Exhibit 10.19
AMENDED AND RESTATED SECURITY
AGREEMENT
THIS AMENDED AND RESTATED SECURITY
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 “ U.S.
Borrowers ” and individually as “ U.S.
Borrower ”); SUPERIOR ESSEX HOLDING CORP. , a
Delaware corporation (“ SEHC ”); SE
COMMUNICATIONS GP INC. , a Delaware corporation (“
Communications GP ”); ESSEX INTERNATIONAL INC.
, a Delaware corporation (“ Essex International
”); ESSEX CANADA INC. , a Delaware corporation
(“ Essex Canada ”); ESSEX GROUP MEXICO
INC. , a Delaware corporation (“ Essex Mexico
”); and ESSEX MEXICO HOLDINGS, L.L.C. , a Delaware
limited liability company (“ EMH ”; SEHC,
Communications GP, Essex International, Essex Canada, Essex Mexico,
and EMH are collectively referred to herein as “
Guarantors ” and individually as “
Guarantor ”, and collectively with Communications and
EGI, “ U.S. Obligors ” and individually as
“ U.S. Obligor ”), 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 Lenders (as defined in the Loan Agreement) 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, 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, certain of the Guarantors executed and delivered that
certain Continuing Guaranty Agreement dated November 10, 2003
in favor of Agent and the Existing Lenders, which Continuing
Guaranty Agreement was further acknowledged and reaffirmed pursuant
to that certain Acknowledgement and Reaffirmation of Loan Documents
dated April 14, 2006 (as at any time amended, restated,
modified or otherwise supplemented prior to the date hereof, the
“ Existing Guaranty ”), pursuant to which
certain of the Guarantors jointly and severally unconditionally
guaranteed to the Agent and the Existing Lenders the payment and
performance of all of the “Guaranteed Obligations” as
defined therein.
To secure the Obligations (as such
term is defined in the Existing Loan Agreement) and the Guaranteed
Obligations (as such term is defined in the Existing
Guaranty), certain of the U.S. Obligors executed and delivered that
certain Security Agreement dated November 10, 2003 in favor of
Agent, for the benefit of itself and the Existing Lenders, which
Security Agreement was further acknowledged and reaffirmed pursuant
to that certain Acknowledgement and Reaffirmation of Loan Documents
dated April 14, 2006 (as at any time amended, restated,
modified or otherwise supplemented prior to the date hereof, the
“ Existing Security Agreement ”).
Agent, Lenders, Communications, EGI
and ESSEX GROUP CANADA INC. , a Nova Scotia company (“
Canadian Borrower ”; Communications, EGI and Canadian
Borrower are collectively referred to herein as “
Borrowers ” and individually as “
Borrower ”), and the other parties thereto, have now
entered into a certain Second Amended and Restated Loan Agreement
dated the date hereof (as at any time amended, restated, modified
or supplemented, the “ Loan Agreement ”), which
Loan Agreement amends and restates the Existing Loan
Agreement.
In connection with the Loan
Agreement, (i) Guarantors have now entered into a certain
Amended and Restated Continuing Guaranty Agreement dated the date
hereof (as at any time amended, restated, modified or supplemented,
the “ Guaranty ”), which Guaranty amends and
restates the Existing Guaranty, and (ii) Communications and
EGI have now entered into a certain Continuing Guaranty Agreement
dated the date hereof (as at any time amended, restated, modified
or supplemented, the “ U.S. Borrowers’ Guaranty
”), pursuant to which Communications and EGI jointly and
severally unconditionally guarantee to the Agent and the other
Secured Parties the payment and performance of all of the
“Guaranteed Obligations” as defined therein, including
without limitation the Canadian Obligations (as defined in the 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 U.S. Obligors agree to amend and
restate the Existing Security Agreement in its entirety, and U.S.
Obligors have also agreed to amend and restate the Existing
Security Agreement in its entirety as hereinafter set
forth.
NOW, THEREFORE, for Ten Dollars
($10.00) in hand paid and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree to amend and restate the Existing
Security Agreement as follows:
1.
Definitions; Rules of Construction .
1.1
Definitions . Capitalized terms used herein, unless otherwise
defined herein, shall have the meanings ascribed to such terms in
the Loan Agreement. In addition to the terms defined in the
preamble and Recitals to this Agreement, as used in this Agreement,
the following terms shall have the following meanings for the
purposes of this Agreement:
Account - as defined in the UCC, including all rights to
payment for goods sold or leased, or for services
rendered.
Account Debtor
- a Person who is or becomes
obligated under or on account of an Account, Chattel Paper or
General Intangible.
Business Interruption Insurance
Assignment - a Collateral
Assignment of Business Interruption Insurance to be executed by
U.S. Obligors in favor of Agent, in form and substance reasonably
satisfactory to Agent, as security for the payment of the Secured
Obligations.
Chattel Paper
- as defined in the UCC.
Commercial Tort Claim
- as defined in the UCC and shall
include any commercial tort claims described on
Exhibit B attached hereto.
Deposit Account
- as defined in the UCC or any other
deposit account maintained by a Borrower or any other U.S.
Obligor.
Document - as defined in the UCC.
Electronic Chattel
Paper - as defined in the
UCC.
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Equipment - as defined in the UCC, including all
machinery, apparatus, equipment, fittings, furniture, fixtures,
motor vehicles and other tangible personal Property (other than
Inventory), and all parts, accessories and special tools therefor,
and accessions thereto.
Equity Interest
- the interest of any
(a) shareholder in a corporation, (b) partner in a
partnership (whether general, limited, limited liability or joint
venture), (c) member in a limited liability company, or
(d) other Person having any other form of equity security or
ownership interest.
Existing Guaranty
- shall have the meaning ascribed to
it in the Recitals to this Agreement.
Existing Lenders
- shall have the meaning ascribed to
it in the Recitals to this Agreement.
Existing Loan
Agreement - shall have
the meaning ascribed to it in the Recitals to this
Agreement.
Existing Security
Agreement - shall have
the meaning ascribed to it in the Recitals to this
Agreement.
General Intangibles
- as defined in the UCC, including
choses in action, causes of action, company or other business
records, inventions, blueprints, designs, patents, patent
applications, trademarks, trademark applications, trade names,
trade secrets, service marks, goodwill, brand names, copyrights,
registrations, licenses, franchises, customer lists, permits, tax
refund claims, computer programs, operational manuals, internet
addresses and domain names, insurance refunds and premium rebates,
all rights to indemnification, and all other intangible Property of
any kind.
Goods - as defined in the UCC.
Governmental Authority
- any federal, state, municipal,
foreign or other governmental department, agency, commission,
board, bureau, court, tribunal, instrumentality, political
subdivision, or other entity or officer exercising executive,
legislative, judicial, regulatory or administrative functions for
or pertaining to any government or court, in each case whether
associated with the United States, a state, district or territory
thereof, Canada, a province or territory thereof, or a foreign
entity or government.
Guaranty - shall have the meaning ascribed to it in the
Recitals to this Agreement.
Instrument
- as defined in the UCC.
Intellectual Property
- all intellectual and similar
Property of a Person, including inventions, designs, patents,
patent applications, copyrights, trademarks, service marks, trade
names, trade secrets, confidential or proprietary information,
customer lists, know-how, software and databases; all embodiments
or fixations thereof and all related documentation, registrations
and franchises; all books and records describing or used in
connection with the foregoing; and all licenses or other rights to
use any of the foregoing.
Inventory - as defined in the UCC, including all goods
intended for sale, lease, display or demonstration; all work in
process; and all raw materials, and other materials and supplies of
any kind that are or could be used in connection with the
manufacture, printing, packing, shipping,
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advertising, sale, lease or
furnishing of such goods, or otherwise used or consumed in a U.S.
Obligor’s business (but excluding Equipment).
Investment Property
- as defined in the UCC, including
all securities (whether certificated or uncertificated), security
entitlements, securities accounts, commodity contracts and
commodity accounts.
Letter-of-Credit Right
- as defined in the UCC, including a
right of a U.S. Obligor to payment or performance under a letter of
credit (whether the letter of credit is written or electronic),
whether or not such U.S. Obligor has demanded or is at the time
entitled to demand payment or performance.
Payment Intangible
- as defined in the UCC.
Person - any individual, corporation, limited liability
company, unlimited liability company, partnership, joint venture,
joint stock company, land trust, business trust, unincorporated
organization, Governmental Authority or other entity.
Pledge Agreement
- each pledge agreement pursuant to
which a U.S. Obligor pledges to Agent, for its benefit and for the
benefit of the Secured Parties, all of the Equity Interests of the
Subsidiary or Subsidiaries of such U.S. Obligor, in form and
substance satisfactory to Agent.
Secured Obligations
- all of the Obligations under (and
as defined in) the Loan Agreement, and all Guaranteed Obligations
of each Guarantor under (and as defined in) the Guaranty and of
each of Communications and EGI under (and as defined in) the U.S.
Borrowers’ Guaranty.
Secured Parties
- each of the “Secured
Parties” under (and as defined in) the Loan
Agreement.
Security - shall have the same meaning as in
Section 2(1) of the Securities Act of 1933.
Software - as defined in the UCC.
Supporting Obligations
- as defined in the UCC.
Tangible Chattel Paper
- as defined in the UCC.
UCC - the Uniform Commercial Code as in effect in
the State of Georgia or, when the laws of any other jurisdiction
govern the perfection or enforcement of any Lien, the Uniform
Commercial Code of such jurisdiction.
U.S. Borrowers’
Guaranty - shall have the
meaning ascribed to it in the Recitals to this
Agreement.
U.S. Collateral
- all personal property of each U.S.
Obligor, as more fully described in Section 2, all property of
such U.S. Obligor as more fully described in the other applicable
Security Documents as security for any Secured Obligations, and all
other Property of the U.S. Obligors that now or hereafter secured
or is intended to secure) and the Secured Obligations.
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1.2
Rules of Construction . The terms “ herein ,” “
hereof ” and “ hereunder ” and
other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision. Any
pronoun used shall be deemed to cover all genders. In the
computation of periods of time from a specified date to a later
specified date, the word “ from ” means
“from and including” and the words “ to
” and “ until ” each means “to but
excluding,” The section titles and list of exhibits appear as
a matter of convenience only and shall not affect the
interpretation of this Agreement. All references to statutes and
related regulations shall include any amendments of same and any
successor statutes and regulations; to any agreement, instrument or
other documents (including any of the Loan Documents) shall include
any and all amendments, modifications and supplements thereto and
any and all restatements, extensions or renewals thereof to the
extent such amendments, modifications, supplements, restatements,
extensions or renewals of any such documents are permitted by the
terms thereof; to any Person (including Agent, a Secured Party or a
U.S. Obligor) shall mean and include the successors and permitted
assigns of such Person; to “ including ” and
“ include ” shall be understood to mean
“including, without limitation” (and, for purposes of
this Agreement, the parties agree that the rule of ejusdem generis
shall not be applicable to limit a general statement, which is
followed by or referable to an enumeration of specific matters to
matters similar to the matters specifically mentioned); or to the
time of day shall mean the time of day on the day in question in
Atlanta, Georgia, unless otherwise expressly provided in this
Agreement. Any Lien referred to in this Agreement or any of the
other Loan Documents as having been created in favor of Agent, any
agreement entered into by Agent pursuant to this Agreement or any
of the Loan Documents, any payment made by or to, or funds received
by, Agent pursuant to or as contemplated by any of the Loan
Documents, or any other act taken or omitted to be taken by Agent
shall, unless otherwise expressly provided, be created, entered
into, made or received, or taken or omitted for the benefit or
account of the Secured Parties.
2.
Collateral .
2.1
Grant of Security Interest . Each U.S. Obligor hereby
grants to Agent, for the benefit of Secured Parties, in order to
secure the prompt payment and performance of the Secured
Obligations, a continuing security interest in and Lien upon all
personal Property of such U.S. Obligor, including all of the
following Property, whether now owned or hereafter acquired, and
wherever located:
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(i)
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all Accounts;
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(ii)
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all Chattel Paper, including electronic chattel
paper;
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(iii)
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all Commercial Tort Claims;
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(iv)
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all Deposit Accounts;
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(v)
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all Documents;
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(vi)
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all General Intangibles, including Payment
Intangibles, Software and Intellectual Property;
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(vii)
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all Goods, including Inventory, Equipment and
fixtures;
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(viii)
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all Instruments;
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(ix)
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all Investment Property;
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(x)
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all Letter-of-Credit Rights;
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(xi)
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all Supporting Obligations;
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(xii)
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all monies, whether or not in the possession or
under the control of an Agent, a Lender, or a bailee or Affiliate
of an Agent or a Lender, including any Cash Collateral;
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(xiii)
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all accessions to, substitutions for, and all
replacements, products, and cash and non-cash proceeds of the
foregoing, including proceeds of and unearned premiums with respect
to insurance policies, and claims against any Person for loss,
damage or destruction of any U.S. Collateral; and
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(xiv)
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all books and records (including customer lists,
files, correspondence, tapes, computer programs, print-outs and
computer records) pertaining to the foregoing.
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In addition to the foregoing, each U.S.
Obligor hereby ratifies, reaffirms, renews and continues its prior
pledge and assignment of, and grant of a security interest in favor
of Agent, for the benefit of the Secured Parties, in all of the
Collateral described in the Existing Security Agreement, and each
of the U.S. Borrowers additionally hereby ratifies, reaffirms,
renews and continues its prior pledge and assignment of, and grant
of a security interest in favor of Agent, for the benefit of the
Secured Parties, in all of the Collateral described in the Existing
Loan Agreement. Notwithstanding anything to the contrary
contained herein or in the other Loan Documents, the U.S. Obligors
shall not pledge more than 65% of the total voting Equity Interests
in any Foreign Subsidiary as Collateral.
2.2
Lien on Deposit Accounts .
(a)
Each U.S. Obligor hereby further grants to Agent, for the benefit
of Secured Parties, in order to secure the prompt payment and
performance of the Secured Obligations, a continuing security
interest in and Lien upon all of such U.S. Obligor’s right,
title and interest in and to each Deposit Account of such U.S.
Obligor and any deposits or other sums at any time credited to any
such Deposit Account, including any sums in any blocked or lockbox
accounts or in any accounts into which such sums are swept.
Each U.S. Obligor authorizes and directs each depository bank at
which a Dominion Account is maintained to deliver to the Agent upon
its written demand therefor, made at any time that a Springing
Dominion Event occurs and without notice to such U.S. Obligor (such
notice being hereby waived), all balances in each Dominion Account
maintained by such U.S. Obligor with such depository bank for
application to the applicable Borrower Group Obligations then
outstanding in accordance with Section 8.2.4 of the Loan
Agreement. Each U.S. Obligor irrevocably appoints Agent as
such U.S. Obligor’s attorney in fact to collect such balances
to the extent any such delivery is not so made.
(b)
U.S. Obligors shall take all commercially reasonable actions
necessary to establish Agent’s control (as defined under
Section 9-104 of the UCC) of each such Deposit Account (other than
any account exclusively used for payroll, payroll taxes, employee
benefits, workers’ compensation claims, prepaid insurance, or
any account containing not more than $250,000 at any time).
Only one U.S. Obligor shall be the sole account holder of each
Deposit Account and shall not allow any other Person (other than
Agent) to have control over a Deposit Account or any Property
deposited therein. Each U.S. Obligor shall notify Agent on a
monthly
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basis of any opening or closing of a
Deposit Account and, with the consent of Agent, will amend, or
cause the U.S. Borrowers to amend, Schedule 8.5 to
the Loan Agreement to reflect the same.
2.3
Real Estate Collateral .
2.3.1
Lien on Real Estate . The due and punctual payment and
performance of the Secured Obligations shall also be secured by the
Lien created by the Mortgages upon all Real Estate of each U.S.
Obligor described therein. The Mortgages shall be executed by
U.S. Obligors in favor of Agent concurrently with the execution of
this Agreement and shall be duly recorded, at U.S. Obligors’
expense, in each office where such recording is required to
constitute a fully perfected Lien upon the Real Estate covered
thereby. Within thirty (30) days, after any U.S.
Obligor’s obtaining any material interest in any Real Estate
not in existence on the date hereof, U.S. Obligors shall execute
and deliver to Agent, for the benefit of Secured Parties, a
mortgage, deed to secure debt, deed of trust, assignment or other
document satisfactory to Agent and sufficie
