation or suspension of any material part of the assets
                  of the Borrower or the Guarantor or any such person considers
                  it appropriate to restrain the control of the assets of the
                  Borrower or the Guarantor from normal managerial control over
                  all or any substantial part of property or asset of the
                  Borrower or the Guarantor or

         12.1.13  Any situation shall occur which in the opinion of the
                  Creditors or there is reasonable ground to believe that a
                  material adverse change in the operations, assets, debts or
                  status (financial or otherwise) of the Borrower has occurred
                  or there is any justifiable ground to believe that the event
                  may have a material adverse affect to the ability of the
                  Borrower to perform the obligations of the Borrower under this
                  Agreement and the Transaction Documents.

12.2     Subject to the terms and conditions of this Agreement, upon the
         happening of any Event of Default, the Facility Agent or Security Agent
         (as the case may be) shall perform the following acts whether in whole
         or in part at any time after such Event of Default by issuing the
         written notification to the Borrower and the Guarantor without
         prejudice to any other available rights and remedies the Creditors may
         have:

         12.2.1   declare or accelerate all or part of the indebtedness together
                  with the fees, and other money to be paid under this Agreement
                  and or the Transaction Documents to be immediately due and
                  payable without further demand, notice or legal formality of
                  any kind. In such case, the Borrower shall be responsible to
                  pay such Debt including interest to the Creditors.

         12.2.2   declare all part of the Facility terminated where upon the
                  obligation of the Creditors to provide the Facility under this
                  Agreement or Transaction Documents shall immediately
                  terminate.

         12.2.3   Enforce the Security or enforce the rights or remedies as
                  specified in the Transaction Documents.


                                      -48-



12.3     DEFAULT INTEREST

         12.3.1   If the Borrower fails to pay when due any money payable under
                  this Agreement and/or the Transaction Documents on the due
                  date under this Agreement and/or the Transaction Documents,
                  the Borrower must pay (to the extent possible under the laws)
                  the interest for the principal of the Facility which is due
                  and payable by the Borrower to the Creditors from and
                  including the date of default until the date of actual payment
                  (both after and before the judgment) at the Default Interest
                  Rate each Creditor is entitled to collect from loan from the
                  date of default until the Borrower repays such debt in full.

         12.3.2   The Default Interest Rate determined from time to time
                  pursuant to Clause 12.3.1 of this sub-clause will be
                  calculated on the basis of actual number of day elapsed and a
                  year of three hundred sixty five (365) days for the Facilities
                  in Baht and a year of three hundred and sixty (360) days for
                  the Facilities in any other foreign currency other than Baht
                  and shall be payable from time to time upon written demand
                  from the Facility Agent, the Security Agent or the Creditors
                  and the certificate of the Facility Agent or the Security
                  Agent in relation to the interest rate, Interest Period and
                  amount of interest to be paid under this sub-clause will be
                  completed and binding on the Borrower except for manifest
                  error.

12.4     After the declaration pursuant to Clause 12.2.1 by the Facility Agent
         or the Security Agent, if the Creditor receives or obtains the
         principal of the Facility or any amount of money under this Agreement
         whether in whole or in part on the day which is not the Interest
         Payment Date for the principal amount of the Facility or any amount of
         money under this Agreement, the Borrower shall pay the amount certified
         by the Creditors (which is due to be completed and binding on the
         Borrower except for manifest error) as the amount which is necessary to
         compensate the Creditors for the loss or expense whether directly or
         indirectly that the Creditors sustain as the result of the receive of
         such amount on the date which is not an Interest Payment Date
         (including the loss of profit and the loss or expense incurred or may
         incur in liquidation or redeploying funds acquired to make or maintain
         the loan or any part of the loan or the utilization of such money again
         at any one or more rates which is lower than the rate which would have
         been payable by the Borrower under this Agreement) to the Creditors
         upon request.

13.      SECURITY

         The Borrower agrees to provide additional Security as follows as the
         security for the debt of the Borrower under this Agreement and the
         Transaction Documents.

13.1     The Borrower shall pledge all the Equipment for the benefit of the
         Creditors under the Equipment Pledge Agreement, from time to time, as
         soon as practicable for the pledge under the laws or upon request by
         the Security Agent or Creditors by instructing the Security Keeper
         designated by the Facility Agent, the Security Agent and the Creditors
         to control the said Equipment for the benefit of the Creditors and
         after the Borrower has registered the mortgage of Registrable Euipment
         in the name of the Creditors under the conditions of Clause 13.3 such
         Registrable Equipment will be released from the pledge under this
         clause.

13.2     The Borrower shall submit the application to register the ownership of
         the Registrable Equipment of the Borrower to the Equipment Registrar,
         from time to time, as soon as practicable under the laws or upon
         request by the Security Agent or Creditors, but in any case the
         Borrower shall submit the application to register the ownership of the
         first lot of the Registrable Equipment no later than 31 December 2001
         or any other date agreed by the Creditors and after the registration of
         the equipment the Borrower must submit all documents which are the
         evidence of such ownership registration in the equipment which is the
         original to the Security Agent for the safe custody and apart from the
         first lot of the Registrable Equipment, the Borrower agrees to also
         pledge the Registrable Equipment and register the ownership and
         mortgage the Registrable Equipment used to install relating to the
         operation and Project after 31 December 2001.

13.3     The Borrower must register the mortgage of all of the Registrable
         Equipment the ownership of which have already been registered pursuant
         to Clause 13.2, from time to time, under the form and


                                      -49-



         substance satisfactory to the Creditors as a security for the debt
         under this Agreement and the Transaction Documents in which case the
         Borrower shall be responsible to pay for the fees and expenses for such
         mortgage and after the registration of any Equipment the Borrower shall
         deliver all the evidences (which is the original) relating to such
         mortgage to the Security Agent for the benefit of the Creditors,
         provided that before each registration of the mortgage of the
         Registrable Equipment, the Borrower shall obtain all consents,
         licenses, permits or other similar type of documents from any relevant
         governmental authority, agency, organization, board (including the
         Board of Investment) or other person as necessary to mortgage that
         Registrable Equipment.

13.4     In case the Borrower has additional land and/or building for the
         operating of the Project, the Borrower shall mortgage such land and/or
         building to the Creditors in the form and substance satisfactory to the
         Creditors in which case the Borrower shall be responsible to pay for
         the fees and expenses for such mortgage registration and after any
         mortgage registration, the Borrower shall deliver all evidences (which
         is original) relating to such mortgage to the Security Agent for the
         benefit of the Creditors.

13.5     The Borrower shall provide additional Security as requested by the
         Creditors when the Creditors consider that the Security provided by the
         Borrower to the Creditors under this Agreement or the Transaction
         Documents are deteriorated or the value of such Security has been
         diminished.

14.      DISTRIBUTION OF SECURITY

         The Security Agent agrees to perform the following obligations:

         14.1.1   accept and hold the Pool Assets and revenues from the
                  enforcement of the Pool Assets and the claims for insurance
                  for the benefit in accordance with the Proportion of Debt of
                  the Creditors within the safe place and release or distribute
                  the Pool Assets in compliance with the terms of this
                  Agreement.

         14.1.2   arrange for the filing and custody of all correspondences
                  between the Borrower and the Security Agent under this
                  Agreement.

14.1     Each party in this Agreement will inform the other party of any matter
         which may have material affect to the operation of this Agreement or
         the Transaction Documents.

14.2     If any Creditor obtains or acquires any amount of money from the Pool
         Assets (apart from the receipt from Facility Agent or Security Agent
         relating to performance of the duties of the Facility Agent or the
         Security Agent under this Agreement), such Creditor shall inform other
         Creditors and the Security Agent about such receipt of money promptly.

14.3     After the notification under Clause 14.3, the Creditors agree to
         jointly distribute the money received in the following orders:

         14.4.1   firstly, the money will be used to repay the court fees, legal
                  expenses and other expenses incurred for the joint benefit of
                  the enforcement, distribution and/or maintenance of Pool
                  Assets; and

         14.4.2   subsequently, the remaining of such amount will be used to
                  repay the interest on the debt which is outstanding and due
                  but not payable and will be used to repay the debt at that
                  time which is due and payable and which is the debt of each
                  Creditor under this Agreement in Proportion of Debt at that
                  time.

14.5     The provision of this Clause is made for the benefit of the Creditors
         such that initially will be used as security for the due and punctual
         payment of the debt and subsequent as the security for the performance
         of the obligations and all types of Debt which is outstanding from time
         to time of the Borrower.


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14.6     The provision of this Clause will not be deemed to be novation among
         the Borrower and the Creditors or each of the Creditor whether for the
         Debt under any agreement and shall not be interpreted to reduce the
         rights of the Creditors against the Borrower.

14.7     In case any Creditor obtains any benefit from the security which is
         additional benefit in whatsoever nature which is the security for any
         Debt or the whole Debt of the Borrower at any time whether now or in
         the future such benefit under the security will be deemed to be the
         Pool Assets for the joint benefit of the Creditors as if such benefit
         under the security is obtained pursuant to the term of this Agreement
         and in the event of any breach which followed by enforcement of Pool
         Assets, the Security Agent shall obtain and maintain such benefits in
         security for the joint benefit of the Creditors and will distribute all
         the money received from the enforcement of such benefit under the
         security to the Creditors pursuant to Clause 14.4 above.

14.8     Each Creditor agrees that the provision of this Clause shall not have
         any effect to other security or preferential rights, assets or rights
         which any Creditor obtains from any person freely by making a written
         agreement to exempt its from being a Pool Asset from other Creditors.

14.9     If there is any Event of Default, the Creditors shall consult each
         other immediately to agree on the joint cause of actions.

14.10    In the event of Pool Assets being enforced, all the money resulting
         from that enforcement together with any money from the insurance which
         is payable after the proceeding to enforce the Pool Assets will be paid
         to the Security Agent for the benefit of Creditors in accordance with
         their Proportion of Debt. All such proceeds shall be distributed within
         five (5) Banking Days from the date of receipt as follows:

         Firstly,          to be used to repay the fees and expenses incurred in
                           relation to the enforcement of such Pool Assets.

         Secondly,         subject to the provision of Clause 14.4 shall be used
                           to repay the debt which is due and payable to each
                           Creditor in accordance with its Proportion of Debt at
                           that time and

         Thirdly,          to return the balance (if any) to the Borrower.

         Provided that if the money received is not enough to repay the debt in
         full, such money will be used to pay according to the Proportion of
         Debt of each Creditor at the time of the distribution of money without
         any preferential rights or the rights to receive before others among
         the Creditors.

         14.11    In any cases if any Creditors receives the distribution or
                  portion of enforcement of Pool Assets exceeding its Proportion
                  of Debt, such Creditor shall return the exceeding amount to be
                  distributed among the Creditors in accordance with the
                  Proportion of Debt, in order for the debt to be paid in
                  compliance with correct Proportion of Debt.

         14.12    The Facility Agent, the Security Agent and Creditors shall
                  jointly take care of and maintain the rights that each of the
                  Creditors has in the Pool Assets as long as the Borrower is
                  indebted under this Agreement. If any Creditor performs or
                  refrains from performing which results in the rights in the
                  Pool Assets in relation to such Creditor to be diminished
                  without obtaining the consent from other Creditors the
                  proportion that such Creditor shall receive from the
                  enforcement of Pool Assets pursuant to Clause 14.10 shall be
                  reduced by the same amount.

         14.13    The Borrower shall not perform any of following acts except
                  where the Creditors agree in writing


                                      -51-



                  (a)      create any mortgage rights or encumbrances over the
                           Pool Assets whether in whole or in part apart from
                           those specified in this Agreement or the Transaction
                           Documents.

                  (b)      incur debt or binding obligation with any Creditor
                           under this Agreement apart from what have already
                           provided in this Agreement or the Transaction
                           Documents.

                  (c)      repay the debt to any Creditor in this Agreement
                           other than pursuant to the procedures set forth in
                           this Agreement or the Transaction Documents.

         14.14    The parties agree that the Security Agent shall be responsible
                  for the safe keeping of the Agreement, title deeds,
                  certificates of ownership, insurance policies, instruments and
                  documents relating to the Pool Assets, Security and
                  Transaction Documents which must be submitted to the Security
                  Agent under this Agreement for the benefit of the Creditors in
                  the safe place.

15.      INDEMNITY

         Without affecting other provision of this Agreement, the Borrower shall
         indemnify any of the Creditors, promptly upon request from such
         Creditor with reasonable supporting evidences, from and against all
         actions, losses, expenses or liabilities whether directly or indirectly
         including the legal fees, the Creditors or any Creditor have incurred
         or paid as a result of the Borrower not performing its obligation on
         the due date or as a result of the misrepresentation of any facts or as
         a result of any Event of Default (whether such debt is declared to be
         immediately due and payable or not) (including interest or fees which
         is paid or to be paid for the money which is borrowed to support any
         amount which has not been paid).

16.      EXPENSES

16.1     Upon request in writing by the Facility Agent or the Security Agent to
         the Borrower, the Borrower shall pay any reasonable amount as are
         necessary to reimburse the Creditors for all costs, charges, and
         expenses (including without limitation legal fees and expenses and
         other advances in whatsoever nature) incurred by the Creditors in
         negotiation, preparing and execution of this Agreement and/or the
         Transaction Documents and other documents to be made under this
         Agreement and/or the Transaction Documents are arranged for the return
         of any money which is due and payable to the Creditors under this
         Agreement and/or the Transaction Documents or in preserving or
         enforcing or seeking to preserve or enforce any of the rights of the
         Creditors under this Agreement and/or the Transaction Documents to the
         Creditors.

16.2     The Borrower shall pay or cause to be paid all present and future stamp
         and other like duties and taxes in similar nature together with the
         registration fees, recording fees, and other types of fees in the
         similar nature which is payable under this Agreement or the Transaction
         Documents or documents or instruments referred to in this Agreement,
         the Transaction Documents and shall indemnify the Creditors against all
         liabilities, costs, claims and expenses with respect to or resulting
         from any delay in paying such duties, taxes or fees. A certificate as
         to the amount in respect of which the indemnity is so required
         submitted by the Facility Agent or Security Agent shall be conclusive
         and binding on the Borrower (in the absence of manifest error).
16.3     The Borrower shall, upon request from the Security Agent and/or
         Creditors, pay the expenses for the appraisal of the Security and/or
         other assets of the Borrower from time to time to the independent
         appraiser designated by the Security Agent.

17.      NOTICES

17.1     All notices, demands or other communications required to be delivered
         or done under this Agreement or the Transaction Documents shall be sent
         and made in writing and deliver by hand, registered mail, talex, or
         facsimile unless otherwise specified in this Agreement.


                                      -52-



17.2     All notices, demands or other communications to be sent or made to the
         Borrower, the Facility Agent, the Security Agent or Creditor under this
         Agreement or the Transaction Documents shall be sent to such person at
         the following addresses (except the recipient has designated other
         address or telex or facsimile numbers and such notification was made no
         later than five (5) days in advance.)

         To the Borrower:         Innovex (Thailand) Limited
                                          79 Moo 4, Export Industrial Zone 2
                                          Northern Industrial Estate
                                          Baan Klang Sub-district
                                          Muang Lampoon District
                                          Lampoon Province
                                          Thailand
                                          Tel:       (053) 554-700
                                          Fascimile: (053) 554-699

         To the Security Agent:   The Industrial Finance Corporation of Thailand
                                         1770 New Petchburi Road
                                          Bangkapi Sub-district
                                          Huaykwang District
                                          Bangkok 10320
                                          Thailand
                                          Tel:       253-7111, 253-9666 Ext 1711
                                          Fascimile: 251-1029

         To the Facility Agent:           Bank of Ayudhya Public Company Limited
                                          1222 Rama III Road
                                          Bangpongpang, Yannawa
                                          Bangkok 10120
                                          Thailand
                                          Tel:       296-4777, 296-4787
                                          Fascimile: 683-1298, 683-1324

         To the Creditors:        The Industrial Finance Corporation of Thailand
                                          1770 New Petchburi Road
                                          Bangkapi Sub-district
                                          Huaykwang District
                                          Bangkok 10320
                                          Thailand
                                          Tel:       253-7111, 253-9666 Ext 1711
                                          Fascimile: 251-1029

                                          Bank of Ayudhya Public Company Limited
                                          1222 Rama III Road
                                          Bangpongpang, Yannawa
                                          Bangkok 10120
                                          Thailand
                                          Tel:       296-3737, 683-1263
                                          Fascimile: 683-1264

         The address of the Borrower as specified above (or other address
         designated in writing by the Borrower under the terms and conditions of
         this Agreement as the case may be) shall be deemed to be special
         domicile of the Borrower for the communication from the Facility Agent
         or the Creditors and/or other Judicial Authority in relation to this
         Agreement and the Transaction Documents.


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17.3     All notices, demands, and other communications address to the Borrower
         as mentioned above shall be deemed to deliver to the Borrower and the
         Borrower has received such the documents as follows:

         17.3.1   in case of notices, demands or other communications delivered
                  by person (namely by way of messenger) shall be deemed to be
                  delivered and the Borrower has received when such notices,
                  requests, or other communications are delivered to the said
                  address or after five (5) days from the date of delivery if it
                  is a registered mail or

         17.3.2   in case of notices, requests or other communications made by
                  way of telex to be deemed to deliver to the Borrower and the
                  Borrower has received the same when deliver with confirmed
                  answer back to this of delivery, by facsimile to be deemed to
                  be delivered and the Borrower has received the same upon
                  delivery and all notices, demands or other communications made
                  by the Borrower and delivered to the Facility Agent, the
                  Security Agent or Creditors shall be deemed to be delivered
                  when the Facility Agent, the Security Agent or Creditors have
                  actually received such documents at the address specified
                  above or such other address notified by the Facility Agent,
                  Security Agent and Creditors under this sub-clause.

18.      ASSIGNMENT

18.1     This Agreement shall be binding on and inure to the benefit of the
         Borrower, Facility Agent, Security Agent and Creditors and their
         respective successors, assignees and transferees, except that the
         rights of the Borrower under this Agreement and/or Transaction
         Documents are personal to it and cannot be assigned or transferred
         either in whole or in part.

18.2     Subject to the conditions of this Agreement, any Creditor may assign
         its rights and benefits in whole or in part under this Agreement and/or
         Transaction Documents to anyone or more banks, financial institutions,
         asset management companies or entities (in whatever nature) at any
         time.

18.3     All agreements, representations, and warranties made under this
         Agreement and/or the Transaction Documents shall survive any assignment
         made pursuant to this Clause and shall inure to the benefit of the
         assignee.

18.4     Any Creditor may disclose to prospective or actual assignee such
         information about the Borrower as such Creditor may consider
         appropriate.

19.      VOID PROVISION NOT AFFECTING VALID PROVISION
         If at any time any provision of any document is or become illegal,
         invalid or unenforceable in any way, other provision, as the case may
         be, will still be legal, complete and enforceable under the laws and
         shall not be invalidated by the illegality, invalidity or
         unenforcability of the said provision or the document.

20.      AMENDMENT OR WAIVER

         Any amendment of any provision of this Agreement or any waiver of any
         acts or obligation under this Agreement or the Transaction Documents
         except the waiver of the condition precedent which is within the power
         of the Facility Agent for the benefit of the Creditors shall be made
         upon consent of the Majority Creditors.

21.      SET-OFF

         In addition to the rights of the Creditor under this Agreement, upon
         the occurrence of any Event of Default, each Creditor is entitled to
         set-off the debt by using the debt that the Borrower is owing under
         this Agreement to be deducted from the deposit, balance or other
         monetary debt which the Creditor is obligated to pay to the Borrower
         whether such amount is due and payable or not or whether it is the
         deposit that the Borrower deposits jointly with any person. Each
         Creditor is entitled to exercise the set-off under this Agreement by
         not having to send notification, any types of notices to the Borrower
         or any other person and it will be deemed that the Borrower has waived
         the right to


                                      -54-



         receive such notification under this Agreement. After the set-off under
         this Agreement, the Creditors will notify the Borrower about such
         set-off within appropriate time.

         The proceedings under this Clause will be in compliance with the
         conditions of Clause 14 of this Agreement.

22.      GOVERNING LAWS

         This Agreement shall be governed by and interpreted and contrued in
         accordance with the laws of Thailand.

23.      NO WAIVER

         No failure or delay by the Creditors, the Security Agent or the
         Facility Agent (as the case may be) to exercise any rights or remedy
         shall constitute the waiver of such rights or remedy and any partial
         exercise of any rights or remedy shall not be deemed to preclude
         further exercise of such rights or remedy or the utilization of any
         other rights or remedy and the Creditors, Security Agent or Facility
         Agent (as the case may be) may use any of the rights of the Creditors,
         Security Agent or Facility Agent (as the case may be) as if there is no
         such waiver been given.

24.      EFFECTIVE DATE OF THIS AGREEMENT

         This Agreement shall be effective from the Effective Date of this
         Agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the
date specified above.

THE BORROWER:
INNOVEX (THAILAND) LIMITED

- ----------------------------------

THE SECURITY AGENT:
THE INDUSTRIAL FINANCE CORPORATION OF THAILAND

- ----------------------------------

THE FACILITY AGENT:
BANK OF AYUDHYA PUBLIC COMPANY LIMITED

- ----------------------------------

THE CREDITORS:
THE INDUSTRIAL FINANCE CORPORATION OF THAILAND

- ----------------------------------

BANK OF AYUDHYA PUBLIC COMPANY LIMITED

- ----------------------------------


                                      -55-