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.

 

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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:

 

 

(i)

all Accounts;

 

 

 

 

(ii)

all Chattel Paper, including electronic chattel paper;

 

 

 

 

(iii)

all Commercial Tort Claims;

 

 

 

 

(iv)

all Deposit Accounts;

 

 

 

 

(v)

all Documents;

 

 

 

 

(vi)

all General Intangibles, including Payment Intangibles, Software and
Intellectual Property;

 

 

 

 

(vii)

all Goods, including Inventory, Equipment and fixtures;

 

 

 

 

(viii)

all Instruments;

 

 

 

 

(ix)

all Investment Property;

 

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(x)

all Letter-of-Credit Rights;

 

 

 

 

(xi)

all Supporting Obligations;

 

 

 

 

(xii)

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;

 

 

 

 

(xiii)

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

 

 

 

 

(xiv)

all books and records (including customer lists, files, correspondence, tapes,
computer programs, print-outs and computer records) pertaining to the foregoing.

 

 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 sufficient to
convey and perfect, upon recordation thereof in the proper real estate records,
in favor of Agent a first priority Lien upon such interest as security for the
payment or performance of the Secured Obligations.

 

2.3.2        Collateral Assignment of Leases.  Each U.S. Obligor hereby further
grants and collaterally assigns to Agent, for the benefit of Secured Parties, in
order to secure the prompt payment and performance of the Secured Obligations,
all of such U.S. Obligor’s right, title and interest in, to and under, all now
or hereafter existing leases of real Property to which such U.S. Obligor is a
party, whether as lessor or lessee, and all extensions, renewals and
modifications thereof, except with respect to any such lease to the extent that
such grant and collateral assignment is restricted under such lease (and such
restriction is not otherwise invalidated under Applicable Law).

 

2.3.3        Conflict of Mortgage Terms.  Notwithstanding anything to the
contrary in this Agreement, to the extent any provisions herein (including, but
not limited to the remedial provisions contained in Section 4) is in direct
conflict with any provisions contained in any Mortgage, mortgage, deed to secure
debt, deed of trust, assignment, or any other document executed in accordance
with Section 2.3.1 herein to convey and perfect in favor of Agent a Lien upon
any Real Estate, the provisions of such Mortgage, mortgage, deed to secure debt,
deed of trust, assignment, or other document shall govern and control.

 

2.4          Other Collateral.

 

2.4.1        Equity Interests.  The due and punctual payment and performance of
the Secured Obligations shall also be secured by the Liens created by the Pledge
Agreements upon all Equity Interests of each U.S. Obligor described therein,
other than those Equity Interests which are expressly excluded from the U.S.
Collateral pursuant to the last sentence of Section 2.1(a) hereof.  The Pledge
Agreements shall be executed by U.S. Obligors in favor of Agent concurrently
with the execution of this Agreement and delivered to Agent.

 

2.4.2        Cash Collateral and Other Collateral. In addition to the items of
Property referred to in this Section 2, the Secured Obligations shall also be
secured by Cash Collateral to the extent provided for in the Loan Documents and
all of the other items of Property from time to time described in any of the
Loan Documents as security for any of the Secured Obligations. Any Cash
Collateral may be invested, in Agent’s discretion, in Cash Equivalents, but
Agent shall have no duty to do so, regardless of any agreement, understanding or
course of dealing with any U.S. Obligor, and shall have no responsibility for
any investment or loss.  Each U.S. Obligor hereby grants to Agent, for the
benefit of Secured Parties, a security interest in all Cash Collateral held from
time to time and all proceeds thereof, as security for the Secured Obligations,
whether such Cash Collateral is held in the Cash Collateral Account or
elsewhere. 

 

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Agent may apply Cash Collateral to the payment of any Secured Obligations, in
accordance with the Loan Agreement, as they become due and payable.  The Cash
Collateral Account and all Cash Collateral shall be under the sole dominion and
control of Agent.  No U.S. Obligor or other Person claiming through or on behalf
of any U.S. Obligor shall have any right to any Cash Collateral, until Full
Payment of all Secured Obligations.

 

2.4.3        Commercial Tort Claims. U.S. Obligors shall promptly notify Agent
in writing on a monthly basis, or otherwise at the reasonable request of
Administrative Agent, if any U.S. Obligor has a Commercial Tort Claim (other
than a Commercial Tort Claim for less than $2,000,000) for which a complaint has
been filed in a court of competent jurisdiction, and, upon Agent’s request,
shall promptly update Exhibit B hereto and execute such documents and take such
actions as Agent deems appropriate to confer upon Agent (for the benefit of
Secured Parties) a duly perfected, first priority Lien upon such claim.

 

2.4.4        Certain After-Acquired Collateral. U.S. Obligors shall promptly
notify Agent in writing on a monthly basis, or otherwise at the reasonable
request of Administrative Agent, upon any U.S. Obligor’s obtaining any U.S.
Collateral after the date hereof consisting of Deposit Accounts, Investment
Property, Letter-of-Credit Rights or Electronic Chattel Paper and, upon Agent’s
reasonable request, shall promptly execute such documents and do such other acts
or things deemed appropriate by Agent to confer upon Agent control with respect
to such U.S. Collateral; promptly notify Agent in writing on a monthly basis, or
otherwise at the reasonable request of Administrative Agent, upon any U.S.
Obligor’s obtaining any U.S. Collateral after the date hereof consisting of
Documents or Instruments (other than checks received in the Ordinary Course of
Business of such U.S. Obligor and deposited into a Deposit Account) and, upon
Agent’s reasonable request, shall promptly execute such documents and do such
other acts or things deemed appropriate by Agent to deliver to Agent possession
of such Documents as are negotiable and Instruments, and, with respect to
non-negotiable Documents, to have such non-negotiable Documents issued in the
name of Agent; and with respect to U.S. Collateral in the possession of a third
party, other than certificated securities and Goods covered by a Document, U.S.
Obligors shall use commercially reasonable efforts to obtain an acknowledgment
from the third party that is in possession of such U.S. Collateral that such
third party holds the U.S. Collateral for the benefit of Agent.

 

2.4.5        Liens and Offset Rights.  In addition to all Liens upon and rights
of setoff that Secured Parties may have against U.S. Obligors or any property of
U.S. Obligors under any other agreement with U.S. Obligors or pursuant to
Applicable Law, Agent shall have, with respect to each U.S. Obligor’s
obligations under the Loan Agreement or its respective Guaranty, as applicable,
and to the extent permitted by Applicable Law, a contractual possessory security
interest in and a contractual right of setoff against, and each U.S. Obligor
hereby grants Agent, for the benefit of Secured Parties, a security interest in,
and hereby assigns, conveys, pledges and transfers to Agent, for the benefit of
Secured Parties, all of such U.S. Obligor’s right, title and interest in and to
all of such U.S. Obligor’s deposits, moneys, securities and other property now
or hereafter in the possession of or on deposit with Agent or any direct or
indirect subsidiary or affiliate of Agent, whether held in a general or special
account or deposit, whether held jointly with another Person, and whether held
for safekeeping or otherwise (excluding, however, any trust accounts).  Each
such security interest and right of setoff may be exercised only during the
existence of an Event of Default without demand upon or notice to any U.S.
Obligor.

 

2.5          No Assumption of Liability. The security interests and Liens
granted pursuant to this Agreement are granted as security only and shall not
subject any Secured Party to, or in any way alter or modify, any obligation of
liability of U.S. Obligors with respect to or arising out of the U.S.
Collateral.

 

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2.6          Lien Perfection; Further Assurances. To the extent not otherwise
specifically provided for herein, promptly after Agent’s request therefor, U.S.
Obligors shall execute or cause to be executed and deliver to Agent such
instruments, assignments, title certificates or other documents as are necessary
under the Loan Agreement, UCC or other Applicable Law to perfect (or continue
the perfection of) Agent’s Lien upon the U.S. Collateral (other than those
Commercial Tort Claims which are not required to be added to Exhibit B pursuant
to Section 2.4.3) and shall take such other action as may be requested by Agent
to give effect to or carry out the intent and purposes of this Agreement. Unless
prohibited by Applicable Law, each U.S. Obligor hereby irrevocably authorizes
Agent to execute and file in any jurisdiction any financing statement or
amendment thereto on such U.S. Obligor’s behalf. Each U.S. Obligor also hereby
ratifies its authorization for Agent to have filed in any jurisdiction any like
financing statement or amendment thereto if filed prior to the date hereof. 
Each U.S. Obligor authorizes Agent to file any financing statement that
indicates the U.S. Collateral as “all assets” or “all personal property” of such
U.S. Obligor, or words to similar effect, and ratifies any action taken by Agent
before the Closing Date to effect or perfect its Lien on any U.S. Collateral.

 

2.7          Power of Attorney.  Each U.S. Obligor hereby irrevocably
constitutes and appoints Agent (and all Persons designated by Agent) as such
U.S. Obligor’s true and lawful attorney (and agent-in-fact) for the purposes
provided in this Agreement.  Agent, or such Agent’s designee, may, only during
the existence of an Event of Default, without notice and in either its or a U.S.
Obligor’s name, but at the cost and expense of U.S. Obligors:

 

(a)           Endorse a U.S. Obligor’s name on any Payment Item or other
proceeds of U.S. Collateral (including proceeds of insurance) that come into
Agent’s possession or control; and

 

(b)           (i) Notify any Account Debtors of the assignment of their
Accounts, demand and enforce payment of Accounts, by legal proceedings or
otherwise, and generally exercise any rights and remedies with respect to
Accounts; (ii) settle, adjust, modify, compromise, discharge or release any
Accounts or other U.S. Collateral, or any legal proceedings brought to collect
Accounts or U.S. Collateral; (iii) sell or assign any Accounts and other U.S.
Collateral upon such terms, for such amounts and at such times as Agent deems
advisable; (iv) take control, in any manner, of any proceeds of U.S. Collateral;
(v) prepare, file and sign a U.S. Obligor’s name to a proof of claim or other
document in a bankruptcy of an Account Debtor, or to any notice, assignment or
satisfaction of Lien or similar document; (vi) receive, open and dispose of mail
addressed to a U.S. Obligor, and notify postal authorities to change the address
for delivery thereof to such address as Agent may designate; (vii) endorse any
Chattel Paper, Document, Instrument, invoice, freight bill, bill of lading, or
similar document or agreement relating to any Accounts, Inventory or other U.S.
Collateral; (viii) use a U.S. Obligor’s stationery and sign its name to
verifications of Accounts and notices to Account Debtors; (ix) use the
information recorded on or contained in any data processing equipment and
computer hardware and software relating to any U.S. Collateral; (x) make and
adjust claims under policies of insurance; (xi) take any action as may be
necessary or appropriate to obtain payment under any letter of credit or
banker’s acceptance for which a U.S. Obligor is a beneficiary; and (xii) take
all other actions as Agent deems appropriate to fulfill any U.S. Obligor’s
obligations under the Loan Documents.

 

3.             Representations, Covenants and Warranties of U.S. Obligors. Each
U.S. Borrower acknowledges and agrees that it is party to the Loan Agreement and
is bound by the representations, warranties and covenants contained therein. 
Each Guarantor acknowledges and agrees to be subject to,

 

9

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comply with, and be bound by the representations, warranties and covenants
contained in Sections 9 and 10 of the Loan Agreement to the extent, in the case
of such Guarantor, such representations, warranties and covenants, are
applicable or relate to such Guarantor either (i) specifically or (ii) as a U.S.
Obligor or a Subsidiary of a Borrower or U.S. Obligor generally.

 

In addition to the foregoing, each Guarantor hereby represents, covenants,
warrants, and agrees to and with Agent, for its benefit and the benefit of
Secured Parties, as follows:

 

(a)            Such Guarantor is an entity duly organized, validly existing and
in good standing under the laws of the jurisdiction indicated next to its name
on Exhibit A attached hereto, and the office at which such Guarantor maintains
its books and records is located at the location indicated next to its name on
Exhibit A attached hereto;

 

(b)           All risk of loss of its respective U.S. Collateral hereunder shall
be upon such Guarantor;

 

(c)            Such Guarantor shall keep its respective U.S. Collateral free and
clear from any and all Liens, except for the Liens granted hereunder to Agent
and other Permitted Liens, such term to be applicable mutatis mutandis to any
such Guarantor and its Property;

 

(d)           Such Guarantor shall not change its name or its state of
organization without having given Agent at least thirty (30) days prior written
notice;

 

(e)            Such Guarantor shall not change its principal place of business
or its chief executive office without having given Agent at least thirty (30)
days prior written notice;

 

(f)            Such Guarantor shall use, keep and maintain its respective U.S.
Collateral at its principal place of business as shown above, or such other
location where such Guarantor is otherwise authorized to do business;

 

(g)           Such Guarantor shall maintain insurance upon its respective U.S.
Collateral in accordance with the terms set forth in the Loan Agreement and the
other Loan Documents; and

 

(h)           Except as previously disclosed to the Agent, such Guarantor has
not within the last 5 years carried on business, trade as, been known as, used
or organized under any name other than the name appearing on the first page of
this Agreement.

 

4.             Rights and Remedies Upon Default.  Upon the occurrence and during
the continuation of any Event of Default, all of the Secured Obligations shall
become due and payable in accordance with the terms of the Loan Agreement. In
addition to the foregoing, upon the occurrence and during the continuance of any
Event of Default, Agent may in its discretion (and shall, upon the direction of
the Required Lenders) exercise from time to time the following rights and
remedies (without prejudice to the rights of Agent or any Secured Party to
enforce its claim against any or all U.S. Obligors):

 

(a)           All of the rights and remedies of a secured party under the UCC or
under other Applicable Law, and all other legal and equitable rights to which
Agent may be entitled under any of the Loan Documents, all of which rights and
remedies shall be cumulative and shall be in addition to any other rights or
remedies contained in this Agreement or any of the other Loan Documents, and
none of which shall be exclusive.

 

10

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(b)           The right to collect all amounts at any time payable to a U.S.
Obligor from any Account Debtor or other Person at any time indebted to such
U.S. Obligor.

 

(c)           The right to take immediate possession of any of the U.S.
Collateral, and to (i) require U.S. Obligors to assemble the U.S. Collateral, at
U.S. Obligors’ expense, and make it available to Agent at a time and place
designated by Agent which is reasonably convenient to U.S. Obligors and Agent,
and (ii) enter any premises where any of the U.S. Collateral shall be located
and to keep and store the U.S. Collateral on said premises until sold (and if
said premises be the Property of a U.S. Obligor, then such U.S. Obligor agrees
not to charge Agent for storage thereof).

 

(d)           The right to sell or otherwise dispose of all or any U.S.
Collateral in its then condition, or after any further manufacturing or
processing thereof, at public or private sale or sales, with such notice as may
be required by Applicable Law, in lots or in bulk, for cash or on credit, all as
Agent, in its sole discretion, may deem advisable. Each U.S. Obligor agrees that
any requirement of notice to any U.S. Obligor of any proposed public or private
sale or other disposition of U.S. Collateral by Agent shall be deemed reasonable
notice thereof if given at least ten (10) days prior thereto, and such sale may
be at such locations as Agent may designate in said notice (except in the case
of U.S. Collateral which threatens to decline speedily in value or is of a type
customarily sold on a recognized market, in which case all notice is hereby
waived by each U.S. Obligor). Agent shall have the right to conduct such sales
on any U.S. Obligor’s premises, without charge therefor, and such sales may be
adjourned from time to time in accordance with Applicable Law. Agent shall have
the right to sell, lease or otherwise dispose of the U.S. Collateral, or any
part thereof, for cash, credit or any combination thereof, and Agent may
purchase all or any part of the U.S. Collateral at public or, if permitted by
law, private sale and, in lieu of actual payment of such purchase price, may set
off the amount of such price against their Secured Obligations. The proceeds
realized from the sale or other disposition of any U.S. Collateral shall be
applied in accordance with the terms of the Loan Agreement.  If any deficiency
shall arise, U.S. Obligors shall remain jointly and severally liable to Agent
and the Secured Parties therefor.

 

(e)           The right to the appointment of a receiver, without notice of any
kind whatsoever, to take possession of all or any portion of the U.S. Collateral
and to exercise such rights and powers as the court appointing such receiver
shall confer upon such receiver.

 

(f)            The right to exercise all of Agent’s rights and remedies under
the Mortgages with respect to any of the Real Estate.

 

Agent is hereby granted an irrevocable, non-exclusive license or other right to
use, license or sub-license (exercisable only during the existence of an Event
of Default and without payment of royalty or other compensation to any U.S.
Obligor or any other Person) any or all of each U.S. Obligor’s Intellectual
Property and all of each U.S. Obligor’s computer hardware and software trade
secrets, brochures, customer lists, promotional and advertising materials,
labels, and packaging materials, and any Property of a similar nature, in
advertising for sale, marketing, selling and collecting and in completing the
manufacturing of any U.S. Collateral, and each U.S. Obligor’s rights under all
licenses and all franchise agreements shall inure to Agent’s benefit.

 

Neither Agent nor any of the other Secured Parties shall be liable or
responsible to any U.S. Obligor in any way for the safeguarding of any of the
U.S. Collateral, for any loss or damage thereto (except for loss or damage
directly attributable to the gross negligence or willful misconduct of Agent
with respect to Collateral in its custody while in Agent’s actual possession),
for any diminution in the value thereof, or for any act or default of any
carrier, warehouseman, forwarding agency, or other person whomsoever, but the
same shall be at all times at each U.S. Obligor’s risk.

 

11

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All rights, remedies, powers, and privileges of Agent and the other Secured
Parties hereunder are cumulative and not alternative, and may be exercised
concurrently or seriatim, and are in addition to and not in lieu of any other
rights of Agent or Secured Parties under the Loan Documents, at law, in equity,
under statute, under any other agreement with any or all of the U.S. Obligors,
or otherwise.

 

5.             Waivers.  In addition to the other waivers contained herein and
in any other agreement between any or all of the U.S. Obligors and any or all of
Secured Parties, each U.S. Obligor hereby expressly waives, to the extent
permitted by law: demand, protest, notice of protest, notice of default or
dishonor, notice of payments and nonpayments, or of any default, release,
compromise, settlement, extension or renewal of all commercial paper,
instruments or guaranties at any time held by either any Secured Party on which
any U.S. Obligor may in any way be liable; notice or hearing in connection with,
and the requirement to post a bond as a condition to, the issuance of an
immediate writ of possession with respect to any of the U.S. Collateral (such
waiver being made as permitted by § 44-14-260(3)) of the Official Code of
Georgia; notice of any action taken by any Secured Party unless expressly
required by this Agreement or by law; and the benefits of Section 11-9-513 of
the Official Code of Georgia to the extent it may require Agent or any other
Secured Party to terminate any financing statement prior to the date on which
this Agreement is terminated.

 

6.             Indulgences Not Waivers.  Neither the failure nor any delay on
the part of any Secured Party to exercise any right, remedy, power or privilege
hereunder shall operate as a waiver thereof or give rise to any estoppel, nor be
construed as an agreement to modify the terms of this Agreement, nor shall any
single or partial exercise by any Secured Party of any right, remedy, power or
privilege preclude any other or further exercise by such Secured Party of the
same or of any other right, remedy, power, or privilege; nor shall any waiver by
any Secured Party of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver by a party hereunder shall be
effective unless it is in writing and signed by the party making such waiver,
and then only to the extent specifically stated in such writing.

 

7.             Notice.  All notices, requests and demands to or upon a party
hereto shall be in writing and sent by personal delivery against receipt,
overnight courier or certified or registered mail, return receipt requested, or
telecopier transmission and shall be deemed to have been validly served, given
or delivered when delivered against receipt, when presented at the noticed
party’s address or when received at the office of the noticed party by telecopy
transmission, as set forth below:

 

(A)      If to Agent:

 

Bank of America, N.A., as Agent

 

 

300 Galleria Parkway, Suite 800

 

 

Atlanta, Georgia 30339

 

 

Attention: Loan Administrative Manager

 

 

Telecopy No.: (404) 607-3276

 

 

 

(B)      If to U.S. Obligors:

 

Superior Essex Communications LP

 

 

6120 Powers Ferry Road

 

 

Suite 150

 

 

Atlanta, Georgia 30339

 

 

Attention: Chief Financial Officer

 

 

Telecopy No.: (770) 303-8892

 

(or to such other address as each party may designate for itself by like notice
given in accordance with this Section; provided, however, that any notice,
request or demand to or upon Agent by or from any U.S. Obligor shall not be
effective until received by Agent.

 

12

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8.             Governing Law.  This Agreement shall be governed in all respects
by, and construed in accordance with, the internal laws of the State of Georgia.

 

9.             Entire Agreement.  This Agreement constitutes and expresses the
entire understanding between the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained.  The express terms hereof control and supersede any
course of performance or usage of the trade inconsistent with any of the terms
hereof. Neither this Agreement nor any portion or provision hereof may be
changed, altered, waived, modified, supplemented, discharged, cancelled,
terminated, or amended orally or in any manner other than by an agreement in
writing signed by the parties hereto.

 

10.          Section Headings.  The section headings in this Agreement are for
convenience of reference only, form no part of this Agreement and shall not
affect its interpretation.

 

11.          Severability.  The provisions of this Agreement are independent of
and separable from each other. If any provision hereof shall for any reason be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect the validity or enforceability of any other provision hereof, but this
Agreement shall be construed as if such invalid or unenforceable provision had
never been contained herein.

 

12.          Successors and Assigns.  The rights, remedies, powers, and
privileges of Agent and the other Secured Parties hereunder shall inure to the
benefit of the successors and permitted assigns of Agent and the other Secured
Parties, and the duties and obligations of each U.S. Obligor hereunder shall
bind the successors and assigns of each U.S. Obligor.

 

13.          Term of Agreement.  This Agreement shall continue in full force and
effect until Full Payment of all of the Secured Obligations and termination of
the Loan Documents.

 

14.          Execution in Counterparts; Signatures.  This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which counterparts taken together shall
constitute but one and the same instrument. In proving this Agreement in any
judicial proceeding, it shall not be necessary to produce or account for more
than one such counterpart signed by the party against whom such enforcement is
sought. Any signature hereto delivered b y facsimile o r e-mail transmission
shall be deemed an original signature.

 

15.          Forum Selection.  Agent and each U.S. Obligor agree that the United
States District Court for the Northern District of Georgia, Atlanta Division,
and the Superior Court of Cobb County, Georgia, or, at the option of Agent, any
court in which Agent shall initiate legal or equitable proceedings and which has
subject matter jurisdiction over the matter in controversy, shall have
jurisdiction to hear and determine any claims or disputes between U.S. Obligors
and any Secured Party pertaining directly or indirectly to this Agreement or to
any matter arising therefrom.  The choice of forum set forth herein shall not be
deemed to preclude the enforcement of any judgment obtained in such forum or the
taking of any action by Agent under this Agreement to enforce same or to realize
upon any of the U.S. Collateral in any appropriate jurisdictions.

 

16.          Miscellaneous.  Time is of the essence of this Agreement.  This
Agreement shall not become effective until accepted by Agent, but each U.S.
Obligor hereby waives notice of such acceptance by Agent.  TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, EACH U.S.

 

13

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OBLIGOR AND AGENT HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT,
PROCEEDING OR COUNTERCLAIM CONCERNING THIS AGREEMENT.

 

17.          Amendment and Restatement.

 

(a)           This Agreement amends and restates the Existing Security
Agreement.  All rights, benefits, indebtedness, interests, liabilities and
obligations of the parties to the Existing Security Agreement and the
agreements, documents and instruments executed and delivered in connection with
the Existing Security Agreement, including, without limitation, the Existing
Loan Agreement (collectively, the “Existing Security Documents”) are hereby
renewed, amended, restated and superseded in their entirety according to the
terms and provisions set forth in this Agreement and the other Loan Documents. 
This Agreement does not constitute, nor shall it result in, a waiver of, or
release, discharge or forgiveness of, any amount payable pursuant to the
Existing Security Agreement or any indebtedness, liabilities or obligations of
any U.S. Obligor thereunder, all of which are renewed and continued and are
hereafter payable and to be performed in accordance with this Agreement and the
other Loan Documents.  Neither this Agreement nor any of the other Loan
Documents extinguishes the indebtedness or liabilities outstanding in connection
with the Existing Security Documents, nor do they constitute a novation with
respect thereto.

 

(b)           All security interests, pledges, assignments, and other Liens
previously granted by each U.S. Obligor pursuant to the Existing Security
Documents are hereby renewed and continued, and all such security interests,
pledges, assignments and other Liens shall remain in full force and effect as
security for the Secured Obligations.

 

(c)           Without limiting the generality of the foregoing, nothing
contained herein shall amend, modify, interrupt, extinguish or nullify any grant
of a security interest by any Borrower in the U.S. Collateral set forth herein,
and all security interests, pledges, assignments and other liens previously
granted by Borrowers under the Existing Security Documents, including, without
limitation, the Existing Loan Agreement, are hereby renewed and continued and
shall remain in full force and effect as security for the Secured Obligations.

 

[Remainder of page intentionally left blank;

 

signatures commence on following page]

 

14

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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be signed,
sealed and delivered on the day and year first written above.

 

 

SUPERIOR ESSEX COMMUNICATIONS
LP

 

(“U.S. Obligor”)

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ESSEX GROUP, INC.

 

(“U.S. Obligor”)

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

SUPERIOR ESSEX HOLDING CORP.

 

(“U.S. Obligor”)

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

SE COMMUNICATIONS GP INC.

 

(“U.S. Obligor”)

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signatures continue on following page.]

 

Amended and Restated Security Agreement

 

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

 

 

ESSEX INTERNATIONAL INC.

 

(“U.S. Obligor”)

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

ESSEX CANADA INC.

 

(“U.S. Obligor”)

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

ESSEX GROUP MEXICO INC.

 

(“U.S. Obligor”)

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

ESSEX MEXICO HOLDINGS, L.L.C.

 

(“U.S. Obligor”)

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

Accepted on                  , 2008:

 

 

 

 

BANK OF AMERICA, N.A.,
as Agent for the Secured Parties

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Amended and Restated Security Agreement

 

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EXHIBIT A

 

U.S. Obligor

 

Jurisdiction

 

Address

 

 

 

 

 

Superior Essex Communications LP

 

Delaware

 

6120 Powers Ferry Road

 

 

 

 

Suite 150

 

 

 

 

Atlanta, Georgia 30339

 

 

 

 

 

Essex Group, Inc.

 

Michigan

 

1601 Wall Street

 

 

 

 

Fort Wayne, Indiana 46802

 

 

 

 

 

Superior Essex Holding Corp.

 

Delaware

 

6120 Powers Ferry Road

 

 

 

 

Suite 150

 

 

 

 

Atlanta, Georgia 30339

 

 

 

 

 

SE Communications GP Inc.

 

Delaware

 

6120 Powers Ferry Road

 

 

 

 

Suite 150

 

 

 

 

Atlanta, Georgia 30339

 

 

 

 

 

Essex International Inc.

 

Delaware

 

1601 Wall Street

 

 

 

 

Fort Wayne, Indiana 46802

 

 

 

 

 

Essex Canada Inc.

 

Delaware

 

1601 Wall Street

 

 

 

 

Fort Wayne, Indiana 46802

 

 

 

 

 

Essex Group Mexico Inc.

 

Delaware

 

1601 Wall Street

 

 

 

 

Fort Wayne, Indiana 46802

 

 

 

 

 

Essex Mexico Holdings, L.L.C.

 

Delaware

 

1601 Wall Street

 

 

 

 

Fort Wayne, Indiana 46802

 

17

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EXHIBIT B

 

Commercial Tort Claims

 

None.

 

18

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