Exhibit

10.4




 




CONSENT AND LIMITED

WAIVER AGREEMENT




 




THIS CONSENT AND LIMITED WAIVER AGREEMENT (this

“Waiver”), is made and entered into effective as of July 1, 2002, by and

between WESTAR ENERGY, INC. (f/k/a WESTERN RESOURCES, INC.), a Kansas

corporation (“Westar”) and PROTECTION ONE, INC., a Delaware corporation

(“Protection One”).  Unless otherwise

defined herein, all capitalized terms used herein shall have the respective

meanings provided such terms in the Contribution Agreement referred to below.




 




W I T N E S S E T H :




 




WHEREAS, Section 3.18(c) of the Contribution Agreement

dated as of July 30, 1997 between Westar and Protection One (as amended, the

“Contribution Agreement”) provides that the percentage of Protection One Voting

Securities beneficially owned by Westar on a fully diluted basis may not in the

aggregate exceed 81% of the Voting Securities issued and outstanding at any one

time (the “Ownership Ceiling”); and




 




WHEREAS, due to the expiration of options held by

former Protection One employees and due to Westar’s having acquired certain

Convertible Senior Subordinated Notes issued by Protection One, Westar’s

beneficial ownership of Protection One Voting Securities exceeds 81% of the

Voting Securities issued and outstanding; and




 




WHEREAS, pursuant to a Consent and Limited Waiver

Agreement dated March 18, 2002, Protection One consented to Westar’s lack of

compliance with the Ownership Ceiling for a period ending on July 1, 2002, and

waived any breach or default that could be asserted by Protection One under the

Contribution Agreement solely as a result of Westar’s lack of compliance with

Section 3.18(c) of the Contribution Agreement during the Waiver Period (as

defined therein); and




 




WHEREAS, Protection One desires to extend the period

for which it has consented to Westar’s lack of compliance with the Ownership

Ceiling and waived any breach or default for Westar’s lack of compliance with

Section 3.18(c) of the Contribution Agreement as more particularly provided

herein; and




 




WHEREAS, pursuant to Section 6.2 of the Contribution

Agreement, Protection One may not amend, supplement or otherwise modify any

provision of the Contribution Agreement, and Protection One may not waive any

provision thereof, unless such amendment, supplement, modification or waiver

shall have been approved by the affirmative vote of a majority of the

Continuing Directors; and




 




WHEREAS, Mr. Ben M. Enis and Mr. James Q. Wilson

(collectively, the “Continuing Directors”) constitute all of the Continuing

Directors and desire to authorize Protection One to grant the Waiver as

contemplated herein;




 




WHEREAS, subject to the terms and conditions set forth

herein, the parties hereto agree as follows;




 





























 




NOW, THEREFORE, it is agreed:




 




1.             CONSENT:  Protection One hereby consents, on a

one-time basis, to Westar’s lack of compliance with Section 3.18(c) of the

Contribution Agreement in respect to the Ownership Ceiling; provided, however,

the one-time consent set forth in this Section 1 shall apply only Westar’s lack

of compliance with the Ownership Ceiling during the period commencing on July

1, 2002 (the “Waiver Effective Date”) and ending on March 31, 2003 (and with

such period being referred to herein as the “Waiver Period”).




 




2.             LIMITED

WAIVER:  Protection One hereby waives,

on a one-time basis, any breach or default that could otherwise be asserted by

Protection One under the Contribution Agreement solely as a result of Westar’s

lack of compliance with Section 3.18(c) of the Contribution Agreement in

respect to the Ownership Ceiling; provided, however, the one-time waiver set

forth in this Section 2 shall apply only to such breach or default that could

otherwise be or have been asserted by Protection One due to Westar’s lack of

compliance with the Ownership Ceiling during the Waiver Period.




 




3.             MISCELLANEOUS:




 




(a)           This

Waiver is limited as specified and shall not constitute a modification,

acceptance or waiver of any other provision of the Contribution Agreement or

any other agreement or document.




 




(b)           This

Waiver may be executed in any number of counterparts and by the different

parties hereto on separate counterparts, each of which counterparts when

executed and delivered shall be an original, but all of which shall together

constitute one and the same instrument.




 




4.             GOVERNING

LAW.  THIS WAIVER AND THE RIGHTS AND

OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND

GOVERNED BY THE LAW OF THE STATE OF DELAWARE.




 




5.             REPRESENTATIONS

OF WESTAR.  In order to induce the

Protection One to enter into this Waiver, Westar hereby represents and warrants

that after giving effect to this Waiver as of the Waiver Effective Date, (i)

there is no material breach of Westar’s obligations under the Contribution

Agreement, and (ii) all representations and warranties contained in the Contribution

Agreement are true and correct in all material respects.




 




6.             EFFECTIVE

DATE OF WAIVER.  This Waiver shall

become effective on the Waiver Effective Date.




 




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7.             CONTRIBUTION

AGREEMENT. From and after the Waiver Effective Date, all references in the

Contribution Agreement and any other document referring to the Contribution

Agreement shall be deemed to be references to the Contribution Agreement after

giving effect to this Waiver.




 




8.             APPROVAL

OF CONTINUING DIRECTORS.  The Continuing

Directors have executed this Waiver solely to reflect their approval hereof, in

accordance with Section 6.2 of the Contribution Agreement.




 




IN WITNESS WHEREOF, each of the parties hereto has

caused a counterpart of this Waiver to be duly executed and delivered as of the

date first above written.




 




	

   


  	

  PROTECTION ONE, INC.


  	 

	

   


  	

   


  	

   


  	 

	

   


  	

   


  	

   


  	 

	

   


  	

  By:


  	

   


  	

   


  	 

	

   


  	

  Name:


  	

  Darius G. Nevin


  	 

	

   


  	

  Title:


  	

  Executive Vice President and


  Chief Financial Officer


  	 

	

   


  	

   


  	

   


  	 

	

   


  	

   


  	

   


  	 

	

   


  	

  WESTAR ENERGY, INC.


  	 

	

   


  	

  (f/k/a WESTERN RESOURCES, INC.)


  	 

	

   


  	

   


  	

   


  	 

	

   


  	

   


  	

   


  	 

	

   


  	

  By:


  	

   


  	

   


  	 

	

   


  	

  Name:


  	

  Paul R. Geist


  	 

	

   


  	

  Title:


  	

  Senior Vice President and


  Chief Financial Officer


  	 

	

   


  	

   


  	

   


  	 

	

   


  	

   


  	

   


  	 

	

   


  	

   


  	

   


  
	

   


  	

  Ben M. Enis


  	 

	

   


  	

   


  	

   


  	 

	

   


  	

   


  	

   


  	 

	

   


  	

   


  	

   


  
	

   


  	

  James Q. Wilson


  	 

								





 




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