November 1, 2001
Protection One, Inc.
Protection One Alarm Monitoring, Inc.
000 X. Xxxxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
President and Chief Executive Officer
Ladies and Gentlemen:
This letter agreement confirms the terms on which Westar Industries,
Inc. ("Westar") has agreed to provide Protection One, Inc. and Protection One
alarm Monitoring, Inc. (collectively, "Protection One") management and financial
advisory services.
During the period of Westar's engagement under this letter (as
specified below), Westar will, if requested:
(a) review and analyze, in consultation with members of
management, the business, operations and financial condition of Protection One;
(b) review and analyze, in consultation with members of
management, Protection One's financial and strategic plans and business
alternatives;
(c) review and evaluate, in consultation with members of
management, Protection One's capital structure and potential financing and
refinancing alternatives;
(d) review and evaluate, in consultation with members of
management, strategies to reduce the amount of Protection One's outstanding
debt; and
(e) render such other similar or related financial and advising
services as may be requested from time to time by Protection One.
During the period of Westar's engagement, Westar will continue to seek
and obtain information regarding developments affecting Protection One in an
effort to stay current with respect to Protection One's business, operations,
financial condition and prospects. In addition, Westar will be available at
Protection One's request to meet with members of Protection One's management to
discuss strategic and financial alternatives and their financial implications.
As compensation for Westar's services hereunder, Protection One agrees
to pay Westar, in arrears within fifteen days following the end of each calendar
quarter beginning with the quarter ending March 31, 2002, an annual management
and financial advisory fee equal to .50 percent of Protection One's consolidated
total assets on the last day of the quarter.
Page 2
Payment of the fees contemplated hereby shall entitle Protection One to
use of Westar's Cessna Citation VII plane, or another aircraft designated by
Westar if such plane is no longer owned by Westar or is otherwise unavailable,
for 140 hours of flight time in each twelve-month period after the date of this
Agreement, subject to the payment of operating costs for the plane for the
flight time actually used. Protection One may purchase additional hours of use,
subject to availability, at the same hourly rate Westar allocates internally for
use of the plane.
The engagement of Westar under this letter agreement, and the payment
of the fees contemplated hereby, will continue so long as Westar owns at least a
majority of Protection One's outstanding capital stock.
In connection with this engagement, Westar is acting as an independent
contractor and not in any other capacity, with duties owing solely to Protection
One. All aspects of the relationship created by this agreement shall be governed
by and construed in accordance with the laws of the State of Delaware,
applicable to contracts made and to be performed therein.
Please confirm that the foregoing is in accordance with Protection
One's understanding by signing and returning to Westar the enclosed duplicate of
this letter.
Very truly yours,
WESTAR INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxx
-----------------
Xxxx X. Xxxxx
President
Accepted and agreed to as of the date first written above:
PROTECTION ONE, INC.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------
Xxxxxxx Xxxxxxxx
President and Chief Executive Officer
PROTECTION ONE ALARM MONITORING, INC.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------
Xxxxxxx Xxxxxxxx
President and Chief Executive Officer
