Exhibit 10.1

 

SEVENTH AMENDMENT TO CREDIT AGREEMENT

 

THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made and
entered into as of June 27, 2005, by and among SUPERIOR ESSEX COMMUNICATIONS
L.P., a Delaware limited partnership (“Superior”), ESSEX GROUP, INC., a Michigan
corporation (“Essex”) (Superior and Essex being referred to collectively as
“Borrowers,” and individually as a “Borrower”); various financial institutions
(“Lenders”); FLEET CAPITAL CORPORATION, a Rhode Island corporation with an
office at 300 Galleria Parkway, Suite 800, Atlanta, Georgia  30339, in its
capacity as collateral and administrative agent for the Lenders (together with
its successors and assigns in such capacity, “Administrative Agent”); and
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, in its capacity as
syndication agent for the Lenders (together with its successors in such
capacity, “Syndication Agent”; Administrative Agent and Syndication Agent are
each hereafter referred to from time to time individually as an “Agent” and
collectively as “Agents”).

 

Recitals:

 

Borrowers, Lenders and Agents are parties to a certain Credit Agreement, dated
November 10, 2003, as amended by that certain First Amendment to Credit
Agreement dated February 20, 2004, that certain Second Amendment to Credit
Agreement dated March 18, 2004, that certain Third Amendment to Credit Agreement
and Consent to Specific Transactions dated as of April 2, 2004, that certain
Fourth Amendment to Credit Agreement dated April 30, 2004, that certain Fifth
Amendment to Credit Agreement and Consent to Specific Transactions dated
June 16, 2004 and that certain Sixth Amendment to Credit Agreement dated
March 11, 2005 (as at any time amended, restated or otherwise modified, the
“Credit Agreement”), pursuant to which Lenders have made certain revolving
credit loans and other extensions of credit to Borrowers.

 

Borrowers have requested that Agents and Lenders amend the definitions of
“Consigned Inventory Conditions”, “Eligible Consignee”, “Inventory Formula
Amount” and “Permitted Consigned Inventory” under the Credit Agreement as set
forth herein.  Agents and Lenders are willing to amend such definitions and
consent to certain other amendments contained herein, subject to the terms and
conditions contained herein.

 

NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and other good and
valuable consideration, the receipt and sufficiency of which are hereby
severally acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:

 

1.                                      Definitions.  All capitalized terms used
in this Amendment, unless otherwise defined herein, shall have the meaning
ascribed to such terms in the Credit Agreement.

 

2.                                      Amendments to Credit Agreement.  The
Credit Agreement is hereby amended as follows:

 

(a)                                  By adding to the end of Section 9.1.15 the
following sentence:

 

Essex shall, promptly after creation of SE Holding, C.V., pledge to
Administrative Agent 66% of the Equity Interests held by Essex in such Foreign
Venture Investment as required by the definition of Foreign Venture Investment.

 

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(b)                                 By deleting the “and” immediately preceding
clause (vi) of Section 9.2.4 and by adding the following to the end of the first
sentence of Section 9.2.4:

 

; (vii) transactions pursuant to which a Borrower or a Subsidiary licenses
intellectual property of such Borrower or such Subsidiary to any Foreign Venture
Investment; and (viii) transactions pursuant to which a Borrower or a Subsidiary
(A) sells, assigns or otherwise transfers Equipment having a book value not to
exceed $5,000,000 in the aggregate to SE Holding, C.V. or any of its
subsidiaries, or (B) sells Inventory in the Ordinary Course of Business to SE
Holding, C.V. or any of its subsidiaries

 

(c)                                  By deleting the definition of “Consigned
Inventory Conditions” in its entirety and substituting the following in lieu
thereof:

 

Consigned Inventory Conditions – the following conditions:  (i) the Inventory is
owned by a Borrower, (ii) the Inventory has been consigned to an Eligible
Consignee, (iii) the Inventory is located at a location in (A) in the United
States at a location set forth on Schedule 7.1.1 or (B) in Canada (other than in
the Province of Quebec) at a location set forth on Schedule 7.1.1, and (iv) the
Inventory would otherwise constitute Eligible Inventory if it were not Consigned
Inventory.

 

(d)                                 By deleting the definition of “Eligible
Consignee” in its entirety and substituting the following in lieu thereof:

 

Eligible Consignee - a consignee which Administrative Agent, in its reasonable
credit judgment, deems to be an eligible consignee.  Without limiting the
generality of the foregoing, no consignee will be an Eligible Consignee unless: 
(i) such consignee shall have executed a consignment agreement, which has been
assigned to Administrative Agent and is otherwise in form and scope acceptable
to Administrative Agent, granting the applicable Borrower and its assigns a
security interest under the UCC or the PPSA, as applicable, in all Consigned
Inventory that is consigned by such Borrower to such consignee, together with
the cash and non-cash proceeds thereof; (ii) consignee and such Borrower shall
have executed or otherwise authorized the filing of financing statements under
the UCC or the PPSA, as applicable, in each case in form acceptable to
Administrative Agent, based upon the requirements of the filing jurisdiction,
naming such consignee as debtor and such Borrower as secured party (and, if
requested by Administrative Agent, naming Administrative Agent as assignee),
covering the Consigned Inventory and the proceeds thereof; such financing
statement shall have been filed of record in all appropriate filing locations
for the perfection of a first priority security interest in such Consigned
Inventory and the identifiable proceeds thereof, and, after filing of such
financing statements, such Borrower shall have conducted searches of all filings
made against such consignee in such filing offices and taken such other action
as Administrative Agent may reasonably request, including notification pursuant
to Section 9-324 of the UCC (or similar applicable provisions under the PPSA, if
applicable) to each holder of a conflicting Lien in such Consigned Inventory,
which shall confirm that the security interest in the Consigned Inventory in
favor of such Borrower that such Borrower has assigned to Administrative Agent,
together with the identifiable proceeds thereof, is and shall be a first
priority purchase money security interest; (iii) if requested by Administrative
Agent, Administrative Agent shall have received copies of the consignment
agreement, the filed financing statements under the UCC and the PPSA, as
applicable, and the UCC and the PPSA searches referred to in clauses (i) and
(ii) 

 

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above, and such other instruments, documents, certificates, opinions or
assurances reasonably requested, and such Borrower shall have taken such other
action as Administrative Agent may have reasonably requested in connection with
the consignee; (iv) such consignee shall maintain the Consigned Inventory at a
location set forth on Schedule 7.1.1; and (v) the creditworthiness of such
consignee is acceptable to Administrative Agent, in Administrative Agent’s
reasonable credit judgment.

 

(e)                                  By deleting the definition of “Inventory
Formula Amount” in its entirety and substituting the following in lieu thereof:

 

Inventory Formula Amount - on any date of determination thereof, an amount equal
to the lesser of (a) $70,000,000 or (b) the lesser of (A) 65% of the Value of
Eligible Inventory on such date consisting of raw materials, work in process and
finished goods and (B) the product of 85% multiplied by the Net Orderly
Liquidation Value Percentage multiplied by the Value of Eligible Inventory on
such date consisting of raw materials, work in process and finished goods;
provided, that in no event shall the aggregate outstanding amount of Revolver
Loans measured at any time by the Value of Eligible Inventory that is Consigned
Inventory located within the United States or Canada (other than the Province of
Quebec), and that satisfies the Consigned Inventory Conditions, exceed the
lesser of (Y) $30,000,000 and (Z) 20% of the Inventory Formula Amount at any
date of determination.  Administrative Agent shall have the right at any time to
decrease the advance rate percentage in its reasonable credit judgment;
provided, that any such decrease in the advance rate percentages shall not be
effective until 3 Business Days after written notice thereof is provided to
Borrowers by Administrative Agent.

 

(f)                                    By deleting the definition of “Permitted
Consigned Inventory” in its entirety and substituting the following in lieu
thereof:

 

Permitted Consigned Inventory - Consigned Inventory, (i) the Value of which
shall not exceed $50,000,000 in the aggregate at any time, and (ii) which is the
subject of a properly filed financing statement under the UCC or the PPSA, as
applicable, in favor of a Borrower with respect to such Consigned Inventory;
provided, that Borrowers may maintain Consigned Inventory, the Value of which
shall not exceed $25,000,000 in the aggregate at any time, which does not
satisfy the requirement specified in clause (ii) hereof.

 

(g)                                 By deleting the definition of “Subsidiary”
in its entirety and substituting the following in lieu thereof:

 

Subsidiary – any Person in which more than 50% of its outstanding Voting
Securities or more that 50% of all Equity Interests is owned directly or
indirectly by a Borrower, by one or more Subsidiaries of such Borrower or by a
Borrower and one or more other Subsidiaries; provided, however, that neither SE
Holding, C.V. nor any of its subsidiaries shall be deemed a Subsidiary.

 

(g)                                 By adding at the appropriate alphabetical
position the definition of “PPSA” as follows:

 

PPSA - the Personal Property Security Act as in effect from time to time in any
Province of Canada (other than the Province of Quebec, Canada), and all
regulations thereunder, as amended from time to time, and any successor
legislation.

 

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3.                                      Foreign Venture Investment.  Borrowers
have informed Administrative Agent that they intend to make Foreign Venture
Investments in an amount of up to $30,000,000 solely for their account and which
otherwise comply with the limitations on Foreign Venture Investments set forth
in the Credit Agreement, with the legal structure of such investments to be
substantially in accordance with the company structure chart delivered to
Administrative Agent and its counsel on or about April 11, 2005 (the “Chart”). 
Administrative Agent and the Lenders acknowledge that (a) such investments, to
the extent consistent with the terms so delivered to Administrative Agent, shall
constitute Foreign Venture Investments for purposes of the Credit Agreement and
(b) Essex is forming Superior China Magnet Wire GP Inc. (indicated on the Chart
to be “Texas Partner”), SE Holding, C.V. (indicated on the Chart to be
“DutchCV”), Superior Essex Group Mauritius, Ltd. (indicated on the Chart to be
“Mauritius”), and Essex Magnet Wire (Suzhou) Ltd. (indicated on the Chart to be
“Essex Suzhou”).

 

4.                                      Consent.  Notwithstanding anything in
the Credit Agreement to the contrary, Agents and Lenders hereby consent to all
failures of Borrowers to comply with Sections 7.1.1 and 7.3.3 of the Credit
Agreement as a result of the definition of “Permitted Consigned Inventory” in
effect prior to the effectiveness of this Amendment.

 

5.                                      Ratification and Reaffirmation.  Each
Borrower hereby ratifies and reaffirms the Obligations, each of the Loan
Documents and all of such Borrower’s covenants, duties, indebtedness and
liabilities under the Loan Documents.

 

6.                                      Acknowledgments and Stipulations.  Each
Borrower acknowledges and stipulates that the Credit Agreement and the other
Loan Documents executed by Borrowers are legal, valid and binding obligations of
Borrowers that are enforceable against Borrowers in accordance with the terms
thereof; all of the Obligations are owing and payable without defense, offset or
counterclaim (and to the extent there exists any such defense, offset or
counterclaim on the date hereof, the same is hereby waived by each Borrower);
the security interests and liens granted by Borrowers in favor of Administrative
Agent, for the benefit of itself and Lenders, are duly perfected, first priority
security interests and liens; and the unpaid principal amount of the Loans and
LC Outstandings on and as of June 27, 2005, totaled $44,411,496.00.

 

7.                                      Representations and Warranties.  Each
Borrower represents and warrants to Agents and Lenders, to induce Agents and
Lenders to enter into this Amendment, that (a) after giving effect to this
Amendment, no Default or Event of Default exists on the date hereof; (b) the
execution, delivery and performance of this Amendment have been duly authorized
by all requisite company action on the part of each Borrower and this Amendment
has been duly executed and delivered by each Borrower; and (c) all of the
representations and warranties made by Borrowers in the Credit Agreement are
true and correct, in all material respects, on and as of the date hereof, except
those representations and warranties made as of a specific date in which such
case such representations and warranties were true and correct as of such date.

 

8.                                      Reference to Credit Agreement.  Upon the
effectiveness of this Amendment, each reference in the Credit Agreement to “this
Agreement,” “hereunder,” or words of like import shall mean and be a reference
to the Credit Agreement, as amended by this Amendment.

 

9.                                      Breach of Amendment.  This Amendment
shall be part of the Credit Agreement and a breach of any representation,
warranty or covenant herein shall constitute an Event of Default.

 

10.                               Conditions Precedent.  The effectiveness of
the amendments contained in Section 2 hereof are subject to the satisfaction of
each of the following conditions precedent, in form and substance satisfactory
to Administrative Agent, unless satisfaction thereof is specifically waived in
writing by Administrative Agent:

 

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(a)                                  Administrative Agent shall have received a
duly executed counterpart of this Amendment from Borrowers, together with (i) a
Consent and Reaffirmation duly signed by the Guarantors, (ii) a certificate of
resolutions from each Borrower authorizing this Amendment and the other
documents referenced herein and (iii) such additional documents, instruments and
certificates as Agents and Lenders shall require in connection herewith; and

 

(b)                                 Administrative Agent shall have received
from the Borrowers an amended Schedule 7.1.1 that reflects each of the business
locations where tangible items of Collateral, other than Inventory in transit,
of the Borrowers is or may be kept as of the date hereof.

 

11.                               Effective Date.   Notwithstanding the
effective date of any other provision of this Amendment, the provisions set
forth in Section 2 of this Amendment shall be deemed to have been effective as
of January 31, 2005.

 

12.                               Expenses of Agents.  Borrowers agree to pay,
on demand, all costs and expenses incurred by Agents in connection with the
preparation, negotiation and execution of this Amendment and any other Loan
Documents executed pursuant hereto and any and all amendments, modifications,
and supplements thereto, including, without limitation, the reasonable costs and
fees of Agents’ legal counsel and any taxes or expenses associated with or
incurred in connection with any instrument or agreement referred to herein or
contemplated hereby.

 

13.                               Miscellaneous.  This Amendment shall be
effective upon acceptance by Agents and Lenders, whereupon the same shall be
governed by and construed in accordance with the internal laws of the State of
Georgia.  This Amendment shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.  This Amendment may
be executed in any number of counterparts and by different parties to this
Amendment on separate counterparts, each of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute one and the same
agreement.  Any signature delivered by a party by facsimile transmission shall
be deemed to be an original signature hereto.  Section titles and references
used in this Amendment shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreements among the parties hereto.

 

14.                               No Novation, etc.  Except as otherwise
expressly provided in this Amendment, nothing herein shall be deemed to amend or
modify any provision of the Credit Agreement or any of the other Loan Documents,
each of which shall remain in full force and effect.  This Amendment is not
intended to be, nor shall it be construed to create, a novation or accord and
satisfaction, and the Credit Agreement as herein modified shall continue in full
force and effect.

 

15.                               Further Assurances.  Each Borrower agrees to
take such further actions as Agents and Lenders shall reasonably request from
time to time in connection herewith to evidence or give effect to the amendments
set forth herein or any of the transactions contemplated hereby.

 

16.                               Release of Claims.  To induce Agents and
Lenders to enter into this Amendment, each Borrower hereby releases, acquits and
forever discharges Agents and Lenders, and all officers, directors, agents,
employees, successors and assigns of Agents and Lenders, from any and all
liabilities, claims, demands, actions or causes of action of any kind or nature
(if there be any), whether absolute or contingent, disputed or undisputed, at
law or in equity, or known or unknown, that any Borrower now has or ever had
against Agents or Lenders arising under or in connection with any of the Loan
Documents or otherwise.  Each Borrower represents and warrants to Agents and
Lenders that such Borrower has not transferred or assigned to any Person any
claim that such Borrower ever had or claimed to have against Agents or Lenders.

 

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17.                               Waiver of Jury Trial.  To the fullest extent
permitted by applicable law, the parties hereto each hereby waives the right to
trial by jury in any action, suit, counterclaim or proceeding arising out of or
related to this Amendment.

 

 

[Remainder of page intentionally left blank; signatures on the following page]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed under seal and delivered by their respective duly authorized officers
on the date first written above.

 

 

 

BORROWERS:

 

 

 

 

 

SUPERIOR ESSEX COMMUNICATIONS L.P.

 

 

 

 

 

By:

  /s/ DAVID S. ALDRIDGE

 

 

 

 

Name: David S. Aldridge 
Title: Senior Vice President and Chief Financial
Officer

 

 

 

 

 

 

 

 

 

ESSEX GROUP, INC.

 

 

 

 

 

By:

  /s/ DAVID S. ALDRIDGE

 

 

 

 

Name: David S. Aldridge
Title: Vice President and Treasurer

 

[Signatures continued on following page]

 

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LENDERS:

 

 

 

Revolver Commitment: $60,000,000.00

 

FLEET CAPITAL CORPORATION

 

 

 

 

 

By:

   /s/ GLENN LITTLE

 

 

 

 

Title:

  Senior Vice President

 

 

 

 

 

 

 

Revolver Commitment: $60,000,000.00

 

GENERAL ELECTRIC CAPITAL
CORPORATION

 

 

 

 

 

By:

   /s/ CURTIS J. CORREA

 

 

 

 

Title:

  Duly Authorized Signatory

 

 

 

 

 

 

 

Revolver Commitment: $55,000,000.00

 

WACHOVIA BANK, NATIONAL ASSOCIATION

 

 

 

 

 

By:

   /s/ DANIEL L. DENTON

 

 

 

 

Title:

  Director

 

 

 

[Signatures continued on the following page]

 

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ADMINISTRATIVE AGENT:

 

 

 

 

 

FLEET CAPITAL CORPORATION,

 

 

as Administrative Agent

 

 

 

 

 

By:

   /s/ GLENN :LITTLE

 

 

 

 

Title:

   Senior Vice President

 

 

 

 

 

 

 

 

 

SYNDICATION AGENT:

 

 

 

 

 

GENERAL ELECTRIC CAPITAL 
CORPORATION, as Syndication Agent

 

 

 

 

 

By:

   /s/ CURTIS J. CORREA

 

 

 

 

Title:

  Duly Authorized Signatory

 

 

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CONSENT AND REAFFIRMATION

 

Each of the undersigned guarantors of the Obligations of Borrowers at any time
owing to Agents and Lenders hereby (i) acknowledges receipt of a copy of the
foregoing Seventh Amendment to Credit Agreement; (ii) consents to Borrowers’
execution and delivery thereof; (iii) agrees to be bound thereby; and
(iv) affirms that nothing contained therein shall modify in any respect
whatsoever its guaranty of the Obligations and reaffirms that such guaranty is
and shall remain in full force and effect.

 

IN WITNESS WHEREOF, the undersigned has executed this Consent and Reaffirmation
as of the date of such Seventh Amendment to Credit Agreement.

 

 

 

SUPERIOR ESSEX INC.

 

 

 

 

 

By:

  /s/ DAVID S. ALDRIDGE

 

 

 

David S. Aldridge, Vice President,
Treasurer and CFO

 

 

 

 

 

SUPERIOR ESSEX HOLDING CORP.

 

 

 

 

 

By:

  /s/ DAVID S. ALDRIDGE

 

 

 

David S. Aldridge, Vice President and
Treasurer

 

 

 

 

 

ESSEX INTERNATIONAL INC.

 

 

 

 

 

By:

  /s/ DAVID S. ALDRIDGE

 

 

 

David S. Aldridge, Vice President,
Treasurer, Assistant Secretary and CFO

 

 

 

 

 

ESSEX GROUP, INC.

 

 

 

 

 

By:

  /s/ DAVID S. ALDRIDGE

 

 

 

David S. Aldridge, Vice President,
Treasurer and Assistant Secretary

 

 

[Signatures continued on the following page]

 

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ESSEX TECHNOLOGY, INC.

 

 

 

 

 

By:

  /s/ DAVID S. ALDRIDGE

 

 

 

David S. Aldridge, Vice President,
Treasurer and Assistant Secretary

 

 

 

 

 

ESSEX MEXICO HOLDINGS, L.L.C.

 

 

 

 

 

By:

  /s/ DAVID S. ALDRIDGE

 

 

 

David S. Aldridge, Vice President,

 

 

Treasurer and Assistant Secretary

 

 

 

 

 

ESSEX WIRE CORPORATION

 

 

 

 

 

By:

  /s/ DAVID S. ALDRIDGE

 

 

 

David S. Aldridge, Vice President,

 

 

Treasurer and Assistant Secretary

 

 

 

 

 

ESSEX CANADA INC.

 

 

 

 

 

By:

  /s/ DAVID S. ALDRIDGE

 

 

 

David S. Aldridge, Vice President,

 

 

Treasurer and Assistant Secretary

 

 

 

 

 

ESSEX GROUP MEXICO INC.

 

 

 

 

 

By:

  /s/ DAVID S. ALDRIDGE

 

 

 

David S. Aldridge, Vice President,

 

 

Treasurer and Assistant Secretary

 

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