ex10-2.htm


    
      

    

    Exhibit 10.2

    
      


      
        
          EXECUTION

          


          SEVENTH
AMENDMENT TO CREDIT AGREEMENT

          


          THIS SEVENTH AMENDMENT TO CREDIT
AGREEMENT (this “Amendment”), dated as
of October 31, 2008, 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
to Section 1.1.  Section 1.1 of
the Credit Agreement is hereby amended as follows:

           

          
                (a)    Each
of the following defined terms is hereby amended and restated in its entirety as
follows:

          

          

                “Commitment” shall
mean the Euro Revolving Commitment and the Term Loan Commitment, individually or
collectively, as appropriate.

          

          
            
            

          

          


          
            
            

          

          
                “Commitment” shall
mean the Euro Revolving Commitment and the Term Loan Commitment, individually or
collectively, as appropriate.

          

          
             

          

          “Commitment
Percentage” shall mean the Euro Revolving CommitmentPercentage and/or the
Term Loan Commitment Percentage, as appropriate.

          


          
            
               

            

            
               

              
                

              

            

            
               

            

             

          

          “Commitment Period”
shall mean the period from and including theClosing Date to but not including
the Euro Revolving Commitment TerminationDate.

          
             

                “Consolidated EBITDA”
shall mean, for any period, the sum of (a) Consolidated Net Income for such
period, plus
(b) an amount which, in the determination of Consolidated Net Income for such
period, has been deducted for (i) Consolidated Interest Expense, (ii) total
federal, state, local and foreign income taxes and (iii) depreciation and
amortization expense, all as determined in accordance with GAAP (except for the
exclusion of Rebate Payments).  Notwithstanding the foregoing, (i) for
the fiscal quarter ended September 30, 2008, Consolidated EBITDA shall be
calculated by adding to the number determined pursuant to the foregoing sentence
non-cash charges not exceeding $9,900,000 in the aggregate relating to the
impairment charge taken in 2007 in connection with the Acquisition, to the
extent such non-cash charges were deducted in the determination of Consolidated
Net Income for the applicable period, and (ii) for the fiscal quarter ended
December 31, 2008, and each fiscal quarter thereafter, Consolidated EBITDA shall
be calculated by adding to the number determined pursuant to the foregoing
sentence impairment charges, non-cash charges and one-time charges for the Sony
Sale and any charges related to U.S. operations or discontinued operations (but
not including any ongoing overhead from U.S. operations), which charges shall
not exceed $16,000,000 in the aggregate, to the extent such charges were
deducted in the determination of Consolidated Net Income for the applicable
period.

             

                “Credit Party” shall
mean any of the Borrower, the Guarantors and the Euro
Borrowers.



          
            
            

          

          
                “Fixed Charge Coverage
Ratio” shall mean, with respect to the Credit Parties and their
Subsidiaries on a Consolidated basis for the twelve (12) month period ending on
the last day of any fiscal quarter of the Credit Parties, the ratio of (a) the
sum of Consolidated EBITDA for such period plus for the fiscal
quarters ending December 31, 2008, March 31, 2009, June 30, 2009, and September
30, 2009 only, the amount of restricted cash on the balance sheet of
Entertainment Distribution Company GmbH as of the date of determination in an
amount not to exceed $24,000,000, to (b) the sum of Consolidated Interest
Expense for such period plus Scheduled Funded
Debt Payments for such period (excluding for the fiscal quarters ending December
31, 2008, and March 31, 2009 only, the $9,000,000 principal payment due upon the
closing date under the Sony Sale Agreement) plus cash taxes paid
during such period plus Consolidated
Capital Expenditures for such period.

             

            
                  “Loan” shall mean a
Euro Revolving Loan and/or the Term Loan, as appropriate.

            

             

            
              
                 

              

              
                2

                
                  

                

              

              
                 

              

               

                  “Maturity Date” shall
mean (a) with respect to the Term Loan, the TermLoan Maturity Date and (b) with
respect to the Euro Revolving Loans, the EuroRevolving Commitment Termination
Date.

            

          

          


          “Note” or “Notes” shall mean the
Euro Revolving Notes and/or the TermNotes, collectively, separately or
individually, as appropriate.

          


              “Required Lenders”
shall mean, at any time, Lenders holding in the aggregate more than 50% of (i)
the Commitments (and Participation Interests therein) or (ii) if the Commitments
have been terminated, the outstanding Dollar Amount (determined as of the most
recent Revaluation Date) of Loans and Participation Interests; provided, however, (a) that if
any Lender shall be a Defaulting Lender at such time, then there shall be
excluded from the determination of Required Lenders, Obligations (including
Participation Interests) owing to such Defaulting Lender and such Defaulting
Lender’s Commitments, or after termination of the Commitments, the principal
balance of the Obligations owing to such Defaulting Lender and (b) for purposes
of Sections 6.8, 7.2, 8.5 and 10.8 and clauses (ix) and (x) and the last
paragraph of Section 9.1, if there are fewer than three (3) Lenders
(including any Defaulting Lender), Required Lenders shall mean all Lenders
(other than any Defaulting Lender).

           

          
                “Revaluation Date”
shall mean: (a) each date that a new Loan is made; (b) each date an existing
Loan is extended, converted or continued; (c) the date of any reduction of
the Aggregate Euro Revolving Committed Amount pursuant to the terms of
Section 2.6; and (d) such additional dates as the Administrative Agent
or the Required Lenders shall reasonably determine.

          

           

          
                “Security Documents”
means  (i) the Security Agreement, (ii) the Pledge Agreement, (iii)
the Intermediate Parent Pledge Agreement, (iv) the Foreign Collateral Documents,
(v) the Mortgage Instruments, (vi) any Cash Collateral Account Agreement(s),
(vii) the Assignment of Tax Refunds, (viii) the Collateral Assignment of the
Sony Sale Agreement, (ix) the GER Security Documents, (x) the UK Security
Documents, and (xi) such other documents executed and/or delivered in connection
with the attachment and perfection of the Administrative Agent’s security
interests and liens arising thereunder, including, without limitation, UCC
financing statements and any collateral documentation (in addition to the Pledge
Agreement) with respect to the pledge of (i) 65% of the Capital Stock of
any  Foreign Subsidiary by a U.S. entity, and (ii) 100% of the Capital
Stock of any Foreign Subsidiary by a non-U.S. entity.

             

                (b)       The
following defined terms are hereby added to the Credit Agreement in appropriate
alphabetical order:


                “Aggregate Euro Revolving
Committed Amount” means 2 million Euros, as such aggregate maximum amount
may be reduced from time to time as provided in Section 2.7.

          

          
            
            

          

          


          
            
               

            

            
              3

              
                

              

            

            
               

            

          

          
            
            

          

          


          
                “Clean-up Period”
means, for any Clean-up Year, a period of any 30 consecutive days during such
Clean-up Year.



          
            
            

          

              “Clean-up Year” means
a period of twelve consecutive calendar months, beginning on the Seventh
Amendment Effective Date and on each anniversary thereof.

           

              “Euro Borrower” and
“Euro
Borrowers” means each of Entertainment Distribution Company GmbH, a
German company, and EDC Blackburn Limited, a UK company, collectively,
separately or individually, as appropriate.

        

        
           

              “Euro Borrower
Joinder” means a Joinder to this Agreement executed by each of the Euro
Borrowers.

          


          
            
            

          

          
                “Euro Revolving
Commitment” shall mean, with respect to each Lender, the commitment of
such Lender to make Euro Revolving Loans in an aggregate principal amount at any
time outstanding up to such Lender’s Euro Revolving Committed
Amount.

          

          
             

          

          
            
            

          

          
                “Euro Revolving Commitment
Percentage” shall mean, for each Lender, the percentage identified as its
Euro Revolving Commitment Percentage on its signature page to the Seventh
Amendment, as such percentage may be modified in connection with any assignment
made in accordance with the provisions of Section 9.6(c).

          

           

          
            
            

          

          
                “Euro Revolving Commitment
Period” shall mean the period from and including the Seventh Amendment
Effective Date to but not including the Euro Revolving Commitment Termination
Date.

          

          
            
            

          

          


          
            
            

          

          
                “Euro Revolving Commitment
Termination Date” shall mean June 10, 2010.

             

          

          
                “Euro Revolving Committed
Amount” shall mean the amount of each Lender’s Euro Revolving Commitment
identified on its signature page to the Seventh Amendment, as such amount may be
reduced from time to time in accordance with the provisions hereof.

             

          

          
                “Euro Revolving
Lender” shall mean each Lender with a Euro Revolving
Commitment.

          

           

          “Euro Revolving Loans”
shall have the meaning set forth in Section 2.1.

           

          
                “Euro Revolving Note”
or “Euro Revolving
Notes” shall mean the promissory notes of the Euro Borrowers in favor of
each of the Euro Revolving Lenders evidencing the Euro Revolving Loans provided
pursuant to Section 2.1(e), individually or collectively, as appropriate, as
such promissory notes may be amended, restated, modified, supplemented,
extended, renewed or replaced from time to time.

             

            
              
                 

              

              
                4

                
                  

                

              

              
                 

              

            

          

          
            
            

          

          


          
                “GER Guaranty” means a
Guaranty Agreement executed by Entertainment Distribution Holding GmbH, a German
company, with respect to the obligations of Entertainment Distribution Company
GmbH under this Agreement.

          

           

              “GER Security
Documents” shall mean such documents required by the Administrative Agent
to be executed and/or delivered in connection with the attachment and perfection
of the Administrative Agent’s security interests and liens (i) on the assets of
Entertainment Distribution Company GmbH, and (ii) relating to the pledge of the
Capital Stock of Entertainment Distribution Company GmbH and Entertainment
Distribution Holding GmbH.

          


              “Holdback Amount” means the amount of
“Additional Purchase Price” as such term is defined in the Sony Sale Agreement
(which amount shall not exceed $2,000,000), as has been earned by the Borrower
pursuant to Section 3.3 of the Sony Sale Agreement and held by
Sony.

          


              “North Carolina
Mortgage” shall mean a Mortgage Instrument executed by the Borrower in
favor of the Administrative Agent with respect to the North Carolina Property,
and if required, as amended consistent with the Seventh Amendment.

           

              “North Carolina
Property” shall mean that certain real property and improvements owned by
the Borrower and situated at 700 South Battleground Ave., Hwy. 29, Grover,
Cleveland County, North Carolina and consisting of approximately 100
acres.

          


              “Seventh Amendment”
shall mean that certain Seventh Amendment to Credit Agreement dated as of
October 31, 2008, by and among the Borrower, the Guarantors, the Parent, the
Administrative Agent and the Lenders.

           

              “Sony” means Sony DADC
US Inc.

          


              “Sony Sale” shall mean
the sale by the Borrower of the Sony Sale Assets to Sony for a purchase price in
an amount not less than $25,000,000 pursuant to the Sony Sale
Agreement.

          


              “Sony Sale Agreement”
shall mean the Asset Purchase Agreement dated October 31, 2008, by and among the
Borrower, the Guarantor and Sony, as in effect on the date of the Seventh
Amendment.

          


              “Sony Sale Assets”
shall mean the assets of the Credit Parties listed on  Schedule 1.1(S)(1) to
the Credit Agreement.

          


          
            
               

            

            
              5

              
                

              

            

            
               

            

             

          

              “Sony Subordination
Agreement” shall mean the Subordination Agreement among the Borrower, the
Guarantor, the Administrative Agent and Sony in the form attached hereto as
Schedule
1.1(S)(2).

          


              “UK Guaranty” means a
Guaranty Agreement executed by EDC UK Holdings Limited, a UK company, and
Glenayre Electronics (UK) Limited, a UK company, with respect to the obligations
of EDC Blackburn Limited under this Agreement.

          


              “UK Security
Documents” shall mean shall mean such documents required by the
Administrative Agent to be executed and/or delivered in connection with the
attachment and perfection of the Administrative Agent’s security interests and
liens (i) on the assets of EDC Blackburn Limited, and (ii) relating to the
pledge of the Capital Stock of EDC Blackburn Limited, EDC UK Holdings Limited
and Glenayre Electronics (UK) Limited.

          


          (c)        The
following defined terms are hereby deleted from the Credit Agreement, along with
all references to such terms in the Credit Agreement and the other Credit
Documents:

          


          
            	
                     
      

                  	
                    “Aggregate
      Revolving Committed Amount”

                  


          

          
            	
                     
      

                  	
                    “Commitment
      Fee”

                  


          

          
            	
                     
      

                  	
                    “Issuing
      Lender”

                  


          

          
            	
                     
      

                  	
                    “Issuing
      Lender Fees”

                  


          

          
            	
                     
      

                  	
                    “Letter
      of Credit Fee”

                  


          

          
            	
                     
      

                  	
                    “Letters
      of Credit”

                  


          

          
            	
                     
      

                  	
                    “LOC
      Commitment”

                  


          

          
            	
                     
      

                  	
                    “LOC
      Commitment Percentage”

                  


          

          
            	
                     
      

                  	
                    “LOC
      Committed Amount”

                  


          

          
            	
                     
      

                  	
                    “LOC
      Documents”

                  


          

          
            	
                     
      

                  	
                    “LOC
      Obligations”

                  


          

          
            	
                     
      

                  	
                    “Revolving
      Commitment”

                  


          

          
            	
                     
      

                  	
                    “Revolving
      Commitment Percentage”

                  


          

          
            	
                     
      

                  	
                    “Revolving
      Commitment Termination Date”

                  


          

          
            	
                     
      

                  	
                    “Revolving
      Committed Amount”

                  


          

          
            	
                     
      

                  	
                    “Revolving
      Lender”

                  


          

          
            	
                     
      

                  	
                    “Revolving
      Loans”

                  


          

          
            	
                     
      

                  	
                    “Revolving
      Note”

                  


          

          
            	
                     
      

                  	
                    “Swingline
      Commitment”

                  


          

          
            	
                     
      

                  	
                    “Swingline
      Committed Amount”

                  


          

          
            	
                     
      

                  	
                    “Swingline
      Lender”

                  


          

          
            	
                     
      

                  	
                    “Swingline
      Loan”

                  


          

          
            	
                     
      

                  	
                    “Swingline
      Note”

                  


          

           

          
            
               

            

            
              6

              
                

              

            

            
               

            

             

          

          1.2           Amendment
to Section 2.1.  Section 2.1 of
the Credit Agreement is hereby amended and restated in its entirety as
follows:

          


           

          Section 2.1    Euro Revolving
Loans.

           

          


          (a)           Euro Revolving
Commitment.  During the Commitment Period but not during any
Clean-Up Period, subject to the terms and conditions hereof, each Euro Revolving
Lender severally, but not jointly, agrees to make revolving credit loans in
Euros (“Euro Revolving
Loans”) to any Euro Borrower from time to time in an aggregate principal
amount of up to the Aggregate Euro Revolving Committed Amount for the purposes
hereinafter set forth; provided, however, that (i)
with regard to each Euro Revolving Lender individually, the sum of such Euro
Revolving Lender’s Revolving Commitment Percentage of outstanding Euro Revolving
Loans shall not exceed such Lender’s Euro Revolving Committed Amount and (ii)
with regard to the Euro Revolving Lenders collectively, the sum of the
outstanding Euro Revolving Loans shall not exceed the Aggregate Euro Revolving
Committed Amount.  Euro Revolving Loans shall consist of LIBOR Rate
Loans, and may be repaid and reborrowed in accordance with the provisions
hereof.  LIBOR Rate Loans shall be made by each Euro Revolving Lender
at its LIBOR Lending Office.

          


          (b)           Euro Revolving Loan
Borrowings.

          


          (i)    Notice of
Borrowing.  A Euro Borrower shall request a Euro Revolving Loan
borrowing by written notice (or telephone notice promptly confirmed in writing
which confirmation may be by fax) to the Administrative Agent not later than
10:00 A.M. (Charlotte, North Carolina time) on the third Business Day prior to
the date of the requested borrowing.  Each such request for borrowing
shall be irrevocable and shall specify (A) that a Euro Revolving Loan is
requested, (B) the date of the requested borrowing (which shall be a Business
Day), (C) the aggregate principal amount to be borrowed, and (D) the Interest
Period(s) therefor.  A form of Notice of Borrowing (a “Notice of Borrowing”)
is attached as Schedule
2.1(b)(i).  If the Borrower shall fail to specify in any such
Notice of Borrowing an applicable Interest Period, then such notice shall be
deemed to be a request for an Interest Period of one month.  The
Administrative Agent shall give notice to each Euro Revolving Lender promptly
upon receipt of each Notice of Borrowing, the contents thereof and each such
Euro Revolving Lender’s share thereof.

          


          (ii)    Minimum
Amounts.  Each Euro Revolving Loan shall be in a minimum
aggregate amount of 250,000 Euros and in integral multiples of 100,000 Euros in
excess thereof.

          


          
            
               

            

            
              7

              
                

              

            

            
               

            

             

          

          (iii)    Advances.  Each
Euro Revolving Lender will make its Euro Revolving Commitment Percentage of each
Euro Revolving Loan borrowing available to the Administrative Agent for the
account of the requesting Euro Borrower at the office of the Administrative
Agent specified in Section 9.2, or at such other office as the Administrative
Agent may designate in writing, by 2:00 P.M. (Charlotte, North Carolina time) on
the date specified in the applicable Notice of Borrowing in Euros and in funds
immediately available to the Administrative Agent.  Such borrowing
will then be made available to the requesting Euro Borrower by the
Administrative Agent by crediting the account of such Euro Borrower on the books
of such office with the aggregate of the amounts made available to the
Administrative Agent by the Euro Revolving Lenders and in like funds as received
by the Administrative Agent.

          


          (c)           Repayment.  The
principal amount of all Euro Revolving Loans shall be due and payable in full on
the Euro Revolving Commitment Termination Date, unless accelerated sooner
pursuant to Section 7.2.

           

          (d)   Interest.  Subject to
the provisions of Section 2.9, Euro Revolving Loans shall bear interest at a per
annum rate equal to the sum of the LIBOR Rate plus
3.50%.

          
            
            

          

          


          Interest
on Euro Revolving Loans shall be payable in arrears on each Interest Payment
Date.

          


          (e)           Euro Revolving
Notes.  Each Euro Revolving Lender’s Euro Revolving Committed
Amount shall be evidenced by a duly executed promissory note of the Euro
Borrowers to such Euro Revolving Lender requesting a promissory note in
substantially the form of Schedule
2.1(e).

           

          
            (f)           Clean-Up
Period.  The
Euro Borrowers shall, on the first day of each Clean-up Period, prepay in full
all Euro Revolving Loans outstanding on such day.  On each subsequent
day of each Clean-up Period, the Euro Borrowers shall prepay in full all Euro
Revolving Loans, if any, outstanding on such day.


            
              (g)          Mandatory
Prepayment.  If
the Administrative Agent notifies the Euro Borrowers at any time that the total
outstanding Euro Revolving Loans at such time exceeds the Dollar Amount equal to
$2,500,000, then, immediately after receipt of such notice, the Euro Borrowers
shall prepay Euro Revolving Loans in an aggregate amount sufficient to reduce
such total outstanding Euro Revolving Loans as of such date of payment to the Dollar Amount
equal to $2,500,000.

            

          

          
            


            (h)          Repayment.  All
payments by the Euro Borrowers hereunder with respect to principal and interest
on Euro Revolving Loans shall be made to the Administrative Agent, for the
account of the respective Lenders to which such payment is owed, at the
applicable Administrative Agent’s Office in Euros and in immediately available
funds not later than  10:00 A.M. (Charlotte, North Carolina time) on
the dates specified herein. Without limiting the generality of the foregoing,
the Administrative Agent may require that any payments due under this Agreement
be made in the United States.  If, for any reason, any Euro Borrower
is prohibited by any Law from making any required payment hereunder in Euros,
such Euro Borrower shall make such payment in Dollars in the Dollar Amount of
the Euro payment amount.

             

            
              
                 

              

              
                8

                
                  

                

              

              
                 

              

               

            

            
              (i)           Use of
Proceeds.  The
proceeds of the Euro Revolving Loans shall be used by the Euro Borrowers for
working capital purposes of the Euro Borrowers and for no other purpose
(including without limitation to repay
debt).

               

              
                (j)          Obligations; Collateral
Therefor.  Notwithstanding
anything to the contrary contained in this Agreement or any other Credit
Document, the obligations of the Euro Borrowers under this Agreement and all
other Credit Documents are limited solely to the Euro Revolving Loans and, with
respect to such Euro Revolving Loans, the obligations of the Euro Borrowers are
several and not joint, such that each Euro Borrower is obligated solely to repay
the Euro Revolving Loans made to it (and not any Euro Revolving Loans made to
any other Euro Borrower).  The obligations of each Euro Borrower shall
be secured solely by the Collateral pledged by such Euro Borrower (and not by
any Collateral pledged by any other Credit
Party)

                
                   

                  
                    (k)         Provisions
Applicable.  Except
as expressly provided herein, the provisions set forth in this Agreement that
refer and apply to Revolving Commitments, Revolving Loans, Revolving Lenders and
words of similar import shall be deemed to refer and apply to the Euro Revolving
Commitments, the Euro Revolving Loans, and the Euro Revolving Lenders,
respectively.

                  

                

              

            

          

          
            
            

          

          


          1.3           Amendment
to Section 2.2(b).  Section 2.2(b) of
the Credit Agreement is hereby amended and restated in its entirety as
follows:

          


          Section
2.2(b)                   Repayment of Term
Loan.  The principal amount of the Term Loan shall be repaid in
four (4) installments as follows:

          


          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  	
                                                          Principal
      Amortization

                                                          Payment
      Date

                                                        	
                                                          Term
      Loan Principal

                                                          Amortization
      Payment

                                                        
	
                                                          December
      31, 2008

                                                        	
                                                          $9,000,000

                                                        
	
                                                          date
      of Closing under the Sony Sale Agreement

                                                        	
                                                          $9,000,000

                                                        
	
                                                          December
      31, 2009

                                                        	
                                                          $2,000,000

                                                        
	
                                                          June
      30, 2010

                                                        	
                                                          $2,500,000

                                                        
	
                                                          Term
      Loan Maturity Date

                                                        	
                                                          $4,500,000

                                                        


                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

          


          1.4           Deletion
of Section 2.3. Section 2.3 of the
Credit Agreement is hereby deleted in its entirety and replaced with the phrase
“Intentionally
Omitted.”

          


          1.5           Deletion
of Section 2.4. Section 2.4 of the
Credit Agreement is hereby deleted in its entirety and replaced with the phrase
“Intentionally
Omitted.”

          


          
            
               

            

            
              9

              
                

              

            

            
               

            

          

           

          1.6           Amendment
of Section 2.5.  Sections 2.5 of the Credit Agreement is hereby
amended and restated in its entirety as follows:

          


           

                                          Section
2.5    Fees.

           

          


          (a)           Commitment
Fee.  In consideration of the Euro Revolving Commitments, the
Euro Borrowers agrees to pay to the Administrative Agent for the ratable benefit
of the Lenders holding Euro Revolving Commitments a commitment fee (the “Euro Commitment Fee”) in
an amount equal to 0.45% per annum on the average daily unused amount of the
Aggregate Euro Revolving Committed Amount.  The Euro Commitment Fee
shall be payable quarterly in arrears on the 15th day
following the last day of each calendar quarter for the prior calendar
quarter.

          


          (b)           Administrative
Fee.  The Borrower agrees to pay to the Administrative Agent
the annual administrative fee as described in the Fee Letter.

          


          1.7           Amendment
of Section 2.7(b)(ii).  Section 2.7(b)(ii) of the Credit
Agreement is hereby amended and restated in its entirety as
follows:

          


          Section
2.7(b)(ii)    Prepayments:  Mandatory:  Asset
Dispositions; Certain Other Events. Promptly following any Asset
Disposition (or related series of Asset Dispositions), the Borrower shall prepay
the Loans in an aggregate amount equal to one hundred percent (100%) of the Net
Cash Proceeds derived from such Asset Disposition (or related series of Asset
Dispositions) (such prepayment to be applied as set forth in clause (vi)
below).

          


          1.8           Amendment
to Section 2.7(b)(v).  Section 2.7(b)(iv) of the Credit
Agreement is hereby amended and restated in its entirety as
follows:

          


          Section
2.7(b)(v)    Excess Cash
Flow.  Within one hundred five (105) days after the end of each
fiscal quarter ending December 31, commencing with the fiscal quarter ending
December 31, 2008, the Borrower shall prepay the Loans in an amount equal to 50%
of the Excess Cash Flow earned during the twelve-month period then ended (such
prepayments to be applied as set forth in clause (vi) below); provided, that if the
Leverage Ratio is less than or equal to 1.00 to 1.00 as of the end of any fiscal
year as demonstrated by the officer’s Compliance Certificate most recently
delivered pursuant to Section 5.2(b), the Borrower shall not be required to
prepay the Loans on account of the Excess Cash Flow earned during such prior
fiscal year.

           

          1.9           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:

          
 

          
            
               

            

            
              10

              
                

              

            

            
               

            

          

           

          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), (1) first, to the Term
Loan (on a pro rata basis across the remaining amortization payments set forth
in Section 2.2(b), and (2) second to outstanding Euro Revolving Loans (with a
corresponding permanent reduction in the Euro Revolving Committed Amount), 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
June 30, 2009, 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) December 31, 2009, (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, and (y) third, to the outstanding Euro Revolving
Loans.  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 Euro
Revolving Commitment Percentage or Term Loan Commitment Percentage, as
applicable. 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.

           

          1.10         Amendment
of Section 2.9.  Section 2.9 of the Credit Agreement is hereby
amended and restated in its entirety as follows:

           

           

          Section 2.9    Default Rate and Payment
Dates.

           

          


          (a)  If all or a portion of
the principal amount of any Loan which is a LIBOR Rate Loan shall not be paid
when due or continued as a LIBOR Rate Loan in accordance with the provisions of
Section 2.10 (whether at the stated maturity, by acceleration or otherwise),
such overdue principal amount of such Loan shall be converted to an Alternate
Base Rate Loan at the end of the Interest Period applicable
thereto.

          


          (b) If all or a portion of the
principal amount of any LIBOR Rate Loan shall not be paid when due, such overdue
amount shall bear interest at a rate per annum which is equal to the rate that
would otherwise be applicable thereto plus 6% until the end
of the Interest Period applicable thereto, and thereafter at a rate per annum
which is equal to the Alternate Base Rate plus the sum of the
Applicable Percentage then in effect for Alternate Base Rate Loans and 6% (the
“ABR Default
Rate”) or (ii) if any interest payable on the principal amount of any
Loan or any fee or other amount, including the principal amount of any Alternate
Base Rate Loan, payable hereunder shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum which is equal to the ABR Default Rate, in each
case from the date of such non-payment until such amount is paid in full (after
as well as before judgment).  Upon the occurrence, and during the
continuance, of any other Event of Default hereunder, at the option of the
Required Lenders, the principal of and, to the extent permitted by law, interest
on the Loans and any other amounts owing hereunder or under the other Credit
Documents shall bear interest, payable on demand, at a per annum rate which is
(A) in the case of principal, the rate that would otherwise be applicable
thereto plus 6%
or (B) in the case of interest, fees or other amounts, the ABR Default Rate
(after as well as before judgment).

          


          
            
               

            

            
              11

              
                

              

            

            
               

            

             

          

          (c) Interest on each Loan shall be
payable in arrears on each Interest Payment Date; provided that interest
accruing pursuant to paragraph (b) of this Section 2.9 shall be payable from
time to time on demand.

          


          1.11           New
Section 2.21 (“Sony Sale Matters”).  A new Section
2.21 is hereby added to the Credit Agreement following Section 2.20 thereof as
follows:

          


          Section 2.21    Sony Sale
Matters.  Notwithstanding anything to the contrary set forth
herein, the Administrative Agent and the Lenders hereby consent to the Sony Sale
and waive the application of Section 6.9 of this Agreement to any limitations on
payment of dividends by Borrower set forth in the “Security Documents” as
defined by the Sony Sale Agreement, subject to the terms and conditions of this
Section 2.21.

          


          (a)           Proceeds.  Notwithstanding
anything to the contrary contained in Section 2.7(b), the Borrower shall make
the following payments in connection with the proceeds of the Sony
Sale:

          


          (i)           Closing
Proceeds.  All proceeds of the Sony Sale paid at the closing
thereof shall be paid directly to the Administrative Agent and applied as
follows :  (1)  $18,000,000 shall be paid by the Borrower to
the Administrative Agent for the benefit of the Lenders as a repayment of the
principal of the Term Loan in accordance with Section 2.2(b) hereof, (2) to the
extent the purchase price of the Sony Sale exceeds $25,000,000, the Borrower
shall pay to the Administrative Agent for the benefit of the Lenders any
proceeds in excess of $25,000,000 as a repayment of the Term Loan on a pro rata
basis across the remaining principal payments set forth in Section 2.2(b) (with
any excess to be applied  in the order specified in Section
2.7(b)(vi)(B) hereof), (3) payment in full of the outstanding Revolving Loans
(with a corresponding reduction in and cancellation of the Revolving
Commitment), and (4) the remainder, together with all cash maintained by the
Borrower at such time (which shall include any cash received from one or more of
the Euro Borrowers which is currently anticipated to be 5 million Euros) shall
be paid by the Borrower to the Administrative Agent, which shall be held and
disbursed in accordance with Section 2.21(b) hereof.

          


          (ii)           Earn-Outs.  Subject
to the terms of the Sony Sale Agreement, any portion of the Holdback Amount that
is not used to satisfy indemnification obligations of the Credit Parties under
the Sony Sale Agreement shall, when otherwise due and payable to the Borrower,
be paid directly to the Administrative Agent for the benefit of the Lenders as a
repayment of the Term Loan on a pro rata basis across the remaining principal
payments set forth in Section 2.2(b) (with any excess to be
applied  in the order specified in Section 2.7(b)(vi)(B)
hereof).  Once annually, commencing on June 30, 2009, the Borrower
shall notify the Administrative Agent of the aggregate amount of indemnification
claims asserted and payments made under the Sony Sale Agreement.

          


          
            
               

            

            
              12

              
                

              

            

            
               

            

             

          

          (b)           Wind-Down
Funds.  On or before the date of closing of the Sony Sale, the
Borrower shall have paid to the Administrative Agent the proceeds specified in
Section 2.21(a) hereof in cash in an aggregate amount not less than $8,700,000
(collectively, the “Wind-Down Funds”),
which shall be deposited into one or more collateral accounts at Wachovia owned
by and titled in the name of the Administrative Agent for the benefit of the
Lenders, each of which shall be subject to a Cash Collateral
Agreement.  The collateral accounts shall consist of a checking
account (the “Checking
Account”) with an initial balance of $250,000 and one or more money
market accounts (each a “Money Market
Account”) which will contain the balance of the Wind-Down Funds less
$250,000.

          


          (i)           Checking
Account.  Absent an Event of Default, the Borrower may use the
funds in the Checking Account for wind-down activities pursuant to the Wind-Down
Budget (as defined below). Commencing on February 10, 2009, and within 10 days
following the end of each month thereafter, the Borrower shall deliver to the
Administrative Agent invoices evidencing the amounts spent by the Borrower from
the Checking Account on wind-down activities for the prior month, together with
identification of the line item or items and categories of such costs in the
Wind-Down Budget.  Within 2 Business Days following the Administrative
Agent’s receipt of such invoices and line item and category information
sufficient to support the prior month’s expenditures from the Checking Account,
the Administrative Agent shall cause funds to be transferred from a Money Market
Account to the Checking Account such that the balance in the Checking Account is
$250,000; provided that if an Event of
Default exists and is continuing, the Administrative Agent shall not be
obligated to transfer funds to the Checking Account.

          


          (ii)           Money Market
Accounts.  From time to time, but in no event more than six (6)
times per month with respect to each Money Market Account, the Borrower may
submit to the Administrative Agent requests for disbursements of the Wind-Down
Funds, together with (i) the invoices evidencing such amounts for which
disbursement is requested and (ii) identification of the line item or items and
category where such costs are included in that certain Wind-Down Budget dated
September, 2008 (the “Wind-Down
Budget”).  Upon receipt of such request and supporting
invoices, the Administrative Agent shall, within 2 Business Days
following receipt of such request and supporting invoices, disburse such
portions of the Wind-Down Funds from such Money Market Accounts to the Borrower
for such wind-down activities; provided that (1) upon the
completion of all wind-down activities in a certain category of the Budget, (a)
half of all Wind-Down Funds allocated to such category in the Budget and not
disbursed, shall be used to repay the Term Loan on a pro rata basis across the
remaining principal payments set forth in Section 2.2(b)(with any excess to be
applied  in the order specified in Section 2.7(b)(vi)(B) hereof), and
(b) the remaining half of such Wind-Down Funds allocated to such category and
not disbursed shall remain Wind-Down Funds subject to the provisions of this
Agreement, and (2) if an Event of Default exists and is continuing, the
Administrative Agent shall not be obligated to disbursement the Wind-Down
Funds.

          


          (c)           Fees.  The
Borrower shall pay to the Administrative Agent for the ratable benefit of the
Lenders holding the Term Loan the following fees on the following dates: (1) if
the Borrower has not sold the North Carolina Property on or before December 31,
2009, and the proceeds of such sale have not been used to repay the Term Loan on
or before such date, the Borrower shall pay to the Administrative Agent for the
benefit of the Lenders holding the Term Loan a fee in the amount of $100,000 on
December 31, 2009, and (2) if the Term Loan has not been paid in full prior to
December 31, 2010, the Borrower shall pay to the Administrative Agent for the
benefit of the Lenders holding the Term Loan a fee in the amount of $300,000 on
December 31, 2010; provided that if any portion
of the principal payment of the Term Loan due on December 31, 2010, has been
paid prior to such date, the $300,000 fee will be prorated so as not to apply to
such portion as has already been repaid.

          


          
            
               

            

            
              13

              
                

              

            

            
               

            

          

           

          1.12         Amendment
of Section 5.9.  Section 5.9 of
the Credit Agreement is hereby amended and restated in its entirety as
follows:

           

          Section 5.9    Financial
Covenants.

          
            
            

          

           

          (a)           Leverage
Ratio.  The
Leverage Ratio, as of the last day of each fiscal quarter of the Credit Parties,
beginning with the fiscal quarter ending December 31, 2008, shall be less than
or equal to 2.00 to 1.00.

           

          
            (b)          Fixed Charge Coverage
Ratio.  The
Fixed Charge Coverage Ratio, as of the last day of each fiscal quarter of the
Credit Parties, beginning with the fiscal quarter ending December 31, 2008,
shall be greater than or equal to (i) 1.00 to 1.00 for the fiscal quarter ending
December 31, 2008, and (ii) 1.25 to 1.00 for the fiscal quarter ending March 31,
2009, and each fiscal quarter thereafter.

            

              (c)           Consolidated Capital
Expenditures.  Consolidated Capital Expenditures as of the end
of each 12-month period, beginning with the 12-month period ending December 31,
2008, shall be less than or equal to $5,000,000.

               

            

          

           

          1.13         Amendment
of Section 7.1(a).  Section 7.1(a) of the Credit Agreement is
hereby amended and restated in its entirety as follows:

           

           

          Section
7.1(a)  Payment
Default.  Any Credit Party shall fail to pay any principal on
any Loan when due in accordance with the terms of the Credit Documents; or any
Credit Party shall fail to pay any interest on any Loan or any fee or other
amount payable under the Credit Documents when due in accordance with the terms
thereof or hereof and such failure shall continue unremedied for three (3)
Business Days; or

           

          1.14         Amendment
of Section 7.1(c).  Section 7.1(c) of
the Credit Agreement is hereby amended and restated in its entirety as
follows:

          


          Section 7.1(c)  Covenant
Default.  (i) Any Credit Party shall fail to perform, comply
with or observe any term, covenant or agreement applicable to it contained in
Sections 5.1, 5.2, 5.4, 5.7, 5.9, 5.11, 5.13 or Article VI hereof; or (ii) any
Credit Party shall fail to comply with any other covenant contained in this
Credit Agreement or the other Credit Documents or any other agreement, document
or instrument among any Credit Party, the Administrative Agent and the Lenders
or executed by any Credit Party in favor of the Administrative Agent or the
Lenders (other than as described in Sections 7.1(a) or 7.1(c)(i) above), and
such breach or failure to comply is not cured within thirty (30) days of its
occurrence; or

          


          
            
               

            

            
              14

              
                

              

            

            
               

            

             

          

          1.15         Amendment
of Section 7.1(e).  Section 7.1(e) of
the Credit Agreement is hereby amended and restated in its entirety as
follows:

          


          Section 7.1(e)    Bankruptcy
Default.  (i) The Parent, the Immediate Parent, any Credit
Party or any of their Subsidiaries shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or the Parent, the Immediate
Parent, any Credit Party or any of their Subsidiaries shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against any of the Parent, the Immediate Parent, any Credit Party or any of
their Subsidiaries any case, proceeding or other action of a nature referred to
in clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against the
Parent, the Immediate Parent, any Credit Party or any of their Subsidiaries any
case, proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) the Parent, the Immediate Parent,
any Credit Party or any of their Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clauses (i), (ii), or (iii) above; or (v) the
Parent, the Immediate Parent, any Credit Party or any of their Subsidiaries
shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or

          


          1.16         New
Section 7.3.  A new Section 7.3 is hereby
added to the Credit Agreement immediately following Section 7.2 thereof as
follows:

          


                         
Section 7.3    Appointment of
Receiver.  Upon the occurrence of an Event of Default, each of
the Credit Parties agrees and consents to the appointment by a court of
competent jurisdiction of a receiver to manage, operate, sell, and/or liquidate
each of the Credit Parties and any or all of the Credit Parties' businesses and
to do such things and take such actions as the receiver deems necessary with
respect to such Credit Parties and Credit Parties' businesses.

          


          1.17         New
Section 7.4.  A new Section 7.4
is hereby added to the Credit Agreement immediately following Section 7.3
thereof as follows:

          


           

          Section 7.4    Indemnification.

           

          
            
               

            

            
              15

              
                

              

            

            
               

            

          

           

          (i)           If,
after receipt of any transfer or payment of all or any part of any one or all of
the Obligations, the Administrative Agent or any Lender is compelled to
surrender such transfer or payment to any person or entity for any reason
(including, without limitation, a determination that such payment is void or
voidable as a preference or fraudulent conveyance, an impermissible setoff, or a
diversion of trust funds), then this Agreement and the other documents executed
in connection herewith shall continue in full force and effect, and the Credit
Parties shall be liable, jointly and severally, for, and shall indemnify, defend
and hold harmless the Administrative Agent and such Lender with respect to the
full amount so surrendered (subject to Section 2.1(j) hereof).

           

           

          (ii)           The
provisions of this section shall survive the termination of this Agreement and
shall be and remain effective notwithstanding the payment of any or all of the
Obligations to the Administrative Agent and the Lenders, the cancellation of any
of the Credit Documents, the release of any encumbrance securing the Obligations
or any other action which the Administrative Agent or any Lender may have taken
in reliance upon its receipt of such payment.  Any cancellation of any
of the Credit Documents, release of any encumbrance or other such action shall
be deemed to have been conditioned upon any payment of any or all of the
Obligations having become final and irrevocable.

           

          1.18         Amendment
of Section 9.17.   Section 9.17 of
the Credit Agreement is hereby amended and restated in its entirety as
follows:

          


           

          Section
9.17    Forum; Waiver of Jury
Trial.  THE CREDIT PARTIES AGREE THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING IN
NEW YORK COUNTY, NEW YORK, AND CONSENT TO THE NONEXCLUSIVE JURISDICTION OF SUCH
COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE CREDIT PARTIES
BY MAIL AT THE ADDRESS SET FORTH IN THIS AGREEMENT.  THE CREDIT
PARTIES HEREBY WAIVE ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT FORUM.  THE CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND
THE LENDERS MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE
RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS
OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS, (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PART, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF ADMINISTRATIVE AGENT OR
ANY LENDER RELATING TO THE ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE
CREDIT DOCUMENTS, AND AGREE THAT NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH
ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED.  EXCEPT AS PROHIBITED BY LAW, THE CREDIT PARTIES HEREBY WAIVE
ANY RIGHT THEY MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES.  THE CREDIT PARTIES CERTIFY THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE ADMINISTRATIVE AGENT OR ANY LENDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT OR SUCH
LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER.  THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE
ADMINISTRATIVE AGENT AND THE LENDERS TO ACCEPT THIS AGREEMENT AND TO CONTINUE TO
EXTEND CREDIT UNDER THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS.

           

          
            
               

            

            
              16

              
                

              

            

            
               

            

          

           

          1.19         New
Section 9.20 (“Judgment Currency”).   A new Section
9.20 is hereby added to the Credit Agreement following Section 9.19 thereof as
follows:

           

           

          Section
9.20      Judgment
Currency.    If, for
the purposes of obtaining judgment in any court, it is necessary to convert a
sum due hereunder or any other Credit Document in one currency into another
currency, the rate of exchange used shall be that at which in accordance with
normal banking procedures the Administrative Agent could purchase the first
currency with such other currency on the Business Day preceding that on which
final judgment is given.  The obligation of each Euro Borrower in
respect of any such sum due from it to the Administrative Agent or any Lender
hereunder or under the other Credit Documents shall, notwithstanding any
judgment in a currency (the “Judgment Currency”)
other than that in which such sum is denominated in accordance with the
applicable provisions of this Agreement (the “Agreement Currency”),
be discharged only to the extent that on the Business Day following receipt by
the Administrative Agent or such Lender, as the case may be, of any sum adjudged
to be so due in the Judgment Currency, the Administrative Agent or such Lender,
as the case may be, may in accordance with normal banking procedures purchase
the Agreement Currency with the Judgment Currency.  If the amount of
the Agreement Currency so purchased is less than the sum originally due to the
Administrative Agent or any Lender from any Euro Borrower in the Agreement
Currency, such Euro Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent or such
Lender, as the case may be, against such loss.  If the amount of the
Agreement Currency so purchased is greater than the sum originally due to the
Administrative Agent or any Lender in such currency, the Administrative Agent or
such Lender, as the case may be, agrees to return the amount of any excess to
such Euro Borrower (or to any other Person who may be entitled thereto under
applicable law).

          


           

          1.20         Amended
Schedule 5.2(b).
Schedule
5.2(b) (Compliance Certificate) to the Credit Agreement is hereby amended
and restated in its entirety in the form attached to this Amendment as Schedule
5.2(b)-Amended.

           

          
            
               

            

            
              17

              
                

              

            

            
               

            

          

           

          
            ARTICLE
II

          

          CONDITIONS
TO EFFECTIVENESS

          


           

          2.1           Closing
Conditions.

           

          


          The matters set forth in Article I of
this Amendment shall become effective upon the date (the “Seventh Amendment Effective
Date”) upon which the following conditions have been satisfied (in form
and substance reasonably acceptable to the Administrative Agent), which date
shall not be later than March 31, 2009; provided, however, that the
matters set forth in Article III (other than Section 3.1) of this Amendment
shall become effective upon the date of execution and delivery by all parties of
this Amendment:

          


          (a)           Executed Amendment and other
Credit Documents.  The Administrative Agent shall have received
(i) a copy of this Amendment duly executed by each of the Credit Parties, the
Lenders and the Administrative Agent, (ii) for the account of each Lender with a
Euro Revolving Commitment requesting a promissory note, a Euro Revolving Note,
(iii) counterparts of the UK Security Documents and the UK Guaranty, (iv)
counterparts of the GER Security Documents and the GER Guaranty, (v) the Euro
Borrower Joinder, (vi) counterparts of the Dutch Pledge Agreement (and related
items required under the Second Amendment), (vii) the Assignment of Tax Refunds,
(viii) the Collateral Assignment of the Sony Sale Agreement and acknowledgement
thereof from the buyer thereunder, (ix) the Cash Collateral Agreements relating
to the Wind-Down Funds, (x) a stock power and UCC-1 financing statement relating
to the pledge under the Intermediate Parent Pledge Agreement, (xi) the Sony
Subordination Agreement, and (xii) counterparts of any other Credit Document, in
each case conforming to the requirements of this Credit Agreement and executed
by a duly authorized officer of each party thereto, and in each case in form and
substance satisfactory to the Lenders.

           

          
            (b)           Authority
Documents.  The Administrative Agent shall have received the
following:

             

                (i)    Articles of Incorporation/Charter
Documents.  Copies of the articles of incorporation or other
charter documents, as applicable, of each Credit Party certified to be true and
complete as of a recent date by the appropriate Governmental Authority or a
public notary, as applicable, of the state of its
organization.

          

          
             

            
                  (ii)    Resolutions.  Copies
of resolutions of the board of directors or the shareholders, as applicable, of
each Credit Party approving and adopting the Amendment, the transactions
contemplated therein and authorizing execution and delivery thereof, certified
by a secretary or assistant secretary, managing director or other duly
authorized person, as the case may be, of such Credit Party as of the Seventh
Amendment Effective Date to be true and correct and in force and effect as of
such date.

               

              
                
                   

                

                
                  18

                  
                    

                  

                

                
                   

                

                 

              

              
                    (iii)    Bylaws/Operating
Agreement.  To the extent applicable to the Credit Parties, a
copy of the bylaws or comparable operating agreement of each Credit Party
certified by a secretary or assistant secretary, managing director or other duly
authorized person, as the case may be, of such Credit Party as of the Seventh
Amendment Effective Date to be true and correct and in force and effect as of
such date.

              

            

          

          
            
            

          

          
             

                (iv)    Good
Standing.  To the extent applicable to the Credit Parties,
copies of certificates of good standing, existence or its equivalent with
respect to the each Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or country of incorporation or
organization and each other state or country in which the failure to so qualify
and be in good standing could reasonably be expected to have a Material Adverse
Effect on the business or operations of the Credit Parties and their
Subsidiaries in such state.

             

                (v)           Incumbency.  An
incumbency certificate of each Credit Party certified by a secretary or
assistant secretary, managing director or other duly authorized person, as the
case may be, to be true and correct as of the Seventh Amendment Effective
Date.

          

          


          (c)           Legal Opinions of
Counsel.   The Administrative Agent shall have received
opinions of legal counsel (including UK and GER counsel to the extent required
by the Administrative Agent) for the Credit Parties, dated the Seventh Amendment
Effective Date and addressed to the Administrative Agent and the Lenders, in
form and substance reasonably acceptable to the Administrative
Agent.

           

          (d)           Personal Property
Collateral.  The
Administrative Agent shall have received, in form and substance reasonably
satisfactory to the Administrative
Agent:

          
     (i)    searches
of Uniform Commercial Code filings in the jurisdiction of the chief executive
office of each Credit Party, the State of incorporation or organization of each
Credit Party and each jurisdiction where any Collateral is located or where a
filing would need to be made in order to perfect the Administrative Agent’s
security interest in the Collateral, copies of the financing statements on file
in such jurisdictions and evidence that no Liens exist other than Permitted
Liens, and analagous searches under UK and GER law to the extent
applicable;

           

              (ii)    UCC
financing statements for each appropriate jurisdiction as is necessary, in the
Administrative Agent’s reasonable discretion, to perfect the Administrative
Agent’s security interest in the Collateral and such analagous filings as
necessary under UK and GER law; and

           

          
                (iii)    original stock
certificates or other certificates evidencing the Capital Stock pledged pursuant
to the Pledge Agreements, together with an undated stock power for each such
certificate duly executed in blank by the registered owner
thereof.

          


          
            
            

          

          
            


            
              
                 

              

              
                19

                
                  

                

              

              
                 

              

               

            

            (e)           Real Property
Collateral.  The
Administrative Agent shall have received, in form and substance reasonably
satisfactory to the Administrative Agent:


          

          
            
            

          

              (i)    fully
executed and notarized amendments to the Mortgage Instruments, if required by
the Administrative Agent; and

           

              (ii)   a title
report in respect of each of the Mortgaged Properties.

          


          (f)           Insurance. The
Administrative Agent shall have received updated certificates of insurance
evidencing liability and casualty insurance meeting the requirements set forth
in this Agreement or in the Security Documents and business interruption
insurance satisfactory to the Administrative Agent.

          


          (g)           Sony Sale Documents; Sony
Sale.  There shall not have been any material modification,
amendment, supplement or waiver to the Sony Sale Agreement or the other
documents executed in connection therewith without the prior written consent of
the Administrative Agent.  The Sony Sale shall have been, or
simultaneously with the effectiveness of this Agreement shall be, fully
consummated in accordance with the terms of the Sony Sale
Agreement.

          


          (h)           Up-Front
Fee.  The Borrower shall have paid or caused to be paid a
renewal fee to the Administrative Agent for the ratable benefit of the Lenders
holding the Term Loan in connection with this Amendment in an aggregate amount
equal to $50,000.

          


          (i)           Payment of Revolving
Loans.  The Administrative Agent shall have received payment in
full in cash of all outstanding Revolving Loans, at which time the Revolving
Commitments, the Swingline Commitments and the LOC Commitments are
terminated.

          


          (j)           Compliance
Matters.  The Euro Borrowers shall have delivered to the
Administrative Agent such information as is necessary for approval under the
Administrative Agent’s compliance program.

          


          (k)           Other.  The
Administrative Agent shall have received such other documents, agreements or
information which it may reasonably request relating to the Credit Parties and
the transactions contemplated by this Amendment and any other matters relevant
hereto or thereto, all in form and substance satisfactory to the Administrative
Agent in its sole good faith discretion.

           

          
            
               

            

            
              20

              
                

              

            

            
               

            

          

           

          ARTICLE
III

          MISCELLANEOUS

          


          3.1           Amended
Terms; Release.

          


          (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.

          


          (b)           Release.  Upon
satisfaction of the conditions set forth in Article II hereof as determined by
the Administrative Agent in its sole discretion, the Administrative Agent shall
release its liens and security interests on the Sony Sale Assets on the Seventh
Amendment Effective Date.

          


          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.

          


          
            
               

            

            
              21

              
                

              

            

            
               

            

             

          

          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.

          


          3.6           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.

          


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of page intentionally left blank]

          


          
            
               

            

            
              22

              
                

              

            

            
               

            

             

          

          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
      and COO	 
	 	 	 	 


            

          

           

          
             

            
              
                	      
                              
                          GUARANTORS:

                        

                      	      
                        ENTERTAINMENT
      DISTRIBUTION COMPANY

                      	 
	 	      
                              
                           (USA), LLC, a Delaware limited liability
      company

                        

                      	 
	 	 	 	 
	
                         

                      	
                        By:
      

                      	/s/ Thomas
      Costabile	 
	 	Name: 	Thomas
      Costabile	 
	 	Title:	President
      and COO	 
	 	 	 	 


              

            

            
              

               

              
                
                  
                    	      
                                  
                              PARENT:

                            

                          	      
                                  
                              GLENAYRE ELECTRONICS,
      INC., a Colorado
      corporation

                            

                          	 
	 	      
                                  
                               

                            

                          	 
	 	 	 	 
	
                             

                          	
                            By:
      

                          	/s/ Clarke
      H. Bailey	 
	 	Name: 	Clarke
      H. Bailey	 
	 	Title:	Interim CEO	 
	 	 	 	 


                  

                

                

                   

                  
                    
                       

                    

                    
                       

                      
                        

                      

                    

                    
                       

                    

                  

                  
                     

                     

                    
                      
                        	      
                                      
                                        
                                    ADMINISTRATIVE
      AGENT

                                  

                                

                              	      
                                WACHOVIA
      BANK,

                              	 
	      
                                AND
      LENDERS: 

                              	      
                                      
                                  NATIONAL
      ASSOCIATION,

                                

                              	 
	 	as
      Administrative Agent and as a Lender	 
	 	 	 	 
	
                                 

                              	
                                By:
      

                              	/s/ Brian
      L. Martin	 
	 	Name: 	Brian
      L. Martin	 
	 	Title:	SVP	 
	 	 	 	 


                      

                    

                    

                       

                      
                        
                          
                            	      
                                          
                                       

                                    

                                  	      
                                    Euro
      Revolving Commitment Percentage:

                                  	100%
	 	      
                                          
                                      Euro
      Revolving Committed
      Amount:  

                                    

                                  	2
      million Euros


                             

                            
                              	 	ING
      CAPITAL LLC, as a Lender	 
	 	 	 	 
	
                                       

                                    	
                                      By:
      

                                    	/s/ Andrew
      C. Scepe	 
	 	Name: 	Andrew
      C. Scepe	 
	 	Title:	Vice
      President