ex10-1



 



EXHIBIT 10.1



Execution Version



SECOND AMENDMENT TO FORBEARANCE

AND MODIFICATION AGREEMENT


     This SECOND AMENDMENT TO FORBEARANCE AND MODIFICATION AGREEMENT (this
“Agreement”) is entered into as of the 31st day of January, 2002, among Arguss
Communications, Inc., formerly known as Arguss Holdings, Inc. (the “Borrower”),
certain guarantors of the Borrower identified on the signature pages hereto
(the “Guarantors”), the Lenders (as defined below) and Bank of America, N.A.,
formerly NationsBank, N.A., as administrative agent for the Lenders (in such
capacity, the “Agent”). Capitalized terms used herein but not otherwise defined
shall have the meanings set forth, or incorporated, in the Forbearance
Agreement (as defined below).


RECITALS


     A.     The Borrower, the Agent and certain financial institutions (the
“Lenders”) are parties to that certain Credit Agreement dated as of March 19,
1999 (as amended and otherwise modified from time to time, the “Credit
Agreement”), pursuant to which the Lenders have made and may hereafter make
loans and advances and other extensions of credit to the Borrower.


     B.     The Borrower, the Guarantors, the Agent and the Lenders are parties to
that certain Forbearance and Modification Agreement dated as of November 13,
2001, as amended by that certain Amendment to Forbearance and Modification
Agreement and Waiver dated as of December 26, 2001 (as further amended and
otherwise modified from time to time, the “Forbearance Agreement”), pursuant to
which the Agent and the Lenders agreed to temporarily forbear from exercising
their rights and remedies arising from the Acknowledged Events of Default
pursuant to the terms and conditions set forth therein.


     C.     Certain additional Events of Default, other than the Acknowledged Events
of Default, exist under the Credit Agreement arising from the Borrower’s
failure to comply with the financial covenants set forth in Section 6.10(a),
(b) and (c) of the Credit Agreement, in each case for the applicable period
ending December 31, 2002 (the “Additional Events of Default”).


     D.     The Borrower has entered into that certain Agreement and Plan of Merger
dated as of January 7, 2002 (the “Merger Agreement”) with Dycom Industries,
Inc. (“Dycom”) and Troy Acquisition Corp., pursuant to which Dycom would
acquire all of the outstanding equity of the Borrower.


     E.     The Borrower has requested that the Agent and the Lenders agree to (i)
forbear from exercising any rights and remedies arising from the Additional
Events of Default and (ii) extend the Forbearance Period until April 30, 2002
to allow the Borrower time to consummate the transactions contemplated by the
Merger Agreement.


     F.     The Agent and the Lenders have agreed to do so, but only pursuant to the
terms and conditions set forth herein.


 







 



     NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:


     1.     Estoppel, Acknowledgement and Reaffirmation. As of January 23, 2002,
the total outstanding principal amount of Revolving Loans was not less than
$51,000,000, the undrawn portion of the Stated Amount of all outstanding
Letters of Credit was $3,000,000 and the total outstanding principal amount
under the Term Loan was not less than $10,750,000, which amounts constitute
valid and subsisting obligations of the Borrower to the Lenders that are not
subject to any credits, offsets, defenses, claims, counterclaims or adjustments
of any kind. The Borrower and the Guarantors hereby acknowledge their obligations
under the Loan Documents and reaffirm that each of the liens and security
interests created and granted in or pursuant to the Loan Documents are valid
and subsisting and that this Agreement shall in no manner impair or otherwise
adversely effect such liens and security interests.


     2.     Amendments to Forbearance Agreement




		
	 	        (i)  The definition of “Forbearance Termination Event” set forth in
Section 3 of the Forbearance Agreement is hereby amended and restated in
its entirety to read as follows:




		
	 	“Forbearance Termination Event” shall mean the earliest to occur of:
(a) any Event of Default under any of the Loan Documents other than
the Acknowledged Events of Default; (b) any Default under any of the
Loan Documents, provided that a Default under the Loan Documents
shall constitute a Forbearance Termination Event hereunder only if
it remains uncured after the earlier of (i) the expiration of any
cure period provided under the applicable Loan Document, (ii) ten
(10) days from the date that the Default first existed, and (iii)
April 30, 2002; (c) a breach by the Borrower of any term or
condition of this Agreement; (d) consummation of the transactions
contemplated by the Merger Agreement; (e) termination of the Merger
Agreement; (f) the amendment of any material term of the Merger
Agreement, which amendment is material to the Lenders, without the
prior written consent of the Agent; and (g) April 30, 2002.




		
	 	        (ii)  The definition of “Acknowledged Events of Default” set forth in
Recital B to the Forbearance Agreement is hereby amended to include the
Additional Events of Default.



     3.     Interest. Notwithstanding anything to the contrary contained in
the Credit Agreement, effective January 15, 2002, the “Applicable Margin” for
all Base Rate Loans shall be 250 basis points per annum and the “Applicable
Margin” for all Eurodollar Loans shall be 350 basis points per annum.


     4.      Additional Covenants.


 







 




		
	 	        (a)  EBITDA. In lieu of complying with the financial covenants set
forth in Section 6.10 (b) and (c) of the Credit Agreement for the
applicable financial periods ending March 31, 2002, the Borrower shall
generate EBITDA of not less than $5,000,000 for each of the six month
periods ending (i) January 31, 2002, (ii) February 28, 2002 and (iii)
March 31, 2002.




		
	 	        (b)  Reporting. In addition to any existing reporting
requirements, the Borrower shall deliver to the Agent, within twenty (20) days of the
end of each calendar month beginning with the calendar month ending
January 31, 2002, a compliance certificate, executed by the Borrower’s
Principal Financial Officer, indicating the Borrower’s EBITDA for the
six month period then ended and in form otherwise reasonably acceptable
to the Agent.



     5.     Extension Fee. In consideration of the willingness of the Agent and
the Lenders to enter into this Agreement, the Borrower shall be obligated to
pay to the Agent, for the ratable benefit of the Lenders executing this
Agreement, an extension fee in amount equal to 50 basis points of each such
Lender’s current outstanding Commitment (the “Extension Fee”), which shall
be deemed fully earned on the effectiveness of this Agreement. Of the
Extension Fee, $100,000 shall be payable at closing of this Agreement, an
additional $100,000 shall be payable February 28, 2002, an additional
$100,000 shall be payable March 31, 2002, and the balance shall be payable
on April 30, 2002; provided, however, that (i) the entire unpaid amount of
the Extension Fee shall be immediately due and payable upon the occurrence
of a Forbearance Termination Event, except as set forth in clause (ii) of
this proviso, and (ii) in the event that all other obligations and
liabilities of the Borrower and the Guarantors to the Agent and the Lenders
under and in connection with the Loan Documents are satisfied in full, or
otherwise restructured on terms and conditions acceptable to the Lenders,
prior to the occurrence of a Forbearance Termination Event (or, in the case
of a Forbearance Termination Event arising exclusively from the consummation
of the transaction contemplated by the Merger Agreement, substantially
contemporaneously with such consummation), the Lenders shall waive any
portion of the Extension Fee that has not yet become payable as of the date
of such satisfaction.


     6.     Expenses. Upon demand therefor, the Borrower shall pay all
reasonable out-of-pocket expenses incurred by the Agent and Lenders
(including without limitation the reasonable fees and out-of-pocket expenses
of counsel) in connection with or related to the negotiation, drafting, and
execution of this Agreement ad the transactions contemplated hereby.


     7.     Conditions Precedent. As conditions precedent to the effectiveness
of this Agreement:




		
	 	        (a)  the Agent shall have received counterparts of this Agreement
duly executed by the Borrower and the Lenders;




		
	 	        (b)  the Borrower shall have reimbursed the Agent for the fees and
expenses of
its counsel billed through January 29, 2002 in the amount of
$16,205.52;



 








 





		
	 	        (c) the Agent shall have received a fully
executed copy of the Merger Agreement;




		
	 	        (d) the Agent shall have received (for the ratable benefit of the
Lenders executing this Agreement) $100,000 of the Extension Fee; and




		
	 	        (e) the Agent shall have received, for its own account, the fee
referred to in
that certain letter agreement dated as of the date hereof between the
Borrower and the Agent.



     8.     Representations and Warranties. The Borrower hereby represents and
warrants to
the Agent and Lenders that:




		
	 	        (a) after giving effect to this Agreement, other than the
Acknowledged Events of Default, no Default or Event of Default exists
under the Loan Documents;




		
	 	        (b) after giving effect to this Agreement, the representations and
warranties of the Borrower contained in Article IV of the Credit
Agreement are true, accurate and complete in all material respects on
and as of the date hereof to the same extent as though made on and as
of such date except to the extent such representations and warranties
specifically relate to an earlier date; and




		
	 	        (c) (i) the execution, delivery and performance by the Borrower of
this Agreement are within the Borrower’s corporate powers and have been
duly authorized by all necessary corporate action on the part of the
Borrower, (ii) subject to the effect of bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws relating
to or affecting creditors’ rights (including, without limitation,
preference and fraudulent conveyance or transfer laws), this Agreement
constitutes a legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms and (iii)
neither this Agreement, nor the execution, delivery or performance by
the Borrower hereof (A) violates any law or regulation, or any order or
decree of any court or Governmental Authority, (B) conflicts with or
results in the breach or termination of, constitutes a default under or
accelerates any performance required by, any material indenture,
mortgage, deed of trust, lease, agreement or other instrument to which
the Borrower is a party or by which the Borrower or any of its property
is bound, or (C) results in the creation or imposition of any lien upon
any of the Collateral.



     9.     Release. In consideration of the willingness of the Agent and the
Lenders to enter into this Agreement, the Borrower and each of the
Guarantors hereby release the Agent and the Lenders, and the offices,
employees, representatives, counsel, subsidiaries, affiliates, trustees and
directors of each, from any and all actions, causes of action, claims,
demands, damages and liabilities of whatever kind or nature, in law or in
equity, now known or unknown, suspected or unsuspected to the extent that
any of the foregoing arises from any action or failure to act on or prior to
the date hereof.


     10.     Reference to and Effect on Credit Agreement. Except as specifically
modified herein, the Forbearance Agreement and the other Loan Documents shall
remain in full force and


 







 




 effect. The execution, delivery and effectiveness of this Agreement shall
not operate as a waiver of any right, power or remedy of the Lenders or the
Agent under any of the Loan Documents, or constitute a waiver or amendment
of any provision of any of the Loan Documents, except as expressly set forth
herein.


     11.     Further Assurances. The Agent, the Lenders, the Guarantors and the
Borrower each agrees to execute and deliver, or to cause to be executed and
delivered, all such instruments as they may reasonably request to effectuate
the intent and purposes, and to carry out the terms, of this Agreement.


     12.     Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAW OF THE STATE OF MARYLAND
(WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS THEREOF); PROVIDED
THAT THE BORROWER, THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.


     13.     Miscellaneous.



		
	 	        (a) This Agreement shall be binding on and shall inure to the
benefit of the Borrower, the Guarantors, the Agent, the Lenders and
their respective successors and permitted assigns. The terms and
provisions of this Agreement are for the purpose of defining the
relative rights and obligations of the Borrower, the Guarantors, the
Agent and the Lenders with respect to the transactions contemplated
hereby and there shall be no third party beneficiaries of any of the
terms and provisions of this Agreement.




		
	 	        (b) Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.




		
	 	        (c) Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining
provisions of this Agreement.




		
	 	        (d) Except as otherwise provided in this Agreement, if any
provision contained in this Agreement is in conflict with, or
inconsistent with, any provision in the Loan Documents, the provision
contained in this Agreement shall govern and control.




		
	 	        (e) This Agreement may be executed in any number of separate
counterparts, each of which shall collectively and separately
constitute one agreement. Delivery of an executed counterpart of this
Agreement by telecopy shall be effective as an original and shall
constitute a representation that an original shall be delivered to the
Agent.



     14.     Entirety. This Agreement, the Forbearance Agreement and the other
Loan Documents embody the entire agreement between the parties and supersede
all prior agreements and understandings, if any, relating to the subject
matter hereof. This Agreement, the Forbearance


 






 




 Agreement and the other Loan Documents represent the final agreement
between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties.


[Remainder of Page Left Blank Intentionally]



 







 





     IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.



	 	 	 
	BORROWER:	 	
ARGUSS COMMUNICATIONS, INC.
	 
	 	 	
By: /s/ ARTHUR TRUDEL
	 	 	
Name: Arthur Trudel
	 	 	
Title:  VP & CFO
	 
	GUARANTORS:	 	
ARGUSS COMMUNICATIONS GROUP
	 
	 	 	
By: /s/ ARTHUR TRUDEL
	 	 	
Name: Arthur Trudel
	 	 	
Title: Vice Chairman
	 
	 	 	
ARGUSS SERVICES CORP.
	 
	 	 	
By: /s/ ARTHUR TRUDEL
	 	 	
Name: Arthur Trudel
	 	 	
Title: VP & CFO
	 
	 	 	
CONCEPTRONIC, INC.
	 
	 	 	
By: /s/ ARTHUR TRUDEL
	 	 	
Name: Arthur Trudel
	 	 	
Title: Vice President
	 
	 	 	
SCHENCK COMMUNICATIONS LIMITED
	 	 	
PARTNERSHIP
	 
	 	 	
By: /s/ ARTHUR TRUDEL
	 	 	
Name: Arthur Trudel
	 	 	
Title: Vice President



 







 




	 	 	 
	LENDERS:	 	
BANK OF AMERICA, N.A.,
	 	 	
as Agent and as a Lender
	 
	 	 	
By: /s/ DANIEL LANGELIER
	 	 	
Name: Daniel Langelier
	 	 	
Title: Senior Vice President



 







 




	 	 	 
	 	 	
SUNTRUST BANK
	 
	 	 	
By: /s/ GEORGE A. WAYS
	 	 	
Name: George A. Ways
	 	 	
Title: Managing Director



 







 




	 	 	 
	 	 	
NATIONAL CITY BANK
	 
	 	 	
By: /s/ KELLY L. MOYER
	 	 	
Name: KELLY MOYER
	 	 	
Title: VICE PRESIDENT



 







 




	 	 	 
	 	 	
FLEET NATIONAL BANK
	 
	 	 	
By: /s/ THOMAS J. LEVY
	 	 	
Name: Thomas J. Levy
	 	 	
Title: Vice President



 







 




	 	 	 
	 	 	
U.S. BANK, NATIONAL ASSOCIATION
	 
	 	 	
By: /s/ C. KIRK DYCHE
	 	 	
Name: C. KIRK DYCHE
	 	 	
Title: VICE PRESIDENT



 







 




	 	 	 
	 	 	
UNION BANK OF CALIFORNIA, N.A.
	 
	 	 	
By: /s/ JOEL STEINER
	 	 	
Name: Joel Steiner
	 	 	
Title: Vice President



 







 




	 	 	 
	 	 	
KEYBANK NATIONAL ASSOCIATION
	 
	 	 	
By:  /s/ MARK KLEINHAUS
	 	 	
Name: Mark Kleinhaus
	 	 	
Title: Vice Pres.