Exhibit 10.20
AMENDED AND RESTATED PLEDGE
AGREEMENT
(U.S. BORROWERS)
THIS AMENDED AND RESTATED PLEDGE
AGREEMENT (this “Agreement”) is made on August 5,
2008, by and among SUPERIOR ESSEX COMMUNICATIONS LP , a
Delaware limited partnership (“ Communications
”); ESSEX GROUP, INC. , a Michigan corporation
(“ EGI ”; Communications and EGI are
collectively referred to herein as “ Pledgors ”
and individually as “ Pledgor ”), and BANK OF
AMERICA, N.A. , a national banking association with a mailing
address at 300 Galleria Parkway, N.W., Suite 800, Atlanta,
Georgia 30339, as administrative and collateral agent (in such
capacity, together with its successors in such capacity, “
Agent ”) for each of the financial institutions
(collectively, “ Lenders ”) now or hereafter
parties to the Loan Agreement (as defined below), and the other
Secured Parties (as defined in the Loan Agreement).
Recitals
:
Pursuant to that certain Credit
Agreement dated November 10, 2003, as amended and restated by
that certain Amended and Restated Loan and Security Agreement dated
April 14, 2006, by and among Communications, EGI
(collectively, “ U.S. Borrowers ”), Agent, and
the various financial institutions party thereto from time to time
(the “ Existing Lenders ”) (as at any time
amended, restated, modified or otherwise supplemented prior to the
date hereof, the “ Existing Loan Agreement ”),
the Existing Lenders agreed to make loans to, and issue letters of
credit and provide other financial accommodations on behalf of,
U.S. Borrowers.
In connection with the Existing Loan
Agreement, Pledgors executed and delivered that certain Pledge
Agreement dated November 10, 2003 in favor of Agent and the
Existing Lenders, which Pledge Agreement was amended by that
certain First Amendment to Pledge Agreement dated as of
April 14, 2006 (as at any time amended, restated, modified or
otherwise supplemented prior to the date hereof, the “
Existing Pledge Agreement ”), pursuant to which
Pledgors agreed to pledge to Agent the Pledged Collateral (as
defined in the Existing Pledge Agreement) to secure the Obligations
(as defined in the Existing Loan Agreement).
Pledgors and ESSEX GROUP CANADA
INC. , a Nova Scotia company (“ Canadian Borrower
”; Pledgors and Canadian Borrower are sometimes collectively
referred to herein as “ Borrowers ” and
individually as “ Borrower ”), have now entered
into a certain Second Amended and Restated Loan Agreement dated the
date hereof with Agent, Lenders and the other parties named therein
(as at any time amended, restated, modified or supplemented, the
“ Loan Agreement ”), which Loan Agreement amends
and restates the Existing Loan Agreement.
It is a condition to the Secured
Parties’ willingness to make loans and other financial
accommodations to or for the benefit of the Borrowers under the
Loan Agreement that each of the Pledgors agree to amend and restate
the Existing Pledge Agreement in its entirety as hereinafter set
forth.
The parties hereto agree that the
Existing Pledge Agreement is hereby amended and restated in its
entirety by this Agreement, and each Pledgor agrees to pledge to
the Agent, for the benefit of the Secured Parties, the Pledged
Collateral described herein, and to ratify, renew and continue the
prior pledge of such Pledged Collateral, in order to ensure and
secure the prompt payment and performance of the
Obligations.
NOW, THEREFORE, for Ten Dollars
($10.00) in hand paid to each Pledgor and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, and to secure the timely payment and performance of
the Secured Obligations (as hereinafter defined), each Pledgor
agrees as follows:
1.
Definitions . Capitalized terms used herein, unless
otherwise defined, shall have the meaning ascribed to them in
the Loan Agreement. As used herein, the following terms shall
have the following meanings:
“ Companies ”
shall mean each of Canadian Borrower, Essex Canada, Essex Mexico,
and each individually is referred to herein as a
“Company”.
“ Essex Canada ”
shall mean Essex Canada Inc., a Delaware corporation.
“ Essex Mexico ”
shall mean Essex Group Mexico Inc., a Delaware
corporation.
“ Pledged Collateral
” shall have the meaning ascribed to in Section 2
hereof.
“ Power ” shall
have the meaning ascribed to it in Section 2
hereof.
“ Secured Obligations
” shall mean all of the Obligations under (and as defined in)
the Loan Agreement including, without limitation, all U.S.
Obligations and Canadian Obligations, all liabilities and
obligations of Pledgors as guarantors of the Canadian Obligations
pursuant to the U.S. Borrowers’ Guaranty, and all obligations
of Pledgors now or hereafter existing under this
Agreement.
2.
Pledge; Agent’s Duties .
(a)
Each Pledgor hereby pledges, assigns, transfers, sets over and
delivers to Agent, and hereby grants to Agent, for the benefit of
itself and Lenders, a security interest in all of the Equity
Interests of the Companies held by such Pledgor and more
particularly described on Annex A and all of such
Pledgor’s options, if any, for the purchase of any Equity
Interests of the Companies, herewith delivered to Agent, and
where certificated, accompanied by powers (“ Powers
”) duly executed in blank, with signatures properly
guaranteed, and all proceeds thereof and all dividends or
distributions at any time payable in connection therewith (said
Equity Interests, Powers, options, proceeds, dividends and
distributions hereinafter collectively called the “
Pledged Collateral ”) as security for the due and
punctual payment and performance of the Secured Obligations. In
addition to the foregoing, each Pledgor hereby ratifies, reaffirms,
renews and continues its prior pledge and grant of a security
interest in favor of Agent, for the benefit of the Secured Parties,
in all of the Pledged Collateral described in the Existing Pledge
Agreement. Notwithstanding anything to the contrary contained
herein or in the other Loan Documents, Pledgors shall not pledge
more than 65% of the total voting Equity Interests in any Foreign
Subsidiary as Pledged Collateral.
(b)
Agent shall have no duty with respect to any of the Pledged
Collateral other than the duty to use reasonable care in the safe
custody of any tangible items of the Pledged Collateral in its
possession. Without limiting the generality of the foregoing,
Agent shall be under no obligation to sell any of the Pledged
Collateral or otherwise to take any steps necessary to preserve the
value of any of the Pledged Collateral or to preserve rights in the
Pledged Collateral against any other Persons, but may do so at its
option, and all expenses incurred in connection therewith shall be
for the sole account of Pledgors.
3.
Voting Rights . During the term of this Agreement, and
so long as no Event of Default shall exist, each Pledgor shall have
the right to vote all or any portion of the Equity Interests owned
by such Pledgor on all corporate questions for all purposes not
inconsistent with the terms of this Agreement or any of the other
Loan Documents. To that end, if Agent transfers all or any
portion of the Pledged Collateral, into its name or the name of its
nominee, to the extent authorized to do so under this Agreement or
any of the other Loan Documents, Agent shall, upon the request of a
Pledgor, unless an
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Event of Default shall exist, execute and
deliver or cause to be executed and delivered to such Pledgor,
proxies with respect to the Pledged Collateral. Each Pledgor hereby
grants to Agent, effective only upon the occurrence and during the
continuation of any Event of Default, an IRREVOCABLE
PROXY pursuant to which Agent shall be entitled to exercise all
voting powers pertaining to the Pledged Collateral, including to
call and attend all meetings of the shareholders or members of the
Companies to be held from time to time with full power to act and
vote in the name, place and stead of such Pledgor (whether or not
the Equity Interests shall have been transferred into its name or
the name of its nominee or nominees), give all consents, waivers
and ratifications in respect of the Pledged Collateral and
otherwise act with respect thereto as though it were the outright
owner thereof, and any and all proxies theretofore executed by
Agent shall terminate and thereafter be null and void and of
no effect whatsoever.
4.
Collection of Dividend Payments . During the term of this Agreement, and
so long as there shall not exist any Event of Default, each Pledgor
shall have the right to receive and retain any and all dividends
and other distributions payable by any Company to such Pledgor on
account of any of the Pledged Collateral; provided ,
that , to the extent that any Pledgor shall receive any
dividends or other distributions which are not expressly permitted
under or contemplated by the Loan Agreement, such Pledgor shall
hold the same in trust and promptly pay the same over to Agent for
application to the Secured Obligations. Upon the occurrence
and during the continuation of any Event of Default, all dividends
and other distributions payable by any Company on account of any of
the Pledged Collateral shall be paid to Agent and any such sum
received by any Pledgor shall be deemed to be held by such Pledgor
in trust for the benefit of Agent and shall be forthwith turned
over to Agent for application by Agent to the Secured Obligations
in such order of application as is specified in the Loan
Agreement.
5.
Representations and Warranties of Pledgor
. Each Pledgor warrants and
represents to Agent as follows (which representations and
warranties shall be deemed continuing): (a) such Pledgor
is the legal and beneficial owner of its respective portion of the
Pledged Collateral indicated on Annex A ; (b) all of
the Equity Interests have been duly and validly issued, are fully
paid and nonassessable, and are owned by such Pledgor free of any
Liens except for Permitted Liens and Agent’s security
interest hereunder; (c) the Pledged Collateral constitutes
(i) all of the issued and outstanding Equity Interests of each
of Essex Canada, Essex Mexico, and (ii) 65% of the issued and
outstanding voting Equity Interests of each of Canadian Borrower;
(d) except for those restrictions contained in the Loan
Documents, there are no contractual or charter restrictions upon
the voting rights or upon the transfer of any of the Pledged
Collateral; (e) such Pledgor has the right to vote,
pledge and grant a security interest in or otherwise transfer the
Pledged Collateral without the consent of any other party and free
of any Liens other than Permitted Liens and applicable restrictions
imposed by any Governmental Body and without any restriction under
the Organic Documents of such Pledgor or any Company or any
agreement among such Pledgor’s or any Company’s
shareholders or members; (f) this Agreement has been duly
authorized, executed and delivered by such Pledgor and constitutes
a legal, valid and binding obligation of such Pledgor, enforceable
in accordance with its terms except to the extent that the
enforceability thereof may be limited by bankruptcy, insolvency or
other similar laws of general application affecting the enforcement
of creditors’ rights; (g) the execution, delivery and
performance by such Pledgor of this Agreement and the exercise by
Agent of its rights and remedies hereunder do not and will not
result in the violation of the articles of incorporation or
organization or by-laws or operating agreement of such Pledgor, any
material agreement, indenture, instrument or Applicable Law by
which such Pledgor or any Company is bound or to which such Pledgor
or any Company is subject (except such Pledgor makes no
representation or warranty about Agent’s prospective
compliance with any federal or state laws or regulations governing
the sale or exchange of securities); (h) no consent, filing,
approval, registration or recording is required (x) for the
pledge by such Pledgor of the Pledged Collateral pursuant to
this
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Agreement or (y) to perfect the Lien
created by this Agreement; (i) none of the Pledged Collateral
is held or maintained in the form of a securities entitlement or
credited to any securities account; (j) none of the Pledged
Collateral constituting membership interests in a limited liability
company is, nor has the relevant Company elected to designate any
of the Pledged Collateral as, a “security” under (and
as defined in) Article 8 of the UCC; and (k) unless a
Power is delivered in connection therewith, none of the Pledged
Collateral is evidenced by a certificate or other
writing.
6.
Affirmative Covenants of Pledgors . Until all of the Secured Obligations
have been satisfied in full and the Loan Agreement has been
terminated, each Pledgor covenants that it will:
(a) warrant and defend at its own expense Agent’s right,
title, and security interest in and to the Pledged Collateral
against the claims of any Person; (b) promptly deliver to
Agent all material written notices with respect to the Pledged
Collateral, and will promptly give written notice to Agent of any
other notices received by such Pledgor with respect to the Pledged
Collateral; and (c) deliver to Agent promptly to hold under
this Agreement any Equity Interests of the Companies subsequently
acquired by such Pledgor, whether acquired by such Pledgor by
virtue of the exercise of any options included within the Pledged
Collateral or otherwise (which Equity Interests shall be deemed to
be a part of the Pledged Collateral); (d) if any of the
Pledged Collateral constituting membership interests in a limited
liability company is hereafter designated by the relevant Company
as a “security” under (and as defined in)
Article 8 of the UCC, cause such Pledged Collateral to be
certificated; (e) if at any time hereafter any of the Pledged
Collateral which is not currently certificated becomes
certificated, deliver all certificates or other documents
evidencing or representing the Pledged Collateral to Agent,
accompanied by Powers, all in form and substance satisfactory to
Agent and as required pursuant to this Agreement.
7.
Negative Covenants of Pledgors . Until all of the Secured Obligations
have been satisfied in full and the Loan Agreement has been
terminated, each Pledgor covenants that it will not, without the
prior written consent of Agent, (a) sell, convey or otherwise
dispose of any of the Pledged Collateral or any interest therein
other than as permitted under the Loan Agreement; (b) incur or
permit to be incurred any Lien whatsoever upon or with respect to
any of the Pledged Collateral or the proceeds thereof, other than
the security interest created hereby and Permitted Liens;
(c) consent to the issuance by any Company of any new Equity
Interests unless otherwise expressly permitted under the Loan
Agreement; (d) consent to any merger or other consolidation of
any Company with or into any corporation or other entity other than
as permitted under the Loan Agreement; (e) cause any Pledged
Collateral to be held or maintained in the form of a security
entitlement or credited to any securities account;
(f) designate, or cause an
