Exhibit 10.43


 


EXECUTION COPY


 


CREDIT FACILITY STANDSTILL AGREEMENT


 


CREDIT
FACILITY STANDSTILL AGREEMENT (this “Agreement”), dated as of
February 17, 2004, among POI Acquisition, LLC (“Acquisition”),
Protection One, Inc. (“POI”), Protection One Alarm Monitoring, Inc. (“POAM”)
and Network Multi-Family Security Corporation (the “Subsidiary Guarantor”).


 


RECITALS


 


WHEREAS,
POAM is the borrower under a Revolving Credit Agreement dated as of
December 21, 1998 (as renewed, extended, modified and amended from time to
time) (the “Credit Facility”), by and among Westar Industries, Inc. (“WII”),
POAM, as borrower, POI, as a guarantor, and the Subsidiary Guarantor, as
guarantor;


 


WHEREAS,
pursuant to the purchase agreement dated as of December 23, 2003 (the “Purchase
Agreement”), by and among Acquisition, WII and Westar Energy, Inc., WII’s
direct parent company (“WEI”), Acquisition agreed, among other things,
to assume all of WII’s rights and obligations under the Credit Facility;


 


WHEREAS, POAM has issued $250 million of 7-3/8% senior notes due
August 15, 2005 (the “Senior Notes”), $350 million 8-1/8% senior
subordinated notes due August 15, 2009 (the “Senior Sub Notes”) and
$166 million 13-5/8% senior subordinated discount notes due June 5, 2005
(the “Discount Notes”; together with the Senior Sub Notes, the “Subordinated
Notes”; and, together with the Senior Notes, the “Notes”);


 


WHEREAS,
pursuant to an assignment and assumption agreement dated February 17, 2004
(the “Assignment Agreement”), POAM consented to the assignment by WII of
its rights under the Credit Facility to Acquisition;


 


WHEREAS,
pursuant to Section 11.6(b) of the Credit Facility, the consummation of
the Transaction will result in a Default by POAM and shall permit the
Administrative Agent, upon the request of the Required Lenders, to exercise
at any time all of their rights and remedies and to commence enforcement and
collection actions under the Credit Facility, the other Loan Documents and
applicable law (such rights, remedies and actions, collectively, “Enforcement
Actions”), including without limitation, the right to declare to be
immediately due and payable the entire unpaid balance of the Obligation, or any
part thereof;


 


WHEREAS,
POI desires that Acquisition, in its dual capacities as Lender and Administrative
Agent under the Credit Facility following the consummation of the Transaction,
forbear from exercising certain remedies as a result of the Specified Defaults
(as defined below) for the period of time specified below;


 

















 


NOW
THEREFORE, in consideration of the premises contained herein and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties hereby agree as follows:


 


Section 1.  Definitions; Interpretation.


 


(a)
“Borrower Party” shall mean each of POAM, POI and the Subsidiary
Guarantor.


 


(b)
“Effective Time” shall mean the Closing (as defined in the Purchase
Agreement).


 


(c)
“Specified Defaults” shall mean the items set forth on Schedule 2
hereto as either being Defaults as of the Effective Time or Defaults that are
anticipated to occur or continue during the Debt Specified Period.


 


Capitalized terms not
otherwise defined in this Agreement shall have the meanings given thereto in
the Credit Facility.


 


Unless stated otherwise
herein, references in this Agreement to “Acquisition” shall be deemed to refer
to Acquisition in its capacity as Administrative Agent and Lender upon the
Effective Time.


 


Section 2.  Acknowledgment; Certain Matters Relating
to Remedies Under the Credit Facility


 


(a)
Acknowledgment of Default.  Each
Borrower Party hereby acknowledges that (i) as of the Effective Time there will
occur a Default under and with respect to Section 11.6 of the Credit
Facility (such default, the “Change of Control Default”) and (ii) absent
the agreement of the Administrative Agent and the Lenders to forbear from
taking Enforcement Actions, the occurrence and continuance of the Change of
Control Default entitles and would continue to entitle the Administrative Agent
and the Lenders to at any time take Enforcement Actions.  Each Borrower Party represents and warrants
to the Administrative Agent and the Lender that, except for Specified Defaults
(excluding for this purpose Item VII of Schedule 2), no material Default
has occurred and will continue to exist as of the Effective Time.


 


(b) No Borrowing.  Each Borrower Party acknowledges and agrees
that, effective as of the Effective Time, the remaining commitments of the
Lender under the Credit Facility are terminated in accordance with
Section 12.1(b)(ii) of the Credit Facility.


 


(c)
Forbearance of Acquisition in Respect of Rights under Credit Facility.  Acquisition hereby agrees, on the terms and
subject to the conditions hereof, for the period beginning on the Effective
Time and ending on the Debt Specified Date (as defined below) (the “Debt
Specified Period”) to forbear from taking any Enforcement Action as a
result of the occurrence and continuance of the Change of Control Default or
any other Specified Default.


 


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(d)
Interest.  Each Borrower Party
and Acquisition hereby acknowledges and agrees that at the Effective Time POAM
shall be permitted to Convert the Obligation from a Base Rate Borrowing to a
Eurodollar Borrowing so long as (i) POAM provides Acquisition with a Notice of
Conversion no later than the third Business Day prior to the Effective Time
(which Notice of Conversion shall not require the delivery of the
representations, warranties and certifications contained in Section 3 of
Exhibit C-2 to the Credit Facility) and (ii) immediately prior to the Effective
Time POAM makes a payment of accrued and unpaid interest on the existing Base
Rate Borrowing to WII as existing holder of the Obligation under the Credit
Facility.  Such Eurodollar Borrowing
shall be for Interest Periods of one month and shall be permitted to continue
until the Debt Specified Date unless and until any payment of interest under
the Credit Facility is not made by POAM as and when due, at which point the
Obligation shall be converted back to a Base Rate Borrowing (without any
further action by any Borrower Party or Acquisition).


 


Section 3.  Termination.  The agreement of Acquisition contained in
Section 2(c) hereof shall automatically terminate and be of no further
force and effect on the date (the “Debt Specified Date”) which is the
earlier of (i) the date that is ninety (90) days after the Effective Time (the
“Outside Date”) or (ii) the occurrence of any of the following (each, a
“Termination Event”):


 


(a) any Borrower Party shall breach any of the provisions of this
Agreement or the Assignment Agreement;


 


(b)
any Default (other than any Specified Default) shall occur and be continuing;


 


(c)
any Borrower Party shall (i) pay, (ii) enter into any commitment subsequent to
the date hereof to pay or (iii) take any corporate action to approve the
payment of, any principal amount outstanding under, or any premium payments
with respect to, any of the Notes prior to the scheduled maturity thereof;


 


(d)
any Borrower Party shall redeem or repurchase any of the Notes prior to the
scheduled maturity thereof;


 


(e)
POI shall fail to deliver a certificate to Acquisition on a bi-weekly basis not
later than 12:00 noon New York time on every alternating Tuesday commencing on
the Tuesday following the week during which the Effective Time occurred, to the
effect that the Borrower Parties are in compliance with the provisions of this
Agreement and that no Termination Event shall have occurred, whether or not
notice thereof shall be delivered to a Borrower Party; or


 


(f)
a voluntary filing by, or an involuntary filing with respect to, any Borrower
Party under Title 11 of the U.S. Code.


 


Each Borrower Party acknowledges and agrees that, on the Debt Specified
Date, the agreement of the Lenders and the Administrative Agent to forbear from
taking any Enforcement Action in respect of any Specified Default shall cease
and be of no further force or effect, and the Administrative Agent and the
Lenders shall be entitled to immediately take


 


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Enforcement
Actions under the Credit Facility, the other Loan Documents and applicable law,
all without further notice or demand, in respect of any Default then existing.


 


Section 4.  Continuing Effect.


 


(a)  Except as expressly provided herein, the
Credit Facility and the other Loan Documents shall remain unchanged and in full
force and effect, and all rights, powers and remedies of Acquisition thereunder
are hereby expressly reserved.  Unless otherwise
modified by this Agreement, each Borrower Party remains obligated by their
respective representations, warranties, covenants and agreements as set forth
in the Credit Facility and the other Loan Documents.


 


(b)
Each Borrower Party acknowledges and agrees that, as of the Effective
Time, the Obligation includes, without limitation, the amounts set forth on
Schedule 1 attached hereto on account of the outstanding unpaid amount of
principal of, and accrued and unpaid interest on, the Borrowings.


 


(c)  Neither this Agreement nor any action or
inaction on the part of Acquisition shall be construed to constitute or
represent (i) a commitment by Acquisition, either in its capacities under the
Credit Facility or in any other capacity, to restructure any Indebtedness of
the Borrower, or (ii) an intention by Acquisition, either in its capacities
under the Credit Facility or in any other capacity, except in respect of the
forbearance expressly provided in Section 2 hereof with respect to any
Specified Default, to waive, modify or refrain from exercising any of its
rights, powers, privileges or remedies under the Credit Facility or any other
document or agreement, at law, in equity or otherwise, and each Borrower Party
acknowledges, agrees and confirms, except as expressly provided in
Section 2 hereof with respect to any Specified Default, that no such
commitment, waiver, modification or agreement not to exercise has been offered,
granted, extended or agreed to by Acquisition, either in its capacities under
the Credit Facility or in any other capacity. 
Nothing set forth in this Agreement shall be construed so as to require
Acquisition, either in its capacities under the Credit Facility or in any other
capacity, to agree to the terms of any modification proposed by any Borrower
Party to the Credit Facility or any other Loan Document or to any other
document or agreement to which Acquisition is a party.


 


(d)  Neither this Agreement nor any action or
inaction on the part of any Borrower Party shall be construed to constitute or
represent an intention by such Borrower Party, either in its capacity as a
party under the Credit Facility or in any other capacity, to waive, modify or
refrain from exercising any of its rights, powers, privileges or remedies under
the Credit Facility or any other document or agreement, at law, in equity or
otherwise, and Acquisition acknowledges, agrees and confirms, except as
expressly provided herein, that no such waiver, modification or agreement not
to exercise has been offered, granted, extended or agreed to by such Borrower
Party, either in its capacity as a party under the Credit Facility or in any
other capacity.  Nothing set forth in
this Agreement shall be construed so as to require any Borrower Party, either
in its capacity as a party under the Credit Facility or in any other capacity,
to agree to the terms of any modification proposed by Acquisition to the Credit
Facility or any other Loan Document or to any other document or agreement to
which such Borrower Party is a party.


 


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Section 5.  Financing.  Upon the request of POI, Acquisition hereby
agrees, for the period beginning at the Effective Time and ending on the Debt
Specified Date, to use commercially reasonable efforts to assist POI in the
arrangement of additional sources of liquidity financing to the extent that
Acquisition determines, in its reasonable judgment, that such financing is
necessary based upon POI’s current business plan.


 


Section 6.
Equal Treatment with Holders of Notes. 
In the event that, during the period commencing at the Effective Time
and ending on the Debt Specified Date, any agreement is obtained from holders
of any class of Notes to amend or waive any provision of the underlying
documentation governing such Notes, or to forebear against exercising any
remedies under such documentation for any period of time, each Borrower Party
agrees (i) to pay to Acquisition the same amount of fees or other amounts (as a
percentage of aggregate principal amount and including any fees or expenses
paid to legal, financial or other advisors) paid to holders of such class of
Notes (if, and only if, the fees or amounts described in this Section 6(i)
have not already been paid to Acquisition pursuant to any other agreement or
arrangement among the parties hereto), (ii) to the extent that the expiration
date for forbearance of remedies is prior to the Outside Date, then the Outside
Date shall be amended to such earlier date without any further action required
to be taken by any party hereunder and (iii) to the extent that any such
agreement contains any other terms more favorable to the holders of such class
of Notes than the terms provided to Acquisition hereunder (including with
respect to standstill terms, provision of information or otherwise), then this
Agreement shall be deemed amended to include such terms without any further
action required to be taken by any party hereunder.


 


Section 7.
Employee Matters.  Acquisition,
solely in its capacity as Administrative Agent and Lender under the Credit
Facility, hereby agrees not to oppose the making by POI of all currently
contracted payments to its senior management and executive employees (which
payments do not exceed $14,000,000  in
the aggregate), and the continued retention by such individuals of such
payments.


 


Section 8.
Miscellaneous.


 


8.01.  Successors and Assigns, Benefit of
Agreement.  This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.  This
Agreement is solely for the benefit of the signatories hereto (and their
respective successors and assigns), and, no other Person (including without
limitation any other creditor of or claimant against any Borrower Party) shall
have any rights under, or because of the existence of, this Agreement.


 


8.02.  Remedies.  No failure on the part of Acquisition to exercise, and no course
of dealing with respect to, and no delay in exercising, any right, power or
remedy hereunder or under the Credit Facility or any other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise by
Acquisition of any right, power or remedy hereunder, under the Credit Facility
or under any other Loan Documents preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.


 


8.03.  Voluntary Agreement.  Each Borrower Party represents and warrants
that it is represented by legal counsel of its choice, is fully aware of the
terms contained in this


 


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Agreement and
has voluntarily and without coercion or duress of any kind entered into this
Agreement, and the documents and agreements executed and to be executed in
connection with this Agreement.


 


8.04.  Further Assurances.  Each Borrower Party shall execute all
additional documents and do all acts not specifically referred to herein which
are reasonably necessary to fully effectuate the intent of this Agreement.


 


8.05.  Severability.  Any provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining provisions of this Agreement
or affecting the validity or enforceability of any provisions of this Agreement
in any other jurisdiction.


 


8.06.  Counterparts; Section Headings.  This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
agreement and any of the parties hereto may execute this Agreement by signing
any such counterpart.  Section or
other headings contained in this Agreement are for reference purposes only and
shall not in any way effect the meaning or interpretation of this Agreement.


 


8.07.  Governing Law.  This Agreement shall be governed by, and
construed in accordance with the law of the State of New York.


 


8.08.  Effective Time.  The provisions of this Agreement shall take
effect immediately upon the Effective Time.


 


8.09.  Assignment.  This Agreement may not be assigned by any of the parties hereto
without the prior written consent of the other parties.


 


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IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and delivered as of the day and year
first written above.


 


 


	
   

  	
  POI ACQUISITION, L.L.C., a Delaware limited

  liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Tanner

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PROTECTION ONE ALARM MONITORING, INC., a

  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard Ginsburg

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Richard Ginsburg

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President
  and

  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  PROTECTION ONE, INC., a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard Ginsburg

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Richard Ginsburg

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President
  and

  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NETWORK MULTI-FAMILY SECURITY

  CORPORATION, a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steve Williams

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Steve Williams

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President

  	
   

  



 


 


[Credit Facility Standstill
Agreement]


 

















 


Schedule 1


 


OBLIGATIONS UNDER THE
CREDIT FACILITY


 


As of
the Effective Time (and after giving effect to any payment pursuant to
Section 2(d) of this Agreement), the Obligation under the Credit Facility
is as follows:


 


•                  Principal of $215,500,000.00


 


•     Accrued and unpaid interest
from December 31, 2003 at the Base Rate.


 

















 


Schedule 2


 


SPECIFIED  DEFAULTS


 


The following items shall only be Specified Defaults
until the Debt Specified Date:


 


I.                           Section 8.15
- Solvency:


 


Failure to comply with the Credit Facility as the
result of not making the representation contained in Section 8.15 of the
Credit Facility (Solvency) as and when required is a Specified Default


 


II.                       Section 9.3(a)
- Annual Financial Statements:


 


Failure to comply with Section 9.3(a) of the
Credit Facility (Annual Financial Statements) is a Specified Default


 


III.                   Section 10.13
- Financial Covenants:


 


Failure to comply with Section 10.13 of the
Credit Facility (Financial Covenants) is a Specified Default


 


IV.                   Section 11.1(a)
- Payment of Obligation:


 


Failure to comply with Section 11.1(a) of the
Credit Facility as a result of nonpayment in full of accrued and unpaid
interest on the Obligation when it becomes due and payable under the Credit
Facility is a Specified Default, except to the extent that (i) POAM does not
Convert the Obligation pursuant to Section 2(d) hereof, (ii) any payment
of interest is made on the Senior Notes from and after the date hereof and
(iii) interest on the Obligation is not paid in full when due on March 31,
2004


 


V.                       Section 11.6
– Change of Control:


 


Failure to comply with Section 11.6 of the Credit
Facility (Change of Control) is a Specified Default


 


VI.                   Section 11.7
– Default Under Other Debt and Agreements:


 


Failure to comply with Section 11.7 of the Credit
Facility (Default Under Other Debt and Agreements) is a Specified Default


 


VII.               Any
Default that occurred prior to the Effective Time is a Specified Default