Document:

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN - SOUTHINGTON SAVINGS BANK

 

 

 

 

 

 

SOUTHINGTON SAVINGS BANK

 

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

(Effective December 21, 1998)

 

 

 

 

 

 

 

 

 

 

 

 

 

SOUTHINGTON SAVINGS BANK

 

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

 

Table of Contents

 

  
	
     Article
	
Page

	
1  
	
PURPOSE
	
1  

	
2  
	
DEFINITIONS
	
1  

	
3  
	
PARTICIPATION
	
3  

	
4  
	
TARGET BENEFIT
	
4  

	
5  
	
PAYMENT OF TARGET BENEFIT
	
5  

	
6  
	
PRE-RETIREMENT DEATH BENEFIT
	
6  

	
7  
	
VESTING
	
7  

	
8  
	
FUNDING
	
8  

	
9  
	
ADMINISTRATION
	
9  

	
10  
	
CLAIM PROCEDURE
	
10  

	
11  
	
ADOPTION BY EMPLOYER; OBLIGATIONS OF EMPLOYER
	
10  

	
12  
	
MISCELLANEOUS
	
10  

  

 

 

 

 

 

SOUTHINGTON SAVINGS BANK

 

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

ARTICLE 1

PURPOSE

          The purpose of the Southington Savings Bank Supplemental Executive Retirement Plan (the "Plan") is to provide certain designated executives with a supplemental retirement benefit in addition to the sum of (a) their retirement benefits provided under the Southington Savings Bank Defined Benefit Pension Plan ("Pension Plan") and the Southington Savings Bank Supplemental Retirement Plan, and (b) their Social Security benefits.  The Plan is not intended or designed to meet the qualification requirements of Section 401 of the Internal Revenue Code.  As of the Effective Date, Robert D. Morton is the only person eligible to participate in the Plan.

 

ARTICLE 2

DEFINITIONS

          When used herein with initial capital letters, each of the following terms shall have the corresponding meaning set forth below unless a different meaning is plainly required by the context in which the term is used:

          Section 2.01.  "Administrator" shall mean the Plan Administrator under the Pension Plan.

          Section 2.02.  "Board" shall mean the Board of Directors of Southington Savings Bank or Bancorp Connecticut, Inc., as applicable.

          Section 2.03.  "Change in Control" shall have the same meaning as provided in the Participant's employment agreement with the Employer.

          Section 2.04.  "Code" shall mean the Internal Revenue Code of 1986, as amended.

          Section 2.05.  "Committee" shall mean the Compensation Committee of the Board, or any subsequent committee of the Board that has primary responsibility for compensation policies.  In the absence of such a committee, "Committee" shall mean the Board or any committee of the Board designated by the Board to perform the functions of the Committee under the Plan.

          Section 2.06.  "Compensation" shall have the same meaning as provided in the Pension Plan, except that bonuses and other incentive payments shall be included as Compensation under this Plan, and the dollar maximum set by section 401(a)(17) of the Code, as amended, or any other Code section which replaces, or into which, such Code section is amended, shall not apply to this Plan.

          Section 2.07.  "Disability" shall have the same meaning as provided in the Pension Plan.

          Section 2.08.  "Early Retirement Date" shall have the same meaning as provided in the Pension Plan.

          Section 2.09.  "Effective Date" means December 21, 1998.

          Section 2.10.  "Employer" includes, individually and/or collectively as the context requires, Southington Savings Bank ("Bank"), Bancorp Connecticut, Inc. ("Bancorp"), and all other entities in which the Bank or Bancorp holds, directly or indirectly, more than a 50-percent ownership interest and that have approved and adopted this Plan pursuant to Article 11, whether or not an individual Employer directly compensates the Participant or the Participant appears on the payroll of such Employer.

          Section 2.11.  "Final Average Compensation" shall mean a Participant's highest average twelve-month Compensation earned during any 60 consecutive months (or lesser actual period of receiving Compensation) of employment preceding the calendar month in which the Participant's employment ends.  In determining a Participant's 60 consecutive months of highest average annual Compensation, periods during which the Participant was not receiving Compensation shall be disregarded.

          Section 2.12.  "Participant" shall mean an employee of the Employer who is eligible to participate in the Plan pursuant to Article 3.

          Section 2.13.  "Target Benefit" shall mean the benefit described in Article 4.

          Section 2.14.  "Years of Vesting Service" shall be the Participant's Years of Vesting Service under the Pension Plan.

 

ARTICLE 3

PARTICIPATION

          Each employee of the Employer specifically named and designated by the Board to be eligible to participate in the Plan shall be a Participant in the Plan.  As of the Effective Date, Robert D. Morton, is the sole Participant in the Plan.

 

ARTICLE 4

TARGET BENEFIT

          Section 4.01.  The Target Benefit a Participant shall be entitled to receive from the Employer under this Plan shall have a value equal to the excess, if any, of (a) over (b), where:

          (a)     Equals a lifetime benefit in an annual amount equal to sixty (60) percent of the Participant's Final Average Compensation, which benefit shall be reduced, if payment of the Target Benefit shall commence prior to the Participant's attainment of age 65, in accordance with the actuarial factors set forth in the Pension Plan applicable to retirement benefits of employees retiring on an Early Retirement Date, provided that no benefit reduction shall occur if payment is made on account of a Change in Control;

          (b)     equals the sum of (i) the annual benefit payable to the Participant under the Pension Plan, expressed in the normal form of benefit applicable to the Participant pursuant to the terms of the Pension Plan (whether or not such benefit is actually paid in such form) commencing at the same time as benefits hereunder, plus (ii)  the annual benefit payable to the Participant under the Southington Savings Bank Supplemental Retirement Plan, as determined under Section 2 of that plan, without any actuarial adjustment in the event benefits are paid in a form other than the applicable normal form of benefit under the Pension Plan, plus (iii) the annual Social Security benefit payable to the Participant by the federal government which commences at the same time as benefits hereunder.

          Section 4.02.  Notwithstanding the foregoing, if a Participant's employment terminates on account of his or her disability for which benefits are payable under the Employer's long-term disability plan, no Target Benefit shall be owing under this Plan to such Participant until such time that benefits to the Participant have ceased under the long-term disability plan.

          Section 4.03.  An eligible spouse, if any, of such Participant shall be entitled to receive a continuation of such benefit only to the extent provided in Articles 5 or 6.  No beneficiary under the Plan shall be permitted other than a surviving eligible spouse.

 

ARTICLE 5

PAYMENT OF TARGET BENEFIT

          Section 5.01.  A Participant's Target Benefit payments shall commence on the first day of the month following the later of (a) the date the Participant is vested in such Target Benefit pursuant to Article 7 of this Plan, and (b) the latest of the month in which the Participant's employment ends, the last month the Participant is paid liquidated damages provided for under the Participant's employment agreement with the Employer, and the last month in which the Participant receives severance payments from the Bank
payable for any reason, including but not limited to a Change in Control, as required by the Participant's employment agreement with the Employer, unless the Participant and the Administrator agree that such benefit shall commence at a later time.  In no event will a Participant or Beneficiary have a right to receive any Target Benefit payment nor shall the Employer have any obligation to make any such payment hereunder until the Participant becomes vested in the Target Benefit in accordance with Article 7 of the Plan. 

          Section 5.02.  The normal form in which a Target Benefit shall be paid is, for a Participant who is unmarried on the date on which benefit payments are to commence as determined above, monthly payments on the first day of each month for the life of the Participant only, and for a Participant who is married at such time, monthly payments on the first day of each month for the life of the Participant and after the Participant's death, monthly payments on the first day of each month to the Participant's surviving spouse for life (or until remarried, if earlier), each in an amount equal to 50 percent of the Participant's monthly payment.  To be entitled to a Target Benefit under the Plan, a spouse must be married to the Participant both on the date Target Benefit payments to the Participant commence and on the Participant's date of death (hereinafter referred to as a "Surviving Spouse").  The annual Target Benefit payable to a married Participant, while living, shall be equal to the annual Target Benefit that would be payable to such Participant if unmarried.

          Section 5.03.  Instead of the normal forms of benefit in Section 5.02, a Participant may elect to receive payment of his or her Target Benefit under the Plan in one of the optional forms of benefit available under the Pension Plan; provided, however, that any such optional form of benefit shall be the "Actuarial Equivalent," as such term is defined in the Pension Plan, of the Target Benefit that would be payable to the Participant in normal form if unmarried.  A Participant who is married on the date on which Target Benefit payments commence shall not be required to obtain the consent of his or her spouse to have his or her Target Benefit paid in a form of benefit other than the normal form.  Notwithstanding the foregoing, the Administrator shall have the discretion to pay Target Benefits on a quarterly or annual basis if, in the Administrator's opinion, the amount of a Participant's or a surviving Spouse's monthly Target Benefit would be insufficient to merit a monthly payment.

 

ARTICLE 6

PRE-RETIREMENT DEATH BENEFIT

          Section 6.01.  If a Participant in the Plan with respect to the Target Benefit should die after having become vested with respect to a Target Benefit but prior to the commencement of Target Benefit payments, in accordance with Article 5, and if such Participant's spouse is entitled to a death benefit under the Pension Plan, said spouse shall be entitled to receive from the Employer a death benefit in the form of monthly payments commencing on the first day of the month following the date of death and lasting for the spouse's life (or until remarried, if earlier).  The amount of such death benefit shall be determined solely with respect to the Participant's Target Benefit (without reduction for any payments made to the Participant on account of disability), and shall be equal to the Target Benefit that would have been payable in the normal form under Section 5.02 to such spouse as a Surviving Spouse if the Participant had retired on the day prior to his or her death.

          Section 6.02.  No death benefit with respect to a Target Benefit other than that set forth above shall be payable under this Plan if a Participant dies prior to the commencement of benefit payments hereunder.

 

ARTICLE 7

VESTING

          Section 7.01.  Except to the extent Section 7.02 otherwise provides, a Participant shall be vested and shall have a nonforfeitable right with respect to the Target Benefit upon the earliest to occur of the following:

          (a)     The Participant's death while an employee of the Employer;

          (b)     The Participant's disability while an employee of the Employer;

          (c)     The Participant's satisfying the definition of Early Retirement Date under the Pension Plan;

          (d)     A Change in Control after a Participant has completed five (5) Years of Vesting Service.

          Section 7.02.  Notwithstanding Section 7.01 above, if a Participant shall be terminated for cause, as defined in the Participant's employment agreement with the Employer, or otherwise performs acts of willful misconduct or gross negligence in a matter of material importance to the Employer, payments of the Target Benefit that thereafter would have been payable to the Participant or such Participant's spouse may, at the sole discretion of the Committee, be forfeited, and the Employer shall have no further obligation under this Plan to the Participant or such Participant's spouse.  

 

ARTICLE 8

FUNDING

          Benefits payable under this Plan shall be "unfunded," as that term is used in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of the Employee Retirement Income Security Act of 1974, as amended, with respect to unfunded plans maintained primarily for the purpose of providing deferred compensation to a select group of management of highly compensated employees, and the Administrator shall administer this Plan in a manner that will ensure that benefits are unfunded and that Participants will not be considered to have received a taxable economic benefit prior to the time at which benefits are actually payable hereunder.  Accordingly, the Employer shall not be required to segregate or earmark any of its assets for the benefit of Participants or their spouses or other beneficiaries, and each such person shall have only a contractual right against the Employer for benefits hereunder.  The rights and interests of a Participant under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge or encumbrance by a Participant or any person claiming under or through a Participant, nor shall they be subject to the debts, contracts, liabilities or torts of a Participant or anyone else prior to payment.

          The Employer may, but need not, set aside or invest funds, or establish a trust of any type, to meet its liability to a Participant under this Plan.  Title to and beneficial ownership of any assets, whether cash, investments, or otherwise, which the Employer may designate to pay the benefits described hereunder, shall at all times remain in the Employer, or with a trustee, and a Participant shall have no property interest whatsoever in any specific assets of the Employer or trustee.  Nothing contained in this Plan and no action taken pursuant to the provisions of this Plan shall create or be construed to create a fiduciary relationship between the Employer and a Participant.  To the extent a Participant has a right to receive a payment or payments under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Employer.

 

ARTICLE 9

ADMINISTRATION

          The Plan shall be operated under the direction of the Committee and administered by the Administrator.  The calculation of all benefits payable under the Plan shall be performed at the direction of the Administrator, subject to the review of the Committee in its discretion, and such calculations and the Committee's decisions in all other matters involving the interpretation or application of the Plan shall be final and binding on all persons.

 

ARTICLE 10

CLAIM PROCEDURE

          All claims for benefits under this Plan shall be determined under the claims procedure in effect under the Pension Plan on the date that such claims are submitted, except that the Administrator shall make initial determinations with respect to claims hereunder and the Committee shall decide appeals of such determinations.

 

ARTICLE 11

ADOPTION BY EMPLOYER; OBLIGATIONS OF EMPLOYER

          Benefits under this Plan shall, in the first instance, be paid and satisfied by the Bank.  If the Bank shall be dissolved or for any other reason shall fail to pay and satisfy such benefits, then Bancorp shall pay the benefits under the Plan.  If Bancorp shall be dissolved or for any other reason shall fail to pay and satisfy such benefits, then each other adopting Employer shall be jointly and severally liable for paying all of the benefits under the Plan.

 

ARTICLE 12

MISCELLANEOUS

          Section 12.01.  Amendment or Termination.  The Board may amend or discontinue the Plan at any time; provided, however, that no amendment or discontinuation shall diminish the Employer's obligation to provide any benefits accrued to the date of such amendment or discontinuation.  For purposes of the foregoing "benefits accrued" shall mean the value of a Participant's benefit under the Plan, as of the date of amendment or discontinuation of the Plan, with respect to the Target Benefit, based upon the Participant's Final Average Compensation, Years of Credited Service, pension plan benefit and projected Social Security benefits as of such date.  A Participant with an accrued but unvested benefit under the Plan as of the date of amendment or discontinuation of the Plan shall become vested with respect to such benefit upon such Participant's satisfaction of the requirements of Article 4, as the case may be.

          Section 12.02.  Pension Plan Benefit Adjustments.  Any amendment to a Participant's benefit under the Pension Plan after the payment of benefits commences under this Plan shall not affect the amount of the benefits under this Plan.  Furthermore, the provision of any additional benefits under the Pension Plan shall in no way result in any adjustment with respect to the benefits under this Plan.

          Section 12.03.  No Right to Continued Employment.

          (a)     Adoption of the Plan, the provisions of the Plan, and any action of the Board or Committee with respect to the Plan, shall not be held or construed to confer upon any Participant any right to continuation of employment by the Employer.

          (b)     The Employer reserves the right to terminate or otherwise discipline any Participant, or otherwise deal with any Participant, to the same extent as though the Plan had not been adopted.

          Section 12.04.  Taxes.

          (a)     The Bank or any other entity making a payment under the Plan shall have the right to deduct from all amounts distributed any taxes required by law to be withheld.

          (b)     A Participant should consult his or her own tax advisors concerning the personal tax consequences of being eligible for the Plan, and the tax treatment of distributions received under the Plan.

          Section 12.05.  Headings.  Headings are included in the Plan for convenience only and are not substantive provisions of the Plan.

          Section 12.06.  Applicable Law.  The interpretation of the provisions and the administration of the Plan shall be governed by the laws of the state of Connecticut.

Dated this 26th day of March, 1999, at Southington, Connecticut.

 

	 	 	
 SOUTHINGTON SAVINGS BANK

	
 		
	
 
	 	 
	
Witness:
	 	
By /s/ Walter J. Hushak                          

	
 
	 	 
	
 /s/ Judy Smith
	 	
 Its Chairman                               

	
 Judy Smith
	 	 
	
 
	 	 
	
 
	 	 
	 	 	
 BANCORP CONNECTICUT, INC.

	
 		
	
 
	 	 
	
Witness:
	 	
By/s/ Walter J. Hushak                           

	
 
	 	 
	
/s/ Judy Smith
	 	
 Its Chairman                               

	
Judy Smith
	 	 
	 	 	 

 

 

1999-First Amendment to the

Southington Savings Bank

Supplemental Executive Retirement Plan

 

          The Boards of Directors of Southington Savings Bank and Bancorp Connecticut, Inc. hereby amend the Southington Savings Bank Supplemental Executive Retirement Plan, effective as of such Plan's original effective date of December 21, 1998, as follows:

          1.     Section 4.01 of the Plan is deleted in its entirety and replaced with a new Section 4.01, as follows:

          Section 4.01.  The Target Benefit a Participant shall be entitled to receive from the Employer under this Plan shall have a value equal to the excess, if any, of (a) over (b), where:

  

          (a)     Equals a lifetime benefit in an annual amount equal to sixty (60) percent of the Participant's Final Average Compensation, which benefit shall be reduced, if payment of the Target Benefit shall commence prior to the Participant's attainment of age 65, in accordance with the actuarial factors set forth in the Pension Plan applicable to retirement benefits of employees retiring on an Early Retirement Date, provided that no benefit reduction shall occur if payment is made on account of a Change in Control;

          (b)     equals the sum of (i) the annual benefit payable to the Participant under the Pension Plan, expressed in the normal form of benefit applicable to the Participant pursuant to the terms of the Pension Plan (whether or not such benefit is actually paid in such form) commencing at the same time as benefits hereunder, plus (ii) the annual benefit payable to the Participant under the Southington Savings Bank Supplemental Retirement Plan, as determined under Section 2 of that plan, without any actuarial adjustment in the event benefits are paid in a form other than the applicable normal form of benefit under the Pension Plan, plus (iii) the annual benefit payable to the Participant from the pension plan or plans sponsored by his prior employer or employers, expressed in the normal form of benefit pursuant to the terms of such plan or plans, commencing at the same time as benefits hereunder, plus (iv) the annual benefit payable to the Participant, expressed as a life annuity, which is the actuarial equivalent of the value of the Participant's employer matching account in the Southington Savings Bank 401(k) Plan, plus (v) fifty percent (50%) of the annual social security benefit payable to the Participant by the federal government which commences at the same time as benefits hereunder.

  

2.     Except as amended above, the terms of the Plan currently in effect shall continue to apply unchanged.

 

        Dated this 17th day of June, 1999.

 

	
BANCORP CONNECTICUT, INC.
	
SOUTHINGTON SAVINGS BANK

 

 

 

	
By /s/ Walter J. Hushak

 

Its     Director
	
By /s/ Walter J. Hushak

 

Its     Chairman of the BoardFORBEARANCE AND MODIFICATION AGREEMENT - Exhibit 10(r)

 

 

FORBEARANCE AND MODIFICATION AGREEMENT

          This FORBEARANCE AND MODIFICATION AGREEMENT (this "Agreement") is entered into this the
7th day of November, 2001, between and 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 given to such terms in the Credit 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.     Certain Defaults and 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(b) and (c) of the Credit Agreement, in each case for the applicable period ending September 30, 2001 (collectively, the "Acknowledged Events of Default").

          C.     The Borrower has requested that the Agent and the Lenders (i) forbear from exercising certain rights and remedies arising from the Acknowledged Events of Default through and until December 31, 2001, (ii) continue to make Revolving Loans to the Borrower until such date, and (iii) amend the Credit Agreement in certain respects.

          D.     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 November
7, 2001, the total outstanding principal amount of Revolving Loans was not less than
$62,544,543.00 (which amount includes $3,000,000.00 in issued but undrawn Letters of Credit) and the total outstanding principal amount under the Term Loan was not less than
$12,500,000.00, 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.     Forbearance.  Subject to the terms and conditions set forth herein, the Agent and the Lenders agree that they shall, until the occurrence of a Forbearance Termination Event (as defined below), forbear from exercising their rights to (a) cease making Revolving Loans, and (b) accelerate the full outstanding balance of the Revolving Loans and the Term Loans, but only to the extent such rights arise exclusively as a result of the Acknowledged Events of Default; provided, however, that the Agent and the Lenders shall be free to exercise any or all of their rights and remedies arising on account of the Acknowledged Events of Default at any time upon or after the occurrence of a Forbearance Termination Event.

          3.     Forbearance Termination Events.  Nothing set forth herein or contemplated hereby is intended to constitute an agreement by the Agent or the Lenders to forbear from exercising any of the rights available to them under the Credit Agreement, the other Loan Documents, or applicable law (all of which rights and remedies are hereby expressly reserved by the Agent and the Lenders) upon or after the occurrence of a Forbearance Termination Event. As used herein, a "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) December 31, 2001; (c) a breach by the Borrower of any term or condition of this Agreement; and (d) December 31, 2001. The period from the Closing Date to (but excluding) the date that a Forbearance Termination Event occurs shall be referred to as the "Forbearance Period".

          4.     Aggregate Revolving Commitments.  The definition of "Aggregate Revolving Commitments" set forth in Section 1.1 of the Credit Agreement is amended and restated in its entirety to read as follows:

         "Aggregate Revolving Commitments" means $80,000,000, as such amount may be reduced from time to time pursuant to Sections 2.7 and 2.13.

          5.     Limitation on Revolving Loans.  Notwithstanding any provision of the Credit Agreement or of any other Loan Documents, through the occurrence of a Forbearance Termination Event the Borrower shall not be entitled to and shall not request Revolving Loans such that the sum of the aggregate principal amount of outstanding Revolving Loans would exceed $70,000,000.

          6.     No Eurodollar Loans.  Notwithstanding any provision of the Credit Agreement or of any other Loan Documents, each outstanding Eurodollar Loan shall be converted to a Base Rate Loan at the end of the current Interest Period, and the Borrower shall not be entitled to draw additional Eurodollar Loans, continue Eurodollar Loans or convert Base Rate Loans to Eurodollar Loans.

          7.     Interest. 

          (a)     Effective as of October 1, 2001, the definition of "Applicable Margin" set forth in Section 1.1 of the Credit Agreement is amended by deleting the chart set forth therein in its entirety and replacing it with the following new chart:

  

	
Base Rate Margin

(basis points per annum)

  	
Eurodollar Rate Margin

(basis points per annum)

  
	
200.0
	
444.0

  

 

          (b)     The definition of "Interest Payment Date" set forth in Section 1.1 of the Credit Agreement is amended and restated in its entirety to read as follows:

  
"Interest Payment Date" means the last day of each calendar month.

  

          8.     Reporting.

           (a)     Section 6.1 of the Credit Agreement is amended by deleting clause (b) thereof and restated it in its entirety to read as follows:

  

          (b)     as soon as available but in any event within twenty (20) days after the end of each fiscal month of the Borrower, its consolidating and consolidated balance sheet and related statements of earnings and cash flows as of the end of and for such fiscal month and the then elapsed portion of the fiscal year, setting forth in each case in comparative form (with respect to the consolidated balance sheets and related financial statements) the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by its Principal Financial Officer as presenting fairly in all material respects the financial position, results of operations and cash flows of the Borrower and its Consolidated Subsidiaries in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes.

  

           (b)     Section 6.1 of the Credit Agreement is further amended by deleting clause (h) thereof and adding the following new clauses (h), (i), (j), (k), (l) and (m) thereto:

  

          (h)     concurrently with each delivery of financial statements under clause (b) above, a report, in form reasonably acceptable to the Agent, listing the Borrower's accounts payable and accounts receivable for each operating division, on a customer by customer basis, and aging information therefor; 

          (i)     as soon as available but in any event within thirty (30) days after the end of each fiscal quarter of the Borrower, a current customer order backlog, by operating division, in form reasonably acceptable to the Agent (a "Backlog Report"); 

          (j)     as soon as available but in any event within thirty (30) days after end of each of fiscal month of the Borrower, a written narrative update, in form reasonably acceptable to the Agent, of any known changes to the most recently delivered Backlog Report regarding jobs with revenues in excess of $1,000,000; 

          (k)     as soon as available but in any event within fifteen (15) days after the end of each fiscal month of the Borrower, a rolling thirteen (13) week forecast of cash flows for the Borrower in a form reasonably acceptable to the Agent (the "Forecast"); 

          (l)     concurrently with each delivery of the Forecast under clause (k) above (except for the initial Forecast) a reconciliation, in form reasonably acceptable to the Agent, between actual cash flows for the prior fiscal month and projected cash flows for such fiscal month as set forth in the most recent previous Forecast, including a narrative discussion of any material variance; and 

          (m)     promptly following any request therefor, such other information regarding the operations and financial condition of the Borrower or any Subsidiary, or compliance with the terms of this Agreement, as the Agent may reasonably request.

  

          9.     No Acquisitions / No Distributions / Conceptronic Disposition.  Notwithstanding anything in the Credit Agreement to the contrary, the Borrower covenants and agrees that, without the express written consent of the Required Lenders, it shall not:

           (a)     make, or permit any Subsidiary to make, any Acquisitions, including without limitation Permitted Acquisitions; 

           (b)     make, or permit any Subsidiary to make, any Distributions; or

           (c)     Dispose of Conceptronic.

          10.     Forbearance Fee.  In consideration of the willingness of the Agent and the Lenders to enter into this Agreement, the Borrower shall pay to the Agent, for the ratable benefit of the Lenders, a fee (the "Forbearance Fee") in an amount equal to two-tenths of one percent (0.20%) of the Aggregate Commitments (as amended hereby).

          11.     Mortgaged Properties.

            (a)     Within fifteen days of the Closing Date, the Borrower shall execute and deliver to the Agent mortgages and/or deeds of trust (collectively, the "Mortgages"), in form acceptable to the Agent, with respect to the four parcels of real property identified on Schedule I attached hereto (collectively, the "Mortgaged Properties"); and

          (b)     Within thirty days of the Closing Date, the Borrower shall deliver to the Agent:

  

          (i)     ALTA mortgagee title insurance policies issued by a title insurance company acceptable to the Agent, in amounts not less than the respective amounts designated in Schedule I with respect to the Mortgages, assuring that each of the Mortgages creates a valid and enforceable mortgage lien on the applicable Mortgaged Property, having the priority set forth on Schedule I, which title insurance policies shall otherwise be in form and substance reasonably satisfactory to the Agent and shall include such endorsements as are reasonably requested by the Agent; and

          (ii)     evidence as to whether any Mortgaged Property is in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards (any such Mortgaged Property, a "Flood Hazard Property"), and if any Mortgaged Property is a Flood Hazard Property, whether the community in which such Mortgaged Property is located is participating in the National Flood Insurance Program, the Borrower's written acknowledgment of receipt of written notification from the Agent as to the fact that such Mortgaged Property is a Flood Hazard Property and as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program and copies of insurance policies or certificates of insurance of the Borrower evidencing flood insurance satisfactory to the Collateral Agent and naming the Collateral Agent as sole loss payee on behalf of the Senior Creditors.

          (iii)     copies of any existing appraisals and environmental site assessments in Borrower's possession relating to the Mortgaged Properties.

  

          (c)     At the request of the Agent made from time to time, Borrower shall (i) cause to be delivered to the Lenders copies of any additional appraisals and environmental site assessments in Borrower's possession relating to the Mortgaged Properties; and (ii) provide, upon reasonable notice, access to the Mortgaged Properties and to any books, records or other documents relating to the operation and management of the Mortgaged Properties which may be necessary in order to conduct appraisals and environmental site assessments. Such appraisals and site assessments shall be (i) performed by professionals satisfactory to the Bank, (ii) in form, substance and scope satisfactory to the Bank, and (iii) undertaken at Borrower's sole expense. 

          12.     Vehicle Titles.  Within thirty days of the Closing Date, the Borrower shall deliver to the Agent, or such third party designated by the Agent, original title documents for substantially all of the titled vehicles owned by the Borrower or any Subsidiary. The Agent agrees to release to the Borrower, or cause such third party designated by the Agent in possession of such title documents to release to the Borrower, the title documents for any vehicle being sold by the Borrower in the ordinary course of its business, provided that such sale is otherwise permitted by the Credit Agreement.

          13.     Cooperation with Consultants / Appraisers.  The Agent has retained FTI Policano & Manzo as a consultant (together with any replacement consultant(s) engaged from time to time by the Agent, the "Consultant") to assist it in evaluating the financial situation and operations of the Borrower. In addition, the Agent may retain certain appraisers to assist it in evaluating the Collateral. The Borrower agrees to (a) cooperate with the Consultant and any such appraisers and provide the Consultant and such appraisers reasonable access to all business records and -appropriate personnel of the Borrower to facilitate their review and analysis, and (b) reimburse the Agent for all reasonable fees and expenses of the Consultant and any such appraisers when due. 

          14.     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 and of any Consultant) in connection with or related to the negotiation, drafting, and execution of this Agreement and the transactions contemplated hereby.

          15.     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 the Agent's counsel billed through October 31, 2001;

          (c)     the Borrower shall have paid the Forbearance Fee; 

          (d)     the Borrower shall have paid all interest accrued through the date hereof; 

          (e)     the Borrower shall have delivered to the Agent a certified perfection certificate in the form of that attached hereto as Exhibit A; and 

          (f)     the Borrower shall have delivered to the Agent such additional documents and information as reasonably requested by the Agent, including without limitation certified copies of the Borrower's articles of incorporation, bylaws, resolutions and certificates of good standing.

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

          (a)     other than the Acknowledged Events of Default, no Default or Event of Default exists under any of the Loan Documents on and as of the date hereof;

          (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) 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, provided that the Acknowledged Events of Default may constitute cross defaults under the agreements identified on Schedule II hereto, or (C) results in the creation or imposition of any lien upon any of the Collateral.

          17.     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 releases the Agent and the Lenders, and the officers, 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.

          18.     Reference to and Effect on Credit Agreement.  Except as specifically modified herein, the 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.

          19.     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.

          20.     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.

          21.     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.

          22.     Entirety.  This 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 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:                                                                               

Name:                                                                          

Title:                                                                            

	
     

  	
 

	
     

  	
 

	
GUARANTORS:
	
ARGUSS COMMUNICATIONS GROUP

 

By:                                                                               

Name:                                                                          

Title:                                                                             

  
	
     

  	
 

	
     

  	
 

	
     

  	
ARGUSS SERVICES CORP.

 

By:                                                                               

Name:                                                                          

Title:                                                                             

  
	
     

  	
 

	
     

  	
 

	
     

  	
CONCEPTRONIC, INC.

 

By:                                                                               

Name:                                                                          

Title:                                                                             

  
	
     

  	
 

	
     

  	
 

	
     

  	
SCHENCK COMMUNICATIONS LIMITED

 PARTNERSHIP

 

By:                                                                               

Name:                                                                          

Title:                                                                             

  
	
     

  	
 

	
     

  	
 

	
LENDERS:
	
BANK OF AMERICA, N.A.,

as Agent and as a Lender

 

By:                                                                               

Name:                                                                          

Title:                                                                             

  
	
     

  	
 

	
     

  	
 

	
     

  	
SUNTRUST

 

By:                                                                               

Name:                                                                          

Title:                                                                             

  
	
     

  	
 

	
     

  	
 

	
     

  	
FLEET BANK, N.A.

 

By:                                                                               

Name:                                                                          

Title:                                                                             

  
	
     

  	
 

	
     

  	
 

	
     

  	
KEYBANK NATIONAL ASSOCIATION

 

By:                                                                               

Name:                                                                          

Title:                                                                             

  
	
     

  	
 

	
     

  	
 

	
     

  	
UNION BANK OF CALIFORNIA

 

By:                                                                               

Name:                                                                          

Title:                                                                             

  
	
     

  	
 

	
     

  	
 

	
     

  	
NATIONAL CITY BANK

 

By:                                                                               

Name:                                                                          

Title:                                                                             

  
	
     

  	
 

	
     

  	
 

	
     

  	
FIRSTAR BANK, N.A.

 

By:                                                                               

Name:                                                                          

Title:                                                                             

  

 

 

Schedule I

(Mortgaged Properties)

 

  
	
Location
	
  	
Record Owner
	
  	
Priority

	 	
  	
 
	
  	
 

	
250 Fischer Ave.

Costa Mesa, CA 92626
	
  	
Can Am Construction
	
  	
First

	 	
  	
 
	
  	
 

	
8602 Maltby Road

Woodinville, WA 98072
	
  	
Schenck Communications Limited Partnership

  	
  	
First

	 	
  	
 
	
  	
 

	
2101 Dover Road

Epsom, NH 03234
	
  	
White Mountain Cable Construction
	
  	
Second

	 	
  	
 
	
  	
 

	
6 Post Road

Portsmouth, NH 03801
	
  	
Conceptronic, Inc.
	
  	
Third

  

 

 

 

Schedule II

(other agreements)

  

1.          That certain Loan Agreement, dated as of November 24, 1992 by and between the Granite State Economic Development Corporation and Conceptronic, Inc. 

2.          That certain Loan Agreement, dated as of May 2, 1995 by and between the City of Portsmouth, New Hampshire and Conceptronic, Inc.

3.          That certain Mortgage and Security Agreement, dated as of May 8, 1998, by and between Citizens Bank New Hampshire and White Mountain Cable Construction Corp.

 

 

 

 

Exhibit A

(form of perfection certificate)

(see attached)

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