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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 7, 1996
Commission File Number: 0-24780 Commission File Number: 33-73002-01
PROTECTION ONE, INC. PROTECTION ONE ALARM MONITORING, INC.
6011 Bristol Parkway 6011 Bristol Parkway
Culver City, California 90230 Culver City, California 90230
(Exact name of registrant as (Exact name of registrant as
specified in its charter) specified in its charter)
Delaware Delaware
(State or other jurisdiction (State or other jurisdiction
of incorporation or organization) of incorporation or organization)
93-1063818 93-1064579
(I.R.S. employer identification no.) (I.R.S. employer identification no.)
6011 Bristol Parkway 6011 Bristol Parkway
Culver City, California 90230 Culver City, California 90230
(Address of principal executive (Address of principal executive
offices, including zip code) offices, including zip code)
(310) 338-6930 (310) 338-6930
(Registrant's telephone number, (Registrant's telephone number,
including area code) including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 28, 1996, One Alarm Monitoring, Inc., a Delaware corporation
("Monitoring"), acquired all of the outstanding capital stock of Metrol
Security Services, Inc., a Delaware corporation ("MSS"), from The Buckey Family
Trust and the other existing stockholders of MSS (collectively, the "Sellers"),
pursuant to an Agreement for Purchase and Sale of Stock dated as of May 23,
1996, as amended (the "Purchase Agreement"), among MSS, the Sellers, Monitoring
and Protection One, Inc. ("POI").
MSS and its subsidiaries (collectively, "Metrol") sell, install,
service and monitor security alarm systems and provide guard and patrol
services to residential and commercial subscribers in Arizona and New Mexico.
At the closing of the sale (the "Closing"), Monitoring paid to the
Sellers $15,103,591 in cash, subject to certain post-closing adjustments, and
delivered to the Sellers 417,885 shares of POI's Common Stock (the "POI
Shares") having an agreed upon value of $6 million. In addition, at the Closing
Monitoring repaid an aggregate of $15,745,000 of Metrol's bank and other third
party debt.
Pursuant to the Purchase Agreement, the Sellers have agreed to
indemnify Monitoring against certain liabilities and obligations relating to
Metrol, including certain tax and employee claims. In accordance with the terms
of an Escrow Agreement entered into in connection with the Purchase Agreement,
$3 million of the cash portion of the purchase price has been placed in an
escrow to secure such indemnification obligations.
The cash portion of the purchase price for the Metrol stock and the
refinancing of Metrol's third party debt at the Closing was funded with
borrowings under Monitoring's revolving credit facility with Heller Financial,
Inc. as agent for itself, Banque Nationale de Paris and Merita Bank. The amount
of the purchase price was determined in arm's-length negotiations between
Monitoring and POI and the Sellers, and the acquisition was accounted for under
the purchase method of accounting.
As required by the Purchase Agreement, the offer and sale of the POI
Shares by the Sellers has been registered by POI under the Securities Act of
1933.
The Purchase Agreement, the Escrow Agreement and a Registration Rights
Agreement between POI and the Sellers relating to the registration of the POI
Shares are filed as exhibits to this report and are incorporated herein by this
reference.
ITEM 5. OTHER EVENTS
On June 7, 1996, the Registrants issued a press release announcing
that the maximum amount available for borrowing under the Registrants'
revolving credit facility (the "Revolving Credit Facility") had been increased
to $100 million, that the maturity date of such facility had been extended to
June 3, 2000 and that the terms of such facility had been otherwise amended. A
copy of such press release is filed as an exhibit to this report.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
The following financial statements, pro forma financial information
and exhibits are filed as a part of this Report.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
It is impracticable at this time to file the required financial
statements for the acquired business. Such statements will be filed as
soon as they become available, but in no event later than August 27,
1996.
(b) PRO FORMA FINANCIAL INFORMATION
It is impracticable at this time to file the required financial
statements for the acquired business. Such statements will be filed as
soon as they become available, but in no event later than August 27,
1996.
(c) EXHIBITS
2.1 Agreement to Purchase and Sell Stock dated as of May 23,
1996, among MSS, the persons named therein as the "Shareholders" (the
"Shareholders"), Monitoring and POI.(1)
2.2 Amendment No. 1 to Agreement dated as of June 28, 1996,
among MSS, the Shareholders, Monitoring and POI.(2)
2.3 Escrow Agreement dated May 31, 1996, among MSS, the
Shareholders, Monitoring, POI and First National Bank of Denver, N.A.
as the Escrow Agent.
99.1 Registration Rights Agreement dated as of June 28, 1996,
among POI and the Shareholders.
99.2 Press Release issued by POI and Monitoring on June 7, 1996.
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(1) Incorporated by reference to Exhibit 2.1 to Registration Statement
on Form S-3 (Commission File No. 33-5849) filed by Protection One,
Inc. with the Securities and Exchange Commission on June 12, 1996.
(2) Incorporated by reference to Exhibit 2.1 to Registration Statement
on Form S-3 (Commission File No. 33-5849) filed by Protection One,
Inc. with the Securities and Exchange Commission on June 12, 1996.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
each of the Registrants has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
PROTECTION ONE, INC.
PROTECTION ONE ALARM MONITORING, INC.
By: JOHN W. HESSE
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John W. Hesse
Executive Vice President
and Chief Financial Officer
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EXHIBIT 2.3
ESCROW AGREEMENT
This Escrow Agreement is entered into as of May 31, 1996, among those
parties named as "Shareholders" on the signature pages hereto ("Shareholders"),
Metrol Security Services, Inc., a Delaware corporation ("the Company"),
Protection One Alarm Monitoring, Inc., a Delaware corporation ("Buyer"),
Protection One, Inc., a Delaware corporation ("Parent"), and First Interstate
Bank of Denver, N.A., a national banking association, as escrow agent ("Escrow
Agent").
R E C I T A L S
WHEREAS, pursuant to the Agreement for Purchase and Sale of Stock of
Metrol Security Services, Inc. dated as of May 23, 1996 (the "Purchase
Agreement"), by and among Shareholders, the Company, Buyer and Parent, Buyer has
agreed to purchase from Shareholders, and Shareholders have agreed to sell,
assign, convey and transfer and deliver to Buyer, all of the issued and
outstanding capital stock of the Company (the "Stock");
WHEREAS, pursuant to the Purchase Agreement, Buyer has agreed to
deposit $500,000.00 (the "Deposit") with Escrow Agent contemporaneously with the
delivery of this Escrow Agreement;
WHEREAS, the purchase price for the Stock is subject to certain
post-closing adjustments, and Shareholders have made or given certain
indemnities to Buyer in the Purchase Agreement and agreed in the Purchase
Agreement to reimburse the Company for certain severance costs, and Shareholders
and Buyer have agreed that a portion of the purchase price for the Stock shall
be placed and maintained in an escrow account to be administered pursuant to the
Purchase Agreement and this Escrow Agreement;
WHEREAS, Shareholders have appointed Hannah C. Stone and Mary E. Schick
to act as the "Shareholders' Representatives" with respect to the administration
of this Escrow Agreement; and
WHEREAS, the parties desire to arrange for such escrow and appoint
Escrow Agent as escrow agent in accordance with the terms hereof.
A G R E E M E N T
In consideration of the mutual promises contained herein and for other
good and valuable consideration, receipt of which is hereby acknowledged, and
intending to be legally bound, the parties agree as follows:
ARTICLE 1. INTERPRETATION AND DEFINITIONS. This Agreement is being
executed and delivered pursuant to the Purchase Agreement and is the "Escrow
Agreement" referred to in Section 1.20 thereof. In the event of a conflict
between the terms of this Escrow Agreement and the Purchase Agreement, the terms
of this Escrow Agreement shall control.
ARTICLE 2. APPOINTMENT OF ESCROW AGENT. Escrow Agent is hereby
appointed to act as escrow agent in accordance with the terms hereof, and Escrow
Agent hereby accepts such appointment. Escrow Agent shall have all the rights,
powers, duties and obligations provided herein.
ARTICLE 3. DEPOSIT OF FUNDS. Concurrent with the execution and delivery
hereof, Buyer will deliver the Deposit to the Escrow Agent by wire transfer of
immediately available funds. On the Closing Date (as defined below), Buyer shall
deliver $2,500,000.00 to the Escrow Agent by wire transfer of immediately
available funds. Escrow Agent shall deposit the Deposit /and said $2,500,000.00
(together the "Deferred Payment") and hold the Deferred Payment, and any accrued
interest or earnings thereon, in a form of interest-bearing escrow account (the
"Escrow Account").
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The amount in the Escrow Account at any time, including accrued interest and
earnings on such amount, is referred to herein as the "Escrow Amount". Buyer and
the Shareholders' Representatives shall give Escrow Agent notice not less than
two (2) business days prior to Buyer's purchase of the Stock (the "Closing") of
the date on which the Closing will take place (the "Closing Date") and of the
Expiration Date (as defined below).
Escrow Agent shall invest and reinvest the Escrow Amount from time to
time in the name of Escrow Agent or its nominee as jointly instructed in writing
by Buyer and the Shareholders' Representatives, in one or more of the investment
vehicles listed on Schedule 3 hereto. If Buyer and the Shareholders'
Representatives fail to instruct Escrow Agent to invest or reinvest the Escrow
Amount or any portion thereof, the Escrow Agent shall invest the Escrow Amount
or portion thereof in the Pacifica Treasury Money Market Fund. Neither the
Escrow Agent nor Shareholders nor Buyer shall be liable or responsible in any
manner for any loss or depreciation resulting from any such investment or
liquidation, or for any costs in connection therewith, and all of said losses
and costs shall be borne by the Escrow Account. Escrow Agent shall (to the
extent permitted by the terms of the applicable investment) sell or redeem any
such investment as necessary to make all payments required pursuant to this
Escrow Agreement and shall not be responsible for any loss or penalty incurred
as a result of any such sale or redemption, except to the extent of any such
loss or penalty incurred solely as a result of Escrow Agent's negligence or
wilful misconduct.
ARTICLE 4. ACCRUED INTEREST ON THE ESCROW AMOUNT. Interest and earnings
accrued on and credited to the amount in the Escrow Account through the day
prior to the Closing Date shall, on the Closing Date, be paid to Shareholders as
additional purchase price for the Stock. Interest and earnings accrued on the
amount in the Escrow Account as of the Closing Date and thereafter shall be
added to the Escrow Amount and shall be held by Escrow Agent and shall be
available for any payment to be made by Escrow Agent under this Escrow
Agreement. Buyer and Shareholders acknowledge and agree that for Federal and
state income tax purposes, the amount earned on any investment of the Escrow
Amount, or portion thereof, is for the benefit of Shareholders in accordance
with their "Percentage Ownership" (as set forth on Schedule 4) and shall be
received by Escrow Agent as the nominee of Shareholders and that such amount
shall be the income of Shareholders in accordance with their Percentage
Ownership for federal and state income tax purposes. Escrow Agent is directed to
cause all tax reports and returns filed by the Escrow Agent to reflect that the
income earned on the Escrow Amount is the income of Shareholders in accordance
with their Percentage Ownership. Shareholders shall provide to Escrow Agent such
information regarding Shareholders as may be necessary to enable Escrow Agent to
make all tax filings, if any, in connection with this Escrow Agreement,
including but not limited to Shareholders' taxpayer identification numbers.
ARTICLE 5. PURPOSES OF ESCROW ACCOUNT. Buyer and Shareholders expressly
agree that the Escrow Amount shall be applied as follows:
5.1 In the event the Purchase Agreement is terminated prior to
the occurrence of the Closing (as defined in the Purchase Agreement)
pursuant to paragraph (a) of subsection 11.1.1, the Escrow Amount shall
be paid to Buyer in accordance with the provisions of Section 9.1
hereof.
5.2 In the event the Purchase Agreement is terminated prior to
the occurrence of the Closing pursuant to paragraph (b) of subsection
11.1.1 of the Purchase Agreement, the Escrow Amount shall be applied in
accordance with the provisions of Section 9.2 hereof.
5.3 In the event the Purchase Agreement is terminated prior to
the occurrence of the Closing pursuant to paragraph (c) of subsection
11.1.1 of the Purchase Agreement, the Escrow Amount shall be applied in
accordance with the provisions of Article 8 hereof.
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5.4 In the event the Purchase Agreement is terminated prior to
the occurrence of the Closing pursuant to paragraph (d) of subsection
11.1.1 of the Purchase Agreement, the Escrow Amount shall be applied in
accordance with the provisions of Section 9.4 hereof.
5.5 In the event the Closing occurs, the Escrow Amount shall be
applied (i) to pay Buyer the amount, if any, required to be paid to
Buyer pursuant to the first sentence of Section 2.5 of the Purchase
Agreement in accordance with the provisions of Article 6 hereof, and
(ii) to indemnify Buyer in accordance with the provisions of Article 13
of the Purchase Agreement and Article 7 hereof.
Buyer and Shareholders acknowledge that notwithstanding the provisions of this
Article 5, Escrow Agent shall make payments from the Escrow Account only in
accordance with the provisions of Articles 6, 7, 8 and 9 hereof.
ARTICLE 6. PURCHASE PRICE ADJUSTMENT. In the event the Closing occurs
and as a result of the final determination of the Financial Adjustment Schedule,
Buyer is entitled to recover a portion of the Deferred Payment pursuant to
Section 2.5 of the Purchase Agreement, Buyer and the Shareholders'
Representatives shall deliver to Escrow Agent a written notice stating the same,
the amount to be so paid to Buyer and that such notice is given pursuant to this
Article 6, and Escrow Agent shall immediately pay to Buyer from the Escrow
Amount the amount set forth in such certificate.
ARTICLE 7. ASSERTION OF BUYER'S CLAIMS. In accordance with the terms,
covenants, conditions and limitations of Article 13 and subsection 15.2.3 of the
Purchase Agreement, from time to time after the Closing and on or before that
day which is six (6) months after the Closing Date(1) (the "Expiration Date"),
Buyer may assert a claim (a "Buyer's Claim") for payment of (i) an indemnity
under Article 13 of the Purchase Agreement or (ii) an amount owed to the Company
under subsection 15.2.3 of the Purchase Agreement, and may demand satisfaction
of such Buyer's Claim from, and to the extent of, the Escrow Account.
7.1 Assertion of Buyer's Claims. To assert a Buyer's Claim, Buyer shall
deliver a written notice to each of Escrow Agent and the Shareholders'
Representatives, which notice shall state the amount of the Buyer's Claim in
dollars if such amount is ascertainable (a "Liquidated Buyer's Claim"), the
basis of such Buyer's Claim in general terms and the date such notice (such
notice a "Certificate of Buyer's Claim") is being sent. If Buyer cannot
ascertain the dollar amount of such Buyer's Claim (an "Unliquidated Claim"),
then to assert such Buyer's Claim, Buyer shall deliver to each of Escrow Agent
and the Shareholders' Representatives a written notice stating an estimate of
the anticipated maximum amount of such Buyer's Claim, the basis of such Buyer's
Claim in general terms and the date such notice is being sent (such notice, a
"Notice of Expected Buyer's Claim"). The date appearing on a Certificate of
Buyer's Claim or Notice of Expected Buyer's Claim as the date such notice was
sent is referred to herein as the "Buyer's Notice Date". Each Certificate of
Buyer's Claim and each Notice of Expected Buyer's Claim shall be expressly
stated to be such.
7.2. Settlement of Buyer's Claims. Buyer's Claims asserted in the
manner set forth in Section 7.1 hereof shall be settled in accordance with the
provisions of this Section 7.2.
7.2.1 Escrow Agent, without concerning itself with Buyer's
explanation as to the basis for any Liquidated Buyer's Claim, may
disburse the Escrow Amount or any portion thereof to Buyer to settle
any such Liquidated Claim:
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(1) For example, if the Closing Date is June 15, 1996, the last day of the six
(6) month period - and the Expiration Date - will be December 14, 1996.
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(a) At any time on or before the Expiration Date,
upon receipt by Escrow Agent of a written instruction executed
by the Shareholders' Representatives and Buyer; or
(b) On the tenth (10th) day after the Buyer's Notice
Date of a Liquidated Buyer's Claim delivered by Buyer pursuant
to Section 7.1, provided that the following conditions have
been satisfied:
(i) Buyer shall have delivered to Escrow Agent a
Certificate of Buyer's Claim;
(ii) Buyer shall have delivered to Escrow Agent
an affidavit of mailing or certification stating that
Buyer has delivered or transmitted for delivery to
the Shareholders' Representatives a Certificate of
Buyer's Claim with respect to such Liquidated Buyer's
Claim at least ten (10) days in advance of the
anticipated date of disbursement of the Escrow Amount
or portion thereof; and
(iii) Escrow Agent shall not have received from
the Shareholders' Representatives a written objection
to the disbursement (a "Shareholders' Objection").
Any Shareholders' Objection shall be captioned as
such and shall include a statement in reasonable
detail of Shareholders' basis for such objection, and
the Shareholders' Representatives shall deliver a
copy of any Shareholders' Objection to Buyer
concurrently with the delivery thereof to Escrow
Agent.
If the Shareholders' Representatives deliver to Escrow Agent a
Shareholders' Objection prior to the satisfaction of such Liquidated
Buyer's Claim from the Escrow Amount, such Liquidated Buyer's Claim (a
"Disputed Liquidated Buyer's Claim") shall remain pending until
resolved as provided herein, and Escrow Agent, without concerning
itself as to the grounds for such Shareholders' Objection, shall not
disburse the Escrow Amount or any portion thereof to satisfy such
Disputed Liquidated Buyer's Claim.
If after receiving a Shareholders' Objection, Escrow Agent
receives (i) the written consent of the Shareholders' Representatives
to the disbursement by Escrow Agent of the amount of such Disputed
Liquidated Buyer's Claim, (ii) a writing executed by Buyer and the
Shareholders' Representatives revising the amount of such Disputed
Liquidated Buyer's Claim and instructing Escrow Agent to disburse to
Buyer such revised amount, or (iii) a written notice from an arbitrator
selected pursuant to the provisions of Article 16 of the Purchase
Agreement stating that the Disputed Liquidated Buyer's Claim has been
resolved and stating the resolution of such Disputed Liquidated Buyer's
Claim, then Escrow Agent shall be authorized to and shall promptly
disburse the Escrow Amount or portion thereof in accordance with such
document.
7.2.2 Upon receipt by Escrow Agent of a written instruction of
settlement executed by both Buyer and the Shareholders' Representatives
that sets forth an agreement or settlement of an Unliquidated Buyer's
Claim, Escrow Agent shall be authorized to and shall promptly disburse
the Escrow Amount in accordance with such written instruction.
Any Unliquidated Buyer's Claim that is not settled by a joint
instruction of Buyer and the Shareholders' Representatives shall remain
pending until resolved pursuant to Section 7.3 hereof or, if earlier,
at such time as the amount of the Unliquidated Buyer's Claim becomes
fully liquidated and known. At such time as any Unliquidated Buyer's
Claim
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becomes fully liquidated and known, Buyer shall deliver to Escrow Agent
a Certificate of Buyer's Claim in respect thereof and such claim shall
be settled in accordance with the procedures for the settlement of
Liquidated Buyer's Claims set forth in subsection 7.2.1 hereof.
7.3. Resolution of Disputed Liquidated and Unliquidated Buyer's Claims.
Any Disputed Liquidated Buyer's Claim or any dispute regarding an Unliquidated
Buyer's Claim that cannot be resolved by Buyer and the Shareholders'
Representatives shall be finally resolved by arbitration in accordance with the
provisions of Article 16 of the Purchase Agreement ("Arbitration"). The
Shareholders' Representatives and Buyer shall instruct the arbitrator that the
arbitrator shall, upon resolving or settling any Disputed Liquidated Buyer's
Claim or Unliquidated Buyer's Claim pursuant to this Article 7, deliver written
notice of such resolution or settlement to Escrow Agent, the Shareholders'
Representatives and Buyer. If the arbitrator's resolution or settlement
concludes that Buyer is entitled to receive any payment from the Escrow Amount,
the arbitrator shall deliver written instructions to Escrow Agent to disburse to
Buyer the amount of such payment from the Escrow Amount. Escrow Agent shall,
within ten (10) days after receiving any such notice from the arbitrator,
disburse such amount to Buyer.
ARTICLE 8. Shareholder Claim for Breach. In the event the Purchase
Agreement is terminated by Shareholders prior to the occurrence of the Closing
pursuant to paragraph (c) of subsection 11.1.1 of the Purchase Agreement, then
on or prior to the tenth (10th) day after such termination, Shareholders may
assert a claim (a "Shareholders' Claim") for payment of any and all losses,
damages, costs and expenses incurred by Shareholders as a result of the one or
more breaches, defaults and/or failures of condition giving rise to such
termination to the extent of, and may demand satisfaction of such Shareholders'
Claim from, the Escrow Account, in the manner provided in Section 8.1 hereof.
8.1 Assertion of Shareholders' Claims. To assert a Shareholders' Claim,
the Shareholders' Representatives shall deliver a written notice to each of
Escrow Agent and Buyer, which notice shall state the amount of the Shareholders'
Claim in dollars if such amount is ascertainable (a "Liquidated Shareholders'
Claim"), the basis of such Shareholders' Claim in general terms and the date
such notice (such notice a "Certificate of Shareholders' Claim") is being sent.
If Shareholders cannot ascertain the dollar amount of such Shareholders' Claim
(an "Unliquidated Shareholders' Claim"), then to assert such Shareholders'
Claim, the Shareholders' Representatives shall deliver to each of Escrow Agent
and Buyer a written notice stating an estimate of the anticipated maximum amount
of such Shareholders' Claim, the basis of such Shareholders' Claim in general
terms and the date such notice is being sent (such notice, a "Notice of Expected
Shareholders' Claim"). The date appearing on a Certificate of Shareholders'
Claim or Notice of Expected Shareholders' Claim as the date such notice was sent
is referred to herein as the "Shareholders' Notice Date". Each Certificate of
Shareholders' Claim and each Notice of Expected Shareholders' Claim shall be
expressly stated to be such.
8.2. Settlement of Shareholders' Claims. Claims asserted by
Shareholders in the manner set forth in Section 8.1 hereof shall be settled in
accordance with the provisions of this Section 8.2.
8.2.1 Escrow Agent, without concerning itself with Shareholders'
explanation as to the basis for any Liquidated Shareholders' Claim, may
disburse the Escrow Amount or any portion thereof to Shareholders to
settle any such Liquidated Claim:
(a) At any time on or before the Expiration Date, upon
receipt by Escrow Agent of a written instruction executed by the
Shareholders' Representatives and Buyer; or
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(b) On the tenth (10th) day after the Shareholders' Notice
Date of a Liquidated Shareholders' Claim delivered by the
Shareholders' Representatives pursuant to Section 7.1, provided
that the following conditions have been satisfied:
(i) The Shareholders' Representatives shall have
delivered to Escrow Agent a Certificate of Shareholders'
Claim;
(ii) The Shareholders' Representatives shall have
delivered to Escrow Agent an affidavit of mailing or
certification stating that the Shareholders' Representatives
have delivered or transmitted for delivery to Buyer a
Certificate of Shareholders' Claim with respect to such
Liquidated Shareholders' Claim at least ten (10) days in
advance of the anticipated date of disbursement of the
Escrow Amount or portion thereof; and
(iii) Escrow Agent shall not have received from Buyer a
written objection to the disbursement (a "Buyer's
Objection"). Any Buyer's Objection shall be captioned as
such and shall include a statement in reasonable detail of
Buyer's basis for such objection, and Buyer shall deliver a
copy of any Buyer's Objection to the Shareholders'
Representatives concurrently with the delivery thereof to
Escrow Agent.
If Buyer delivers to Escrow Agent a Buyer's Objection prior to
the satisfaction of such Liquidated Shareholders' Claim from the Escrow
Amount, such Liquidated Shareholders' Claim (a "Disputed Liquidated
Shareholders' Claim") shall remain pending until resolved as provided
herein, and Escrow Agent, without concerning itself as to the grounds
for such Buyer's Objection, shall not disburse the Escrow Amount or any
portion thereof to satisfy such Disputed Liquidated Shareholders'
Claim.
If after receiving a Buyer's Objection, Escrow Agent receives
(1) the written consent of Buyer to the disbursement by Escrow Agent of
the amount of such Disputed Liquidated Shareholders' Claim, or (2) a
writing executed by Buyer and the Shareholders' Representatives
revising the amount of such Disputed Liquidated Shareholders' Claim and
instructing Escrow Agent to disburse to Shareholders such revised
amount, or (3) a written notice from an arbitrator selected pursuant to
the provisions of Article 16 of the Purchase Agreement stating that the
Disputed Liquidated Shareholders' Claim has been resolved and stating
the resolution of such Disputed Liquidated Shareholders' Claim, then
Escrow Agent shall be authorized to and shall promptly disburse the
Escrow Amount or portion thereof in accordance with such document.
8.2.2 Upon receipt by Escrow Agent of a written instruction of
settlement executed by the Shareholders' Representatives and Buyer that
sets forth an agreement or settlement of an Unliquidated Shareholders'
Claim, Escrow Agent shall be authorized to and shall promptly disburse
the Escrow Amount in accordance with such written instruction.
Any Unliquidated Shareholders' Claim that is not settled by a
joint instruction of the Shareholders' Representatives and Buyer shall
remain pending until resolved pursuant to Section 8.2 or, if earlier,
at such time as the amount of the Unliquidated Shareholders' Claim
becomes fully liquidated and known. At such time as any Unliquidated
Shareholders' Claim becomes fully liquidated and known, the
Shareholders' Representatives shall deliver to Escrow Agent a
Certificate of Shareholders' Claim in respect thereof and such claim
shall be settled in accordance with the procedures for the settlement
of Shareholder's Liquidated Claims set forth in Section 8.1 hereof.
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8.3. Resolution of Disputed Liquidated and Unliquidated Shareholders'
Claims. Any Disputed Liquidated Shareholders' Claim or any dispute regarding an
Unliquidated Shareholders' Claim that cannot be resolved by the Shareholders'
Representatives and Buyer shall be finally resolved by Arbitration. The
Shareholders' Representatives and Buyer shall instruct the arbitrator that the
arbitrator shall, upon resolving or settling any Disputed Liquidated
Shareholders' Claim or Unliquidated Shareholders' Claim pursuant to this Section
8.3, deliver written notice of such resolution or settlement to Escrow Agent,
the Shareholders' Representatives and Buyer. If the arbitrator's resolution or
settlement concludes that Shareholders are entitled to receive any payment from
the Escrow Amount, the arbitrator shall deliver written instructions to Escrow
Agent to disburse to Shareholders the amount of such payment from the Escrow
Amount. Escrow Agent shall, within ten (10) days after receiving any such notice
from the arbitrator, disburse such amount to Shareholders.
ARTICLE 9. TERMINATION. Escrow Agent shall hold the Escrow Amount in
escrow until the first to occur of the following dates:
9.1 the tenth (10) day after Escrow Agent receives notice from
Buyer and the Shareholders' Representatives that the Purchase Agreement
has been terminated prior to the Closing pursuant to paragraph (a) of
subsection 11.1.1 of the Purchase Agreement, whereupon Escrow Agent
shall immediately pay the entire Escrow Amount to Buyer and the escrow
shall terminate.
9.2 the tenth (10th) day after the Escrow Agent receives notice
from Buyer of the termination of the Purchase Agreement prior to the
Closing pursuant to paragraph (b) of subsection 11.1.1 of Purchase
Agreement, whereupon Escrow Agent shall immediately disburse the entire
Escrow Amount to Buyer and the escrow shall terminate; provided,
however, that if prior to such tenth (10th) day, the Escrow Agent
receives notice from the Shareholders' Representatives that
Shareholders dispute Buyer's right to so terminate the Purchase
Agreement, then the escrow shall continue until Escrow Agent receives
(i) the written consent of the Shareholders' Representatives to the
disbursement by Escrow Agent of the Escrow Amount to Buyer, or (ii) a
written notice from an arbitrator selected pursuant to the provisions
of Article 16 of the Purchase Agreement stating that the dispute has
been resolved and the resolution thereof, whereupon Escrow Agent shall
promptly disburse the Escrow Amount in accordance with such written
consent or written notice. Escrow Agent shall disburse the remaining
Escrow Amount, if any, to Buyer and the escrow shall terminate.
9.3 the tenth (10th) day after the Escrow Agent receives notice
from the Shareholders' Representatives or Buyer of the termination of
the Purchase Agreement prior to the Closing pursuant to paragraph (c)
of subsection 11.1.1 of Purchase Agreement, whereupon Escrow Agent
shall immediately disburse the entire Escrow Amount to Buyer and the
escrow shall terminate; provided, however, that if prior to such date,
a claim is made pursuant to Section 8.1 hereof, then the escrow shall
continue until five (5) days after all Liquidated and Unliquidated
Shareholders' Claims asserted on or prior to such tenth (10th) day have
been settled or resolved in accordance with the provisions of this
Escrow Agreement, and the full amount of all payments required thereby,
if any, have been disbursed to Shareholders. Immediately after such
time, Escrow Agent shall disburse the remaining Escrow Amount, if any,
to Buyer and the escrow shall terminate.
9.4 the tenth (10th) day after Escrow Agent receives notice of
the termination of the Purchase Agreement prior to the Closing pursuant
to paragraph (d) of subsection 11.1.1 of the Purchase Agreement from
either Buyer or the Shareholders' Representatives, whereupon Escrow
Agent shall immediately pay the entire Escrow Amount to Buyer and the
7
<PAGE> 8
Escrow shall terminate; provided, however, that if prior to such date,
the Escrow Agent receives notice from either Buyer or the Shareholders'
Representatives that the party or parties giving such notice dispute
the right of the other party or parties to so terminate the Purchase
Agreement, then the escrow shall continue until Escrow Agent receives
(1) the written consent of Buyer and the Shareholders' Representatives
to the disbursement by Escrow Agent of the Escrow Amount, or (2) a
written notice from an arbitrator selected pursuant to the provisions
of Article 16 of the Purchase Agreement stating that the dispute has
been resolved and the resolution thereof, whereupon Escrow Agent shall
promptly disburse the Escrow Amount in accordance with such written
consent or written notice and the escrow shall terminate.
9.5 the day after the Expiration Date; provided, however, that
if as of the Expiration Date any one or more Liquidated or Unliquidated
Buyer's Claim asserted prior to such date has not been settled or
resolved in accordance with the provisions of this Escrow Agreement or
has been so settled or resolved but the full amount of all payments
required thereby have not yet been disbursed, the escrow shall continue
until five (5) days after all Liquidated and Unliquidated Buyer's
Claims asserted on or prior to the Expiration Date by Buyer have been
so settled or resolved and the full amount of all payments required
thereby have been so disbursed. At such time as the escrow is
terminated pursuant to this Section 9.5, the Escrow Agent shall
disburse all amounts, if any, remaining in the Escrow Account, if any,
to Shareholders in accordance with their Percentage Ownership.
Notwithstanding the preceding provisions of this Article 9, if at any
time the Escrow Amount shall equal zero, then the escrow shall terminate at such
time.
ARTICLE 10. RECOVERY OF ATTORNEYS' FEES AND COURT COSTS. In the event
of any dispute or controversy between Buyer and Shareholders or the
Shareholders' Representatives arising out of this Agreement that cannot be
settled by such parties, such dispute or controversy shall be resolved by
Arbitration. In the event an arbitration claim, action or suit is brought by
Buyer, any Shareholder or the Shareholders' Representatives to enforce the terms
of this Agreement, the prevailing party shall be entitled to the payment of its
reasonable attorneys' fees and costs, as determined by the arbitrator or the
judge of the court. If Buyer is entitled to reimbursement of such fees, costs
and expenses, Buyer may recover them from the Escrow Amount, but Buyer's rights
and remedies shall not be limited to the Escrow Amount. To recover such amount
from the Escrow Amount, Buyer shall deliver to Escrow Agent a copy of the
arbitrator's decision with respect to the arbitration in which Buyer was the
prevailing party and the arbitrator's determination of Buyer's fees, costs and
expenses, and Escrow Agent shall disburse to Buyer the total amount thereof.
ARTICLE 11. ESCROW AGENT QUALIFICATIONS. Escrow Agent shall at all
times be a bank, savings and loan association or trust company in good standing,
organized and doing business under the laws of the United States or a state of
the United States, having combined capital and surplus of not less than One
Hundred Million Dollars ($100,000,000) and shall be authorized under the laws
governing its organization to exercise corporate trust powers and shall be
authorized under such laws and the laws of the State of Arizona to enter into
and perform this Escrow Agreement. If Escrow Agent shall at any time cease to
have the foregoing qualifications, Escrow Agent shall give notice of resignation
to Buyer and Shareholders as provided in Article 16 hereof, and Shareholders and
Buyer agree to thereupon promptly appoint a qualified successor escrow agent in
accordance with said Article 16.
ARTICLE 12. LIMITATIONS ON LIABILITY OF ESCROW AGENT.
12.1 Authorization; Liability. Escrow Agent may act upon any written
notice, certificate, instrument, request, waiver, consent, paper, or other
document that Escrow Agent in good faith
8
<PAGE> 9
reasonably believes to be genuine and to have been made, sent, signed,
prescribed, or presented by the proper person or persons. Escrow Agent shall not
be liable for any action taken or omitted by Escrow Agent in connection with the
performance of Escrow Agent's duties and obligations hereunder, except for its
own negligence or willful misconduct. Escrow Agent shall be under no obligation
to institute or defend any action, suit or legal proceeding in connection with
this escrow or this Escrow Agreement unless Escrow Agent is indemnified to its
satisfaction by the party or parties who desire that it undertake such action.
12.2 Notices; Review of Documents. Escrow Agent shall be under no
obligation or liability for failure to inform Buyer or Shareholders or the
Shareholders Representatives regarding any transaction or facts within Escrow
Agent's knowledge, even though the same may concern the matters described
herein, provided they do not prevent or interfere with Escrow Agent's compliance
with this Escrow Agreement, nor shall Escrow Agent be liable for the
sufficiency, correctness or genuineness as to form, manner of execution or
validity of any instrument deposited, nor as to identity, authority, or rights
of any person executing the same, except as above provided.
12.3 Conflicting Demands. Should Escrow Agent during or after the term
of the escrow receive or become aware of any conflicting demands or claims with
respect to the Escrow Amount or the rights of any of the parties hereto, or any
money or property deposited herein or affected hereby, Escrow Agent shall have
the right to discontinue any or all further acts on its part until such conflict
is resolved to its and the parties' satisfaction, and Escrow Agent shall have
the further right to commence or defend any action or proceeding for the
determination of such conflict. In the event Escrow Agent should file suit in
interpleader, Escrow Agent shall be fully released and discharged from all
further obligations under this Escrow Agreement.
12.4 Consultation with Counsel. Escrow Agent may consult with legal
counsel satisfactory to Escrow Agent in connection with any dispute, the
construction of any provision of this Escrow Agreement or the duties and
obligations of Escrow Agent under this Escrow Agreement.
ARTICLE 13. RELEASE OF ESCROW AGENT. The retention and distribution of
the Escrow Amount in accordance with the terms and provisions of this Escrow
Agreement shall fully and completely release Escrow Agent from any obligations
or liabilities assumed under this Escrow Agreement with respect to the Escrow
Amount.
ARTICLE 14. COMPENSATION OF ESCROW AGENT. Escrow Agent shall be
entitled to a fee of $7500 (which fee shall be paid upon signing this Agreement
and before the deposit of the Deposit into the Escrow Account) and to
reimbursement of out-of-pocket costs and expenses, including reasonable
attorneys' fees, suffered or incurred by Escrow Agent in connection with the
performance of its duties and obligations hereunder, including but not limited
to, any suit in interpleader brought by Escrow Agent. Buyer, on the one hand,
and the Shareholders, on the other, each shall be severally responsible for
one-half of such fees, costs and expenses, statements of which shall be mailed
by the Escrow Agent to Buyer and the Shareholders' Representatives. In the event
that either (i) Shareholders' portion of any such fees, costs and expenses or
(ii) Buyer's portion of any such fees and expenses of legal counsel incurred in
connection with the naming of Escrow Agent in any complaint or cross-complaint
filed in connection with the subject matter hereof is not paid within sixty (60)
days after the date of any such statement, the Escrow Agent may deduct such
unpaid portion from the Escrow Amount. Buyer shall reimburse the Escrow Account
for any amount deducted from the Escrow Account pursuant to the immediately
preceding sentence as a result of Buyer's failure to pay its share of the fees
and expenses of counsel described in such sentence.
ARTICLE 15. RESIGNATION AND REMOVAL OF ESCROW AGENT. Escrow Agent or
any successor to it may resign and be discharged of its duties and obligations
hereunder by delivering written notice to Buyer and the Shareholders'
Representatives specifying the effective date of such
9
<PAGE> 10
resignation, which date shall not be earlier than 30 days following the receipt
by Buyer and Shareholders of the notice of resignation. Such resignation shall
take effect on the date specified in the notice of resignation, unless a
successor escrow agent has been appointed in accordance with the provisions of
Article 16 hereof and has accepted such appointment, in which case such
resignation shall take effect immediately upon receipt by such successor escrow
agent of the Escrow Amount. Escrow Agent may be removed by the joint action of
Buyer and the Shareholders' Representatives, with or without cause, at any time
upon 60 days' prior written notice to Escrow Agent, which notice may be waived
by Escrow Agent.
Notwithstanding any resignation or removal of Escrow Agent pursuant
to this Article 15, Escrow Agent shall continue to serve in its capacity as
escrow agent until (i) a successor escrow agent is appointed in accordance with
the provisions of Article 16 hereof and has accepted such appointment, (ii) the
Escrow Amount has been transferred to and received by such successor escrow
agent and (iii) all amounts owed to the Escrow Agent pursuant to Article 14
hereof have been paid. Buyer and the Shareholders' Representatives shall
promptly take the necessary action to appoint a successor escrow agent in
accordance with the provisions of Article 16.
ARTICLE 16. APPOINTMENT OF SUCCESSOR ESCROW AGENT. If at any time
Escrow Agent shall resign, be removed or otherwise become incapable of acting as
escrow agent pursuant to this Escrow Agreement, or if at any time a vacancy
shall occur in the office of Escrow Agent for any other cause, a successor
escrow agent that meets the qualifications set forth in Article 11 shall be
jointly appointed by Buyer and the Shareholders' Representatives, by a written
instrument delivered to the successor escrow agent. If no successor escrow agent
has been appointed at the effective date of resignation or removal of Escrow
Agent or within 30 days after the time Escrow Agent became incapable of acting
or a vacancy occurred in the office of escrow agent, any party hereto may
petition a court of competent jurisdiction for an appointment of a successor
escrow agent and Escrow Agent shall have the right to refuse to make any
payments from the Escrow Amount until a successor escrow agent is appointed and
has accepted such appointment. Upon the appointment and acceptance of any
successor escrow agent hereunder, Escrow Agent shall transfer the Escrow Amount
to its successor. Upon receipt by the successor escrow agent of the Escrow
Amount, Escrow Agent shall be discharged from any continuing duties or
obligations under this Escrow Agreement, but such discharge shall not relieve
Escrow Agent from any liability incurred prior to such event, and the successor
escrow agent shall be vested with all rights, powers, duties and obligations of
Escrow Agent under this Escrow Agreement.
ARTICLE 17. PARTIES IN INTEREST. This Escrow Agreement shall be binding
upon and inure to the benefit of each party, and nothing in this Escrow
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever by, under or by reason of this
Escrow Agreement. Nothing in this Escrow Agreement is intended to relieve or
discharge the obligation of any third person to, or to confer any right of
subrogation or action over against, any party to this Escrow Agreement.
ARTICLE 18. NOTICES. Any notice or other communication hereunder must
be given in writing and either (a) delivered in person, (b) transmitted by
telefax or other telecopy mechanism (provided that any notice so given is also
mailed as provided in clause (c)) or (c) mailed by certified or registered mail,
postage prepaid, receipt requested, as follows:
If to Shareholders: Sandler Mezzanine General Partnership
or the Shareholders' 767 Fifth Avenue
Representatives 45th Floor
New York, New York 10153
Attention: Ms. Hannah C. Stone
Facsimile: 212-826-0280
10
<PAGE> 11
and
Ms. Mary E. Schick
630 E. Harmont Drive
Phoenix, Arizona 85020
Facsimile: None
with a copy to each of:
Edward J. O'Connell, Esq.
Dow, Lohnes & Albertson
1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
Facsimile: 202-776-2222
John G. Sestak, Jr., Esq.
Jennings, Strouss & Salmon, P.L.C.
2 North Central, Suite 1600
Phoenix, Arizona 85004-2393
Facsimile: 602-253-3255
If to the Company: Ms. Mary Schick
630 E. Harmont Drive
Phoenix, Arizona 85020
Facsimile: None
and
Mr. Michael G. Brady
6902 S. Butte Avenue
Tempe, Arizona 85283
Facsimile: None
with a copy to:
John G. Sestak, Jr., Esq.
Jennings, Strouss & Salmon, P.L.C.
2 North Central, Suite 1600
Phoenix, Arizona 85004-2393
Facsimile: 602-253-3255
If to Buyer or Parent: John E. Mack III, Vice President
Protection One Alarm
Monitoring, Inc.
6011 Bristol Parkway
Culver City, California 90230
Facsimile: 310-649-3855
and
11
<PAGE> 12
John W. Hesse,
Executive Vice President
Protection One, Inc.
3900 S.W. Murray Blvd.
Beaverton, Oregon 97005
Facsimile: 503-520-6099
with a copy to:
Alan L. Pepper, Esq.
Mitchell, Silberberg & Knupp LLP
11377 W. Olympic Blvd.
Los Angeles, California 90064
Facsimile: (310) 312-3798
If to Escrow Agent: First Interstate Bank of Denver, N.A.
633 Seventeenth Street (MAC4931-211)
21st Floor, North Tower
Denver, CO 80270
Attention: Bruce F. Lewis
Facsimile: (303) 293-5257
or to such other address or to such other person as either party shall have last
designated by such notice to the other party. Each such notice or other
communication shall be deemed received (i) if given by telecommunication, when
transmitted to the applicable number so specified in (or pursuant to) this
Article 18 and an appropriate answerback is received, or (ii) if given by any
other means, when actually delivered to the specified address.
ARTICLE 19. ASSIGNMENT; SUCCESSORS AND ASSIGNS. Neither this Escrow
Agreement nor any right or obligation hereunder may be assigned. This Escrow
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the successors and permitted assigns of the respective parties.
ARTICLE 20. MISCELLANEOUS.
20.1 Amendment. This Escrow Agreement may be amended only by an
agreement in writing of all parties. No waiver of any provision nor consent to
any exception to the terms of this Escrow Agreement shall be effective unless in
writing and signed by the party to be bound, and then only to the specific
purpose, extent and instance so provided.
20.2 Counterparts. This Escrow Agreement and any other agreement (or
document) delivered pursuant hereto may be executed in one or more counterparts
and by different parties in separate counterparts. All of such counterparts
shall constitute one and the same agreement and shall become effective when one
or more counterparts of this Escrow Agreement have been signed by each party and
delivered to the other parties.
20.3 Governing Law. This Escrow Agreement and the legal relations among
the parties shall be governed by and construed in accordance with the laws of
the State of Arizona applicable to contracts made and performed in such State
without regard to conflicts of law doctrines, except to the extent that certain
matters are preempted by federal law or are governed by the law of the
jurisdiction of organization of the respective parties.
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<PAGE> 13
20.4 Integration. This Escrow Agreement and the agreements referred to
herein constitute the entire agreement and understanding of the parties with
respect to the subject matter of this Escrow Agreement and supersede all prior
agreements and understandings with respect to such subject matter.
20.5 Severability. If any provision of this Escrow Agreement is held
invalid by any court, governmental agency or regulatory body, the other
provisions to the extent permitted by law shall remain in full force and effect.
To the extent permitted by applicable law, the parties hereby waive any
provision of law that renders any provision hereof prohibitive or unenforceable
in any respect.
20.6 Headings. The descriptive headings of the Articles and sections of
this Escrow Agreement are for convenience only and do not constitute a part of
this Escrow Agreement.
20.7 Distributions to Shareholders. All distributions to Shareholders
made hereunder shall be made pro rata with their Percentage Ownership as set
forth on Exhibit A attached hereto, unless otherwise directed by the
Shareholders' Representatives.
20.8 Notice of Arbitration. In the event that any arbitration
proceeding referenced herein is commenced, Buyer and the Shareholders'
Representatives shall give notice to the Escrow Agent of the same and of the
name or names of the arbitrator(s).
13
<PAGE> 14
IN WITNESS WHEREOF, each of the parties hereto has caused this
Escrow Agreement to be executed on the day and year first above written.
"COMPANY"
METROL SECURITY SERVICES, INC.
By: /s/ MICHAEL G. BRADY
- ---------------------------------------
Michael G. Brady
Chief Executive Officer
"SHAREHOLDERS"
THE COLLINS FAMILY PARTNERSHIP
By: /s/ DAVID S. COLLINS
- ---------------------------------------
David S. Collins, Trustee
GALBRI HOLDINGS, INC.
By: /s/ BRIAN O. N'GALLERY
- ---------------------------------------
Brian O. 'N Gallery, President
/s/ JACK KADIS
- ---------------------------------------
JACK KADIS
/S/ MARTIN C. MADDEN
- ---------------------------------------
MARTIN C. MADDEN
/s/ STEVEN E. WHEELER
- ---------------------------------------
STEVEN E. WHEELER
/S/ ARNOLD ZOUSMER
- ---------------------------------------
ARNOLD ZOUSMER
BHI ASSOCIATES IX, L.P.
By: Bariston Communications, Inc.
General Partner
By: /s/ JOHN B. FRIELING
---------------------------------------------
John B. Frieling, Vice President
14
<PAGE> 15
THE BUCKEY FAMILY TRUST
By: /s/ MARY SHICK
- ---------------------------------------
Mary Schick, Trustee
SANDLER MEZZANINE PARTNERS, L.P.
By: Sandler Mezzanine General Partnership, General Partner
By: MJM Media Corp., General Partner
By: /s/ MICHAEL J. MAROCCO
------------------------------------------------
Michael J. Marocco, President
SANDLER MEZZANINE FOREIGN PARTNERS
By: Sandler Mezzanine General Partnership, General Partner
By: MJM Media Corp., General Partner
By: /s/ MICHAEL J. MAROCCO
------------------------------------------------
Michael J. Marocco, President
SANDLER MEZZANINE T-E PARTNERS, L.P.
By: Sandler Mezzanine General Partnership, General Partner
By: MJM Media Corp., General Partner
By: /s/ MICHAEL J. MAROCCO
------------------------------------------------
Michael J. Marocco, President
"BUYER"
PROTECTION ONE ALARM MONITORING, INC.
By: /s/ JAMES M. MACKENZIE, JR.
- ---------------------------------------
James M. Mackenzie, Jr.
President
"PARENT"
PROTECTION ONE, INC.
By: /s/ JAMES M. MACKENZIE, JR.
- ---------------------------------------
James M. Mackenzie, Jr.
President
15
<PAGE> 16
"ESCROW AGENT"
FIRST INTERSTATE BANK OF DENVER, N.A.
By: /s/ BRUCE F. LEWIS
---------------------------------------
Its: Vice President
---------------------------------------
By: /s/ R. SHAWN HINTON
---------------------------------------
Its: Banking Officer
---------------------------------------
16
<PAGE> 17
ESCROW AGREEMENT
List of Schedules
Schedule 3 - Permitted Investments
Schedule 4 - List of Shareholders and Permitted Ownership
The Schedules described above have been omitted from this filing, but
will be furnished supplementally to the Securities and Exchange Commission upon
request.
<PAGE> 1
EXHIBIT 99.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
entered into as of June 28, 1996, by and among Protection One, Inc., a
Delaware corporation ("POI"), and the parties listed on the signature pages
hereto under the caption "Shareholders" (collectively the "Shareholders"), with
reference to the following facts:
A. Pursuant to that certain Agreement for Purchase and
Sale of Stock dated May 23, 1996 (the "Stock Purchase Agreement"), POI (i)
concurrently with the execution of this Agreement is issuing and selling to
Shareholders an aggregate of 417,885 shares (the "Registered Shares") of the
Common Stock, par value $.01 per share ("Common Stock"), of POI; and (ii) has
filed with the Securities and Exchange Commission a registration statement on
Form S-3 (Registration No. 333-5849) (as from time to time amended, the
"Initial Registration Statement") registering the offer and sale by
Shareholders from time to time of the Registered Shares.
B. The Stock Purchase Agreement contemplates that POI
and Shareholders will enter into this agreement to further define their
respective rights and responsibilities with respect to the Registered Shares.
NOW, THEREFORE, in consideration of the foregoing and of the
covenants and agreements contained in this Agreement, the parties hereto agree
as follows:
Article 1. Certain Definitions. As used in this
Agreement, the following terms have the following respective meanings:
1.1 Additional Registration Statement: If the number of
Registered Shares exceeds the number of shares of Common Stock registered
pursuant to the Initial Registration Statement, such additional registration
statement as shall be filed by POI to register the offer and sale by the
Shareholders of such additional Registered Shares.
1.2 Business Day: any day that is not a Saturday, a
Sunday or a bank holiday in California.
1.3 Commission: the Securities and Exchange Commission,
or any other Federal agency at the time administering the Securities Act.
1.4 Common Stock: the meaning specified in Recital A;
provided, however, that in the event there are any changes in the Common Stock
by way of stock split, stock dividend, combination or reclassification, or
through merger, consolidation or recapitalization, the term "Common Stock"
shall mean the Common Stock as so changed or the securities into which the
Common Stock is so converted, as applicable, so that the rights and privileges
granted hereby shall continue with respect to the Common Stock as so changed.
1.5 Exchange Act: the Securities Exchange Act of 1934, as
amended, or any similar Federal statute, and the rules and regulations of the
Commission thereunder, as they each may from time to time be in effect.
Reference to a particular section of the Securities Exchange Act of 1934 shall
include a reference to the comparable section, if any, of any such similar
Federal statute.
1.6 Indemnified Party: the meaning specified in Section
6.3.
<PAGE> 2
1.7 Indemnifying Party: the meaning specified in Section
6.3.
1.8 Initial Registration Statement: the meaning
specified in Recital A
1.9 Person: an individual, corporation, partnership,
business or other trust, limited liability company or other form of legal
entity.
1.10 Registered Shares: the meaning specified in Recital
A.
1.11 Registration Statement: Each of (i) the Initial
Registration Statement, and (ii) any Additional Registration Statement.
1.12 Securities Act: the Securities Act of 1933, as
amended, or any similar Federal statute, and the rules and regulations of the
Commission thereunder, as they each may from time to time be in effect.
References to a particular section of the Securities Act of 1933 shall include
a reference to the comparable section, if any, of such similar Federal statute.
1.13 Shareholder: each of the Persons listed on the
signature page hereto under the caption "Shareholders" and each Person to whom
the registration rights granted hereunder are transferred pursuant to Article 7
hereof; provided, however, that a Shareholder shall cease to be a Shareholder
at such time as such Person no longer owns of record any Registered Shares.
1.14 Stock Purchase Agreement: the meaning specified in
Recital A.
Article 2. Obligations of POI. POI shall:
2.1 Effectiveness of Initial Registration
Statement. Use its best efforts to cause the Initial Registration
Statement to be declared effective as soon as possible.
2.2 Additional Registration Statement. In the
event that the total number of Registered Shares exceeds the total
number of shares of Common Stock registered in the Initial
Registration Statement, prepare and file with the Commission a the
Additional Registration Statement, and use its best efforts to cause
the Additional Registration Statement to be declared effective as soon
as possible.
2.3 Amendments and Supplements. Use its best
reasonable efforts to prepare and file with the Commission all such
amendments and supplements to each Registration Statement and the
prospectus used in connection therewith as may be necessary to keep
the Registration Statement effective, and to comply with the
provisions of the Securities Act with respect to the disposition of
Registered Shares covered by such Registration Statement, in each
case for the period commencing on the effective date of such
Registration Statement and continuing until the earliest to occur of
the following dates or events: (i) as to the Initial Registration
Statement, October 1, 1998; (iii) as to any Additional Registration
Statement, the date that is two years after the effective date of that
registration statement; (iii) such Registration Statement shall have
become effective under the Securities Act and all of the Registered
Shares covered thereby shall have been disposed of pursuant to such
Registration Statement; (iv) all of the Registered Shares covered by
such Registration Statement shall have been distributed or be eligible
for distribution to the public pursuant to Rule 144 under the
Securities Act; or (v) all of the Registered Shares covered by such
Registration Statement shall have ceased to be outstanding; provided,
however, that the dates described in clauses (i) and (ii) above shall
be extended on a day-by-day basis for each day that Shareholders
refrain from selling Registered
2
<PAGE> 3
Shares at the request of POI or of an underwriter of Common Stock (or
other securities of POI) pursuant to the provisions hereof.
2.4 Copies of Registration Statement. Furnish to
each Shareholder such numbers of copies of each Registration Statement
and the prospectus contained therein (including each preliminary
prospectus, any summary prospectus and the final prospectus) as such
Shareholder may reasonably request in order to effect the sale of the
Registered Shares owned by such Shareholder, but only while POI is
required to cause such Registration Statement to remain effective and
usable.
2.5 Blue Sky Laws. Use all reasonable efforts to
register or qualify the offering of Registered Shares made pursuant to
a Registration Statement under the securities or blue sky laws of such
states as Shareholders shall reasonably request; provided, however,
that POI shall not be required in connection with this Section 2.4 to
qualify generally to do business as a foreign corporation under the
laws of any state in which POI is not then so qualified, or to file
any general consent to service of process or to take any other action
that would subject POI to general service of process in any state in
which POI is not then so subject.
2.6 Amendment of Prospectus. Notify each
Shareholder at any time when a prospectus included in a Registration
Statement is required under the Securities Act to be delivered of the
happening of an event that requires the making of a change in such
prospectus as then in effect, or such Registration Statement, in order
that such document(s) will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
and Shareholders thereupon shall immediately cease making offers and
sales of Registered Shares pursuant to such Registration Statement or
deliveries of the prospectus contained therein for any purpose, and if
requested by POI, shall return to POI all copies of such prospectus
not theretofore delivered by such Shareholders to third parties.
After securing such approvals as may be necessary, POI shall promptly
prepare, file with Commission and furnish to Shareholders revised
prospectuses or such supplements to or amendments of the prospectus as
POI may deem necessary, and following their receipt of the same,
Shareholders shall be free to resume making offers of the Registered
Shares.
2.7 Stop Orders. Notify each Shareholder of any
stop order or any similar proceeding initiated by any Federal or state
regulatory authority with respect to a Registration Statement.
2.8 Listing. Cause all Registered Shares to be
listed on each securities exchange, if any, on which the Common Stock
is then listed or with the National Association of Securities Dealers.
2.9 Rule 144. Use its best efforts to file with
the Commission all such reports and take all such other actions, as
are required to cause all of the conditions set forth in Rule 144(c)
to be satisfied with respect to the Registered Shares, and upon
request of any Shareholder, certify to such Shareholder in writing
that such conditions have been satisfied.
Article 3. Conditions to Obligations of POI. The
obligations of POI under Article 2 hereof are subject to the satisfaction of
each of the following conditions:
3.1 Information. Each Shareholder shall furnish to POI
such information regarding such Shareholder, its Registered Shares (and its
other holdings of POI's securities, if any) and the
3
<PAGE> 4
proposed methods of distribution of such Registered Shares, and shall execute
and deliver to POI such documents, as POI may request in order to permit POI to
comply with all applicable requirements of the Securities Act or any applicable
state securities law or to obtain acceleration of the effective date of a
Registration Statement. Without limiting the generality of the foregoing, each
Shareholder hereby represents and warrants that all information set forth in
the prospectus contained in the Initial Registration Statement as of the date
hereof with respect to such Shareholder, such Shareholder's Registered Shares
and other holdings of POI's securities (if any) and such Shareholder's proposed
methods of distributing the Registered Shares is complete and accurate.
3.2 Compliance with Agreement. Each Shareholder shall
have complied with all terms and conditions of this Agreement to be complied
with by such Shareholder.
Article 4. Allocation of Expenses. All discounts,
commissions or fees of underwriters, selling brokers, dealer managers or
similar securities industry professionals relating to the distribution of
Registered Shares, and all fees and expenses of separate counsel and
accountants for Shareholders, if any, shall be borne by Shareholders pro rata
with the number of Registered Shares owned by them. Except as otherwise
required by any Federal or state regulatory authority, POI shall bear all other
expenses incurred by POI in performing its obligations hereunder, including,
without limitation, registration and filing fees, fees and expenses of
complying with applicable state securities laws, fees and expenses incurred in
connection with the listing of Registered Shares on any securities exchange or
with the National Association of Securities Dealers, printing expenses, fees
and disbursements of counsel for, and independent certified public accountants
of, POI, and fees and expenses of any other party or parties retained by POI in
connection with a Registration Statement.
Article 5. Hold-Back Agreement. In the event that at
any time after February 1, 1997 POI elects to prepare and file with the
Commission a registration statement for an underwritten public offering of
Common Stock or securities convertible into or exercisable for Common Stock,
any and all Registered Shares shall be withheld from the market by Shareholders
and shall not be sold, offered for sale or otherwise transferred or disposed of
by Shareholders (other than to donees who agree to be similarly bound) for such
period beginning on the effective date of such registration statement as the
Board of Directors of POI determines in its good faith judgment is necessary in
order to successfully effect the public offering, as evidenced by a certificate
signed by the President or other chief executive officer of POI and delivered
to each Shareholder; provided, however, that such period shall in no event
exceed 120 days or such shorter period as may be applicable to directors and
officers of POI and that the Shareholders shall not be required to comply with
this provision more than once in any 12-month period.
Article 6. Indemnification. In the event of any
registration under the Securities Act of any Registered Shares pursuant to this
Agreement:
6.1 POI. POI hereby indemnifies and agrees to hold
harmless each Shareholder, the officers, directors and partners of each
Shareholder and each Person, if any, that controls (within the meaning of
Section 15 of the Securities Act) such Shareholder, to the full extent lawful,
from and against any and all claims, damages, losses, liabilities (joint or
several) and expenses (including reasonable costs of investigation and legal
fees and expenses) to which such Shareholder or other Person becomes subject,
under the Securities Act or the Exchange Act or otherwise, insofar as such
claims, damages, losses, liabilities (joint or several) and expenses arise out
of or are based upon (i) any breach by POI of any representation, warranty or
obligations of POI made or undertaken herein, (ii) any untrue statement or
alleged untrue statement of a material fact in a Registration Statement or the
preliminary or final prospectus included therein (including any amendment or
supplement to such prospectus, but in each case only to the extent such
prospectus is used within the period set forth in Section 2.2), or
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<PAGE> 5
(iii) any omission or alleged omission to state therein (in the case of the
prospectus, in the light of the circumstances under which it was made) a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that POI shall not be liable in any
such case to the extent that any such loss, claim, damage, liability, or
expense arises out of or is based upon:
6.1.1 Any such untrue statement or omission or
alleged untrue statement or omission which statement or omission was
made in reliance upon and in conformity with information furnished to
POI in a writing duly executed by or on behalf of any Shareholder and
stated to be specifically for use in connection with the preparation
of a Registration Statement or prospectus;
6.1.2 An untrue statement or alleged untrue
statement or omission or alleged omission made in any preliminary
prospectus (including any amendment or supplement thereto) if (i) such
Shareholder failed to send or deliver a copy of the definitive
prospectus (including any amendment(s) or supplement(s) thereto),
concurrently with or prior to the delivery to the person who purchased
from such Shareholder the Registered Shares that are the subject of
such loss, claim, damage liability or expense of the written
confirmation of such sale, and (ii) such definitive prospectus would
have corrected such untrue statement or omission or alleged untrue
statement or alleged omission; or
6.1.3 An untrue statement or alleged untrue
statement or omission or alleged omission made in the original
definitive prospectus, if such untrue statement or alleged untrue
statement or omission or alleged omission is corrected in an amendment
or supplement to such prospectus and if having previously been
furnished by or on behalf of POI with copies of the definitive
prospectus as so amended or supplemented, such Shareholder thereafter
fails to deliver such definitive prospectus as so amended or
supplemented to the Person who purchased from such Shareholder the
Registered Shares that are the subject thereof such loss, claim,
damage, liability or expense prior to or concurrently with such sale.
6.2 Shareholders. Shareholders, severally in proportion
to the number of Registered Shares originally owned by them and included in a
Registration Statement and not jointly, hereby indemnify and agree to hold
harmless POI, each of its directors, each other Person who controls (within the
meaning of Section 15 of the Securities Act) POI and each of POI's officers, to
the full extent lawful, from and against any and all claims, damages, losses,
liabilities (joint or several) and expenses (including reasonable costs of
investigation and legal fees and expenses) to which POI or any such other
Person becomes subject, under the Securities Act, the Exchange Act or
otherwise, insofar as such claims, damages, losses, liabilities (joint or
several) and expenses arise out of or are based upon (i) any breach by such
Shareholder of any representation, warranty or obligation of such Shareholder
made or undertaken herein, or (ii) any statement or alleged statement in or
omission or alleged omission from such Registration Statement or any prospectus
(preliminary or final) contained therein, or any amendment or supplement
thereto, if such statement or alleged statement or omission or alleged omission
was made in reliance upon and in conformity with information relating to such
Shareholder furnished to POI in a writing duly executed by or on behalf of such
Shareholder specifically for use in connection with such registration.
6.3 Indemnification Procedures. Each party entitled to
indemnification under this Article 6 (the "Indemnified Party") shall give
notice to the party or parties required to provide such indemnification (the
"Indemnifying Party") promptly after such Indemnified Party receives notice, or
otherwise has knowledge of, the commencement of any action or proceeding
involving a claim as to which indemnity may be sought hereunder; provided,
however, that the failure of any Indemnified Party
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<PAGE> 6
to give notice as provided herein shall not relieve any Indemnifying Party of
its obligations under this Article 6 except to the extent the failure to give
notice adversely affects the ability of such Indemnifying Party to defend the
referenced action or proceeding.
In case any action or proceeding shall be brought against any
Indemnified Party, the Indemnifying Party or Parties shall be jointly entitled
to assume the defense thereof with counsel approved by the Indemnified Party
(whose approval shall not be unreasonably withheld). Except as hereinafter
otherwise provided, after notice from the Indemnifying Party or Parties to such
Indemnified Party of the election of the Indemnifying Party or Parties to
assume the defense of such action or proceeding, the Indemnifying Party or
Parties shall not be liable to such Indemnified Party hereunder for any legal
or other expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof (other than reasonable costs of investigation and of
liaison with counsel so selected). The Indemnified Party may employ separate
counsel in any such action or proceeding and through such counsel may
participate in (but not control) the defense thereof, but the fees and expenses
of such separate counsel shall be paid by the Indemnified Party unless (i) the
Indemnifying Party or Parties shall have failed to assume the defense of such
action or proceeding or have failed to employ counsel reasonably satisfactory
to the Indemnified Party therein; or (ii) the named parties to such action or
proceeding (including any impleaded parties) include both the Indemnified Party
and any Indemnifying Party, and the Indemnified Party shall have been advised
in writing by counsel that there may be one or more legal defenses available to
such party that are different from or additional to those available to the
Indemnifying Party or Parties named therein (in which case, if the Indemnified
Party notifies the Indemnifying Party or Parties that the Indemnified Party
elects to employ separate counsel at the expense of the Indemnifying Party or
Parties, the Indemnifying Party or Parties shall not have the right to assume
the defense of such action or proceeding on behalf of the Indemnified Party;
provided, however, that the Indemnifying Party or Parties shall not, in
connection with any one such action or proceeding or separate but substantially
similar or related actions or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys at any time for
such Indemnified Party and any other Indemnified Parties, which firm shall be
designated to the Indemnifying Party or Parties in writing by the Indemnified
Party).
In the defense of any such claim, action or proceeding, no
Indemnifying Party shall, except with the consent of each Indemnified Party,
consent to the entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
of such claim or litigation, and no Indemnified Party shall consent to the
entry of any judgment or settle such claim or litigation without the prior
consent of the Indemnifying Party or Parties; provided, however, that in each
case such consent shall not be unreasonably withheld in light of all factors of
importance to the party granting or withholding such consent.
6.4 Contribution. If the indemnification provided for in
this Article 6 is for any reason unavailable to or insufficient to hold
harmless an Indemnified Party in respect of any loss, claim, damage, liability
or expense referred to in Sections 6.1 or 6.2 hereof, then in lieu of
indemnifying such Indemnified Party thereunder, each Indemnifying Party shall
contribute to the amount paid or payable to such Indemnified Party as a result
of such loss, claim, damage, liability or expense, in such proportion as is
appropriate to reflect the relative fault of POI, on the one hand, and
Shareholders, on the other hand, in connection with the statement(s) and/or
omission(s) that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of POI, on the one hand, and Shareholders, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by POI or
6
<PAGE> 7
by Shareholders, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue or misleading
statement or omission.
The amount paid or payable to an Indemnified Party as a result
of the losses, claims, damages or liabilities referred to in the first sentence
of this Section 6.4 shall be deemed to include any legal or other fees or
expenses incurred by such Indemnified Party in connection with investigating or
defending against any action or claim that is the subject of this Section 6.4.
Notwithstanding the foregoing provisions of this Section 6.4,
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution hereunder from
any person who is not guilty of such fraudulent misrepresentation.
POI and each of the other parties hereto agree that it would
not be just and equitable if contribution pursuant to this Section 6.4 were to
be determined by pro rata allocation (even if all sellers of Registered Shares
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in the first sentence of this Section 6.4.
Article 7. Transfer of Rights.
7.1 Transfers. The rights granted to each Shareholder
pursuant to this Agreement may be transferred by such Shareholder to another
signatory to this Agreement or to any other Person acquiring Registered Shares
then held of record by such transferor; provided, however, that the transferee
shall give to POI at the time of such transfer a notice stating the name and
address of the transferee and identifying the Registered Shares with respect to
which such rights are being assigned.
7.2 Obligations of Transferee. Any transferee (other
than an original signatory to this Agreement) to whom rights hereunder hereof
are transferred pursuant to this Article 7 shall, as a condition to such
transfer, deliver to POI a written instrument pursuant to which such transferee
agrees to be bound by the obligations imposed upon such transferee's transferor
hereunder to the same extent as if such transferee were an original signatory
hereto.
Article 8. Nominees for Beneficial Owners. In the event
that any Registered Shares are held by a nominee for the beneficial owner
thereof, the beneficial owner thereof may, at its election, be treated as the
holder of such Registered Shares for purposes of this Agreement. If the
beneficial owner of any Registered Shares so elects, POI in turn may require
assurances satisfactory to POI of such owner's beneficial ownership of such
Registered Shares.
Article 9. Restrictive Legends. Until the earlier of
(i) such time as a Registration Statement covering any particular Registered
Shares is declared effective or (ii) such Registered Shares are distributed to
the public in accordance with the provisions of Rule 144, each certificate
representing such Registered Shares shall be stamped or otherwise imprinted
with a legend in substantially the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be sold or transferred in the absence of such
registration or an exemption therefrom under such Act. The
holder of this certificate is entitled to the benefits of a
Registration Rights Agreement dated as of June 28, 1996,
with the issuer."
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Notwithstanding the foregoing provisions of this Article 9, upon the request of
(i) any holder of Registered Shares made as to the shares
covered by such Registration Statement at or after such time as such
Registration Statement is declared effective, or
(ii) a holder of Registered Shares which holder (a) is not an
affiliate (as such term is defined in Rule 144 under the Securities
Act) of POI, and (b) has not been an affiliate of POI during the three
months preceding such request, and which request is made after a
period of three years has elapsed since the later of the date such
Registered Shares were acquired from POI or an affiliate of the issuer
(computed in accordance with paragraph (d) of Rule 144),
POI shall issue and deliver to such holder, at no expense to such holder, a new
certificate representing such Registered Shares of like tenor not bearing the
first sentence of such legend.
Article 10. Miscellaneous.
10.1 Notices. All notices, requests, consents, demands
and other communications provided for by this Agreement shall be in writing and
shall be deemed to have been duly given or made (i) when delivered by hand or
by a courier service, (ii) when sent by telecopier if sent on a Business Day or
if so sent on a day that is not a Business Day, on the first Business Day
thereafter, or (iii) three Business Days after being sent by registered or
certified first-class mail, in each case addressed as follows:
10.1.1 If to a Shareholder, at such Shareholder's
address as it shall then appear in the books and records of POI; and
10.1.2 If to POI, initially at the address set forth
in the Stock Purchase Agreement, and thereafter at such other address
notice of which is given in accordance with the provisions of this
Section 10.1.
10.2 Entire Agreement. This Agreement embodies the entire
understanding and agreement among the parties hereto with respect to the
subject matter hereof and supersedes all prior discussions, negotiations,
understandings and agreements relating to such subject matter hereof.
10.3 Third Party Beneficiaries. This Agreement is
intended to, and shall, inure to the benefit only of the parties hereto and
their respective successors and permitted assigns.
10.4 Assignment. Neither this Agreement nor the rights or
obligations hereunder of any party hereto may be assigned, delegated or
otherwise transferred by any such party except as provided in Article 7 or, in
the case of POI, to any corporation or other Person into which POI merges or
consolidates or that acquires all or substantially all of the assets of POI.
10.5 Amendments. This Agreement may be amended,
supplemented or (except as hereinafter expressly provided to the contrary)
terminated, and the time for the performance of any of the covenants to be
performed by POI hereunder for the benefit of Shareholders may be extended, or
such performance may be waived, only by a writing executed by POI and those
Persons who at such time are the holders of a majority of the Registered
Shares.
10.6 Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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10.7 Headings. The headings of this Agreement have been
added for convenience only and shall not be used in any way to construe or
otherwise affect this Agreement.
10.8 Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of Delaware
applicable to agreements made and wholly performed in such state.
10.9 Damages. POI recognizes and agrees that Shareholders
will not have an adequate remedy if POI fails to comply with the provisions of
this Agreement regarding POI's obligation to register the Parent's Shares and
that damages will not be readily ascertainable, and POI expressly agrees that,
in the event of such failure, POI shall not oppose an application by
Shareholders requiring specific performance of any such provision or enjoining
POI from continuing to commit any such breach of any such provision.
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IN WITNESS WHEREOF, the undersigned have hereunto set their
hands as of the day and year first above written.
POI:
PROTECTION ONE, INC.
By: /s/ John E. Mack, III
------------------------------------------
John E. Mack, III
Vice President - Business Development
SHAREHOLDERS:
THE COLLINS FAMILY PARTNERSHIP
By: /s/ David S. Collins
------------------------------------------
David S. Collins, Trustee
GALBRI HOLDINGS, INC.
By: /s/ Brian O. 'N Gallery
------------------------------------------
Brian O. 'N Gallery, President
/s/ Jack Kadis
- ---------------------------------------------
JACK KADIS
/s/ Martin C. Madden
- ---------------------------------------------
MARTIN C. MADDEN
/s/ Steven E. Wheeler
- ---------------------------------------------
STEVEN E. WHEELER
/s/ Arnold Zousmer
- ---------------------------------------------
ARNOLD ZOUSMER
BHI ASSOCIATES IX, L.P.
By: Bariston Communications, Inc.
General Partner
By: /s/ John B. Frieling
----------------------------------------
John B. Frieling, Vice President
<PAGE> 11
THE BUCKEY FAMILY TRUST
By: /s/ Mary Schick
------------------------------------------
Mary Schick, Trustee
SANDLER MEZZANINE PARTNERS, L.P.
By: Sandler Mezzanine General Partnership, General Partner
By: MJM Media Corp., General Partner
By: /s/ Michael J. Marocco
-----------------------------------
Michael J. Marocco, President
SANDLER MEZZANINE FOREIGN PARTNERS
By: Sandler Mezzanine General Partnership, General Partner
By: MJM Media Corp., General Partner
By: /s/ Michael J. Marocco
-----------------------------------
Michael J. Marocco, President
SANDLER MEZZANINE T-E PARTNERS, L.P.
By: Sandler Mezzanine General Partnership, General Partner
By: MJM Media Corp., General Partner
By: /s/ Michael J. Marocco
-----------------------------------
Michael J. Marocco, President
11
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EXHIBIT 99.2
[PROTECTION ONE LH]
FOR FURTHER INFORMATION CONTACT:
Mr. John W. Hesse Executive Vice President
and Chief Financial Officer (503) 520-6010
or Montgomery W. Cornell, Treasurer (503) 520-6019
Protection One, Inc.
3900 S.W. Murray Boulevard
Beaverton, OR 97005
FOR IMMEDIATE RELEASE
PROTECTION ONE ANNOUNCES EXPANSION OF REVOLVING CREDIT FACILITY
Culver City, California and Portland, Oregon, June 7, 1996 - Protection
One (NASDAQ National Market symbol: ALRM) announced today it entered into an
amendment to the credit agreement governing its revolving credit facility.
Significant terms of the amendment include: (i) increasing the maximum amount
available under the revolving credit facility from $75 million to $100 million;
(ii) extending the term of the Revolving Credit Facility from November 3, 1997
to January 3, 2000; and (iii) reducing the interest rate on the Revolving
Credit Facility. As of May 31, 1996, borrowings under the Revolving Credit
Facility totaled approximately $51.9 million.
Protection One provides security alarm monitoring services and sells, installs,
and services security alarm systems for residential and small business
subscribers, substantially all of whom are located in the five western states
of Arizona, California, Nevada, Oregon and Washington.
