Exhibit 10.2
EIGHTH AMENDMENT TO CREDIT AGREEMENT
     THIS EIGHTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of
December 30, 2008 and effective as of the Seventh Amendment Effective Date, is
by and among ENTERTAINMENT DISTRIBUTION COMPANY, LLC, a Delaware limited
liability company (the “Borrower”), those Domestic Subsidiaries of the Borrower
identified as a “Guarantor” on the signature pages hereto (individually a
“Guarantor” and collectively the “Guarantors”), the financial institutions party
hereto as lenders (the “Lenders”) and WACHOVIA BANK, NATIONAL ASSOCIATION, as
administrative agent under the Credit Agreement (defined below) (in such
capacity, the “Administrative Agent”).
W I T N E S S E T H
     WHEREAS, the Borrower, the Guarantors, Glenayre Electronics, Inc., a
Colorado corporation, the Lenders and the Administrative Agent are parties to
that certain Credit Agreement dated as of May 31, 2005 (as previously amended,
modified or supplemented and as further amended, modified, supplemented,
restated or amended and restated from time to time, the “Credit Agreement”;
capitalized terms used herein shall have the meanings ascribed thereto in the
Credit Agreement as amended hereby); and
     WHEREAS, the Borrower and the Lenders have agreed to amend the Credit
Agreement on the terms and conditions set forth herein;
     NOW, THEREFORE, in consideration of the agreements hereinafter set forth,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
AMENDMENTS TO CREDIT AGREEMENT
     1.1 Amendment of Section 2.1(j). Section 2.1(j) of the Credit Agreement is
hereby amended by deleting the last sentence of the section and inserting the
following in lieu thereof:
     “The obligations of each Euro Borrower shall be secured solely by the
Collateral pledged by such Euro Borrower and/or the Dutch Holding Company (and
not by any Collateral pledged by any other Credit Party).”
     1.2 Amendment of Section 2.21(b). Section 2.21(b) of the Credit Agreement
is hereby amended by deleting the reference therein to “$8,700,000” and
inserting in its place “$5,400,000.”
     1.3 Amendment of Section 2.21(b)(ii). Section 2.21(b)(ii) of the Credit
Agreement is hereby amended by deleting the reference therein to “September” and
inserting in its place “December.”

 

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

 

     1.4 Amendment of Section 2.7(b)(vi). Section 2.7(b)(vi) of the Credit
Agreement is hereby amended and restated in its entirety as follows:
     Section 2.7(b)(vi) Application of Mandatory Prepayments. All amounts
required to be paid pursuant to this Section 2.7(b) shall be applied as follows:
(A) with respect to all amounts prepaid pursuant to Sections 2.7(b)(ii) through
(iv), to the Term Loan (on a pro rata basis across the remaining amortization
payments set forth in Section 2.2(b)) provided, however, that any payment made
in connection with the purchase by Sony of any equipment from Borrower after the
payment required under Section 2.2(b) hereof to be made on the date of the
Closing under the Sony Sale Agreement, shall be applied as follows: (i) the
first $1,000,000 to the Term Loan (on a pro rata basis across the remaining
amortization payments set forth in Section 2.2(b)), and (ii) any funds above
$1,000,000 to the collateral account designated a Money Market Account as
provided in Section 2.21(b) hereof; and (B) with respect to all amounts prepaid
pursuant to Section 2.7(b)(v), with respect to each Excess Cash Flow prepayment
for the twelve-month period ended December 31, 2008, and each Excess Cash Flow
prepayment to be made thereafter (w) first, 50% of such amount to be applied to
the amortization payment due hereunder pursuant to Section 2.2(b) on
December 31, 2009, and (x) second, 50% of such amount to be applied to the
remaining amortization payments due hereunder pursuant to Section 2.2(b)
thereafter on a pro rata basis until the Term Loan is paid in full. Within the
parameters of the applications set forth above, prepayments shall be applied
first to Alternate Base Rate Loans and then to LIBOR Rate Loans in direct order
of Interest Period maturities. Each Lender shall receive its pro rata share of
any such prepayment based on its Term Loan Commitment Percentage. All
prepayments under this Section 2.7(b) shall be subject to Section 2.17 and be
accompanied by interest on the principal amount prepaid through the date of
prepayment.
     1.5 New Section 7.1(m). A new Section 7.1(m) is hereby added to the Credit
Agreement immediately following Section 7.1(l) thereof as follows:
     Section 7.1(m) Change of Control. The failure of the Borrower to own,
directly or indirectly, two-thirds or more of the then outstanding Voting Stock
of the Dutch Holing Company;
     1.6 New Section 7.1(n). A new Section 7.1(n) is hereby added to the Credit
Agreement immediately following Section 7.1(m) thereof as follows:
     Section 7.1(n) Sony Enforcement Action. Sony or any Affiliate thereof takes
any action which constitutes an Enforcement Action (as defined in the Sony
Subordination Agreement) except as specifically permitted in Section 2.7(b) of
the Sony Subordination Agreement, and any such Enforcement Action shall not have
been terminated or rescinded within 30 days of its occurrence.
ARTICLE II
CONDITIONS TO EFFECTIVENESS
     2.1 Effective Date.

2

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

 

     The matters set forth in Article I of this Amendment shall become effective
upon the Seventh Amendment Effective Date.
ARTICLE III
MISCELLANEOUS
     3.1 Amended Terms.
     (a) Amended Terms. All references to the Credit Agreement in each of the
Credit Documents shall hereafter mean the Credit Agreement as amended by this
Amendment. Except as specifically amended hereby or otherwise agreed, the Credit
Agreement is hereby ratified and confirmed and shall remain in full force and
effect according to its terms.
     3.2 Representations and Warranties of Credit Parties. Each of the Credit
Parties represents and warrants as follows as of the date hereof:
     (a) It has taken all necessary action to authorize the execution, delivery
and performance of this Amendment.
     (b) This Amendment has been duly executed and delivered by such Person and
constitutes such Person’s valid and legally binding obligations, enforceable in
accordance with its terms, except as such enforceability may be subject to
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors’ rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
     (c) No consent, approval, authorization or order of, or filing,
registration or qualification with, any Governmental Authority or third party is
required in connection with the execution, delivery or performance by such
Person of this Amendment or the transaction contemplated herein.
     (d) The representations and warranties set forth in Article III of the
Credit Agreement are true and correct in all material respects as of the date
hereof (except for those which expressly relate to an earlier date).
     3.3 Acknowledgment of Guarantors and Parent. The Guarantors and Parent
acknowledge and consent to all of the terms and conditions of this Amendment and
agree that this Amendment and all documents executed in connection herewith do
not operate to reduce or discharge the Guarantors’ and Parent’s obligations
under the Credit Documents.
     3.4 Credit Document. This Amendment shall constitute a Credit Document
under the terms of the Credit Agreement.
     3.5 Entirety. This Amendment and the other Credit Documents embody the
entire agreement between the parties hereto and supersede all prior agreements
and understandings, oral or written, if any, relating to the subject matter
hereof.

3

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

 

     3.6 Counterparts; Telecopy. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall constitute one and the same instrument. Delivery of an
executed counterpart to this Amendment by telecopy shall be effective as an
original and shall constitute a representation that an original will be
delivered.
     3.7 GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
     3.8 Consent to Jurisdiction; Service of Process; Waiver of Jury Trial. The
jurisdiction, services of process and waiver of jury trial provisions set forth
in Sections 9.14 and 9.17 of the Credit Agreement are hereby incorporated by
reference, mutatis mutandis.
     3.9 Fees. The Borrower agrees to pay all fees and expenses of the
Administrative Agent and the Lenders in connection with the preparation,
execution and delivery of this Amendment, the restructuring of the Loans as
contemplated thereby, and in connection therewith, due diligence concerning the
Credit Parties and the Collateral, including, without limitation, the fees and
expenses of Reed Smith LLP and King & Spalding LLP.
     3.10 Release. The Credit Parties hereby release and forever discharge
Administrative Agent, the Lenders and their agents, employees, attorneys,
professionals, and representatives from any and all claims, counterclaims,
liabilities, and causes of action existing on the date of execution of this
Amendment and effective as of the Seventh Amendment Effective Date
(collectively, the “Claims”) of every nature and description, whether known or
unknown, suspected or unsuspected, foreseen or unforeseen, actual or potential,
and whether arising at law or in equity, under the common law, state law,
federal law, or any other law, in connection with the Credit Agreement or any
other Credit Document, or arising out of or relating to Administrative Agent’s
or any Lender’s administration of or conduct in connection with the Credit
Agreement or another Credit Document, or otherwise, it being the Credit Parties’
intention to effect a general release of all such Claims.
[remainder of page intentionally left blank]

4

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

 

     IN WITNESS WHEREOF the Borrower, the Guarantors, the Parent, the Lenders,
and the Administrative Agent have caused this Amendment to be duly executed on
the date first above written.

              BORROWER:   ENTERTAINMENT DISTRIBUTION COMPANY,         LLC, a
Delaware limited liability company    
 
           
 
  By:   /s/ Thomas Costabile    
 
           
 
  Name:   Thomas Costabile
   
 
  Title:   President & COO    
 
            GUARANTORS:   ENTERTAINMENT DISTRIBUTION COMPANY (USA),
LLC, a Delaware limited liability company    
 
           
 
  By:   /s/ Thomas Costabile    
 
           
 
  Name:   Thomas Costabile
   
 
  Title:   President & COO    
 
            PARENT:   GLENAYRE ELECTRONICS, INC., a Colorado corporation    
 
           
 
  By:   /s/ Matt Behrent    
 
           
 
  Name:   Matt Behrent    
 
  Title:   EVP Corporate Development    

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

 

             
ADMINISTRATIVE AGENT AND LENDERS:
  WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent and as a Lender    
 
           
 
  By:   /s/ Elaine Eaton    
 
           
 
  Name:   Elaine Eaton
   
 
  Title:   Senior Vice President    
 
                Euro Revolving Commitment Percentage:      100%
        Euro Revolving Committed Amount:      2 million Euros    
 
                ING CAPITAL LLC, as a Lender    
 
           
 
  By:   /s/ Andrew C. Sepe    
 
           
 
  Name:   Andrew C. Sepe
   
 
  Title:   Vice President