Exhibit
10.2


 


FOURTEENTH
AMENDMENT OF CREDIT AGREEMENT


 


THIS
FOURTEENTH AMENDMENT OF CREDIT AGREEMENT (this “Amendment”) is entered into, effective
as of June 20, 2003, between PROTECTION ONE ALARM MONITORING, INC., a
Delaware corporation (“Borrower”),
each of the Persons that is a signatory to this Amendment in its capacity as a
Lender under the Credit Agreement referred to below (each Person from time to
time party to such Credit Agreement, a “Lender” and, collectively, the “Lenders”), and WESTAR INDUSTRIES, INC., as
Administrative Agent for the Lenders (in such capacity, together with its
successors in such capacity, “Administrative Agent”).


 


RECITALS


 


A.                                   Borrower,
Lenders and Administrative Agent entered into the Credit Agreement dated as of
December 21, 1998 (as renewed, extended, modified, and amended from time to
time, the “Credit
Agreement”; capitalized terms used herein shall, unless
otherwise defined herein, have the respective meanings set forth in the Credit
Agreement), providing for a revolving credit facility in the original maximum
principal amount of $500,000,000.


 


B.                                     Pursuant
to a letter agreement dated as of September 30, 1999, Borrower reduced the
Total Commitment to $250,000,000.


 


C.                                     The
Lenders and the Administrative Agent entered into that certain Assignment and
Acceptance dated December 17, 1999 wherein the Administrative Agent and the
Lenders assigned all of their rights and obligations under the Credit Agreement
to Westar Industries, Inc. (f/k/a Westar Capital, Inc.).


 


D.                                    Borrower,
Lenders and Administrative Agent entered into a Second Amendment of Credit
Agreement effective as of February 29, 2000, a Third Amendment of Credit
Agreement effective as of January 2, 2001, a Fourth Amendment of Credit
Agreement effective as of March 2, 2001, a Fifth Amendment to Credit Agreement
effective as of June 30, 2001, a Sixth Amendment of Credit Agreement effective
as of November 1, 2001, a Seventh Amendment of Credit Agreement effective as of
March 25, 2002, an Eighth Amendment of Credit Agreement effective as of June 3,
2002, a Ninth Amendment of Credit Agreement effective as of June 26, 2002, a
Tenth Amendment of Credit Agreement effective as of July 25, 2002, an Eleventh
Amendment of Credit Agreement effective as of August 26, 2002, a Twelfth Amendment
of Credit Agreement effective as of September 11, 2002, and a Thirteenth
Amendment of Credit Agreement effective as of March 11, 2003 (the “Thirteenth Amendment”),
pursuant to which certain provisions of the Credit Agreement (including,
without limitation, the Total Commitment) were amended.


 


E.                                      Borrower,
Lenders, and Administrative Agent desire to further modify certain provisions
contained in the Credit Agreement, subject to the terms and conditions set
forth herein.


 

















 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrower, the Lenders party hereto, and
Administrative Agent agree as follows:


 


1.                                      Amendments
to the Credit Agreement.


 


(a)                                  Section 1.1 is hereby amended to
delete the definitions of “Applicable Margin” and “Termination Date”
in their entirety and replace such definitions with the following:


 


Applicable Margin means
3.75% for Base Rate Borrowings, 5.00% for Eurodollar Borrowings and 0.50% for
Commitment Fees.


 


Termination Date means
the earlier of (a) January 5, 2005, and (b) the effective date of any other
termination or cancellation of the Lenders’ commitments to lend under, and in
accordance with, this Agreement.


 


(b)                                  Section 1.1 is hereby amended by
adding the following new definitions:


 


“Protection One Europe”
means Protection One Europe Holding SA, a French société anonyme.


 


“Trademark License Agreement”
means a trademark license agreement between Borrower and Protection One Europe
(or such other Person as shall be approved in writing by the Required Lenders)
pursuant to which Borrower (1) grants to Protection One Europe (or such other
Person as shall be approved in writing by the Required Lenders) an exclusive
license to use the “Protection One” trade name (together with the related
community trademark and national trademark) for a period of three years and (2)
agrees not to transfer such licensed trademarks or the rights under such
trademark license agreement or to permit the use of such licensed trademarks
for an additional period of two years, which trademark license agreement shall
be in form and substance satisfactory to the Required Lenders.


 


(c)                                  Section 1.1 is hereby amended by
inserting in the definition of “EBITDA”,
at the end of the first sentence thereof, and immediately before the period
ending such sentence, the following new language:


 


“plus (e) in the case of POI (to the extent
deducted in the calculation of consolidated net income of POI for such period),
the excess of (i) the aggregate amount of POI’s directors & officers
insurance expense for such period (the “EBITDA
Measurement Period”) over (ii) the quotient of (A) the aggregate
cash cost of POI’s August 2002 renewal of its directors & officers
insurance divided by (B) the
number of EBITDA Measurement Periods contained in a single fiscal year (e.g., if the relevant EBITDA Measurement
Period is a fiscal quarter, the denominator described in this clause (B) is
four (4)), plus (f) in the case
of POI (to the extent deducted in the calculation of consolidated net


 


2

















 


income of POI
for such period), and solely for purposes of calculating the “Leverage Ratio”
and the “Interest Coverage Ratio” to determine compliance with Section 10.13(a)
or Section 10.13(b), as the case may be, the amount of POI’s employee retention
expense for such period (not to exceed an aggregate amount of $1,900,000 for
any fiscal quarter) arising in connection with the employee retention plan
approved by POI’s board of directors on January 30, 2003”


 


(d)                                  Section 10.11 is hereby deleted in its
entirety and replaced with the following:


 


10.11                 Sale of Assets. Borrower
shall not, and shall not permit any other Company to, sell, assign, transfer,
or otherwise dispose of any of its assets, other than (a) sales of inventory
and equipment leases (including, without limitation, equipment leases
originated or acquired by C.E.T., S.A. or its Subsidiaries) in the ordinary
course of business, (b) the sale, discount or transfer of delinquent accounts receivable
in the ordinary course of business for purposes of collection, (c) sales of
immaterial assets for consideration not less than fair market value thereof,
(d) dispositions of obsolete assets and assets no longer useful in the
respective businesses of the Companies, (e) transfers resulting from any
casualty or condemnation of property or assets, (f) licenses or sublicenses of
intellectual property and general intangibles and licenses, leases or subleases
of other property in each case in the ordinary course of business and that do
not materially interfere with the business of any Company, (g) dispositions
permitted by Section 10.12, (h) the Special Asset Sale, (i) licenses granted
pursuant to the Trademark License Agreement, and (j) other asset sales during
any fiscal year of the Companies in an aggregate amount not exceeding ten
percent (10%) of the consolidated total assets of the Companies determined in
accordance with GAAP for the most recent fiscal year (without regard to any
write down or write up thereof).


 


2.                                      Amendment
of Credit Agreement and Other Loan Documents. All references in the Loan
Documents to the Credit Agreement shall henceforth be deemed references to the
Credit Agreement as modified and amended by this Amendment, and as may, from
time to time, be further modified, amended, restated, extended, renewed, and/or
increased.


 


3.                                      Ratifications.
Borrower (a) ratifies and confirms all provisions of the Loan Documents as
amended by this Amendment, (b) ratifies and confirms that all guaranties, assurances,
and Liens, if any, granted, conveyed, or assigned to the Credit Parties under
the Loan Documents are not released, reduced, or otherwise adversely affected
by this Amendment and continue to guarantee, assure, and secure full payment
and performance of the present and future Obligation, and (c) agrees to perform
such acts and duly authorize, execute, acknowledge, deliver, file, and record
such additional documents, and certificates as the Credit Parties may
reasonably request in order to create, perfect, preserve, and protect those
guaranties, assurances, and Liens.


 


3

















 


4.                                      Representations.
Borrower represents and warrants to the Credit Parties that as of the date
of this Amendment: (a) this Amendment has been duly authorized, executed, and
delivered by Borrower, and the Consent to this Amendment, in the form attached
hereto (the “Consent”) has been
duly authorized, executed and delivered by each Obligor that is a signatory
thereto; (b) no action of, or filing with, any Governmental Authority is
required to authorize, or is otherwise required in connection with, the
execution, delivery, and performance by Borrower or any other Obligor of this
Amendment and the Consent; (c) the Loan Documents, as amended by this
Amendment, are valid and binding upon Borrower and the other Obligors and are
enforceable against Borrower and the other Obligors in accordance with their
respective terms, except as limited by Debtor Relief Laws and general
principles of equity; (d) the execution, delivery, and performance by Borrower
and the other Obligors of this Amendment and the Consent do not require the
consent of any other Person and do not and will not constitute a violation of
any governmental requirement, Law, order of any Governmental Authority, or
material agreements to which Borrower or any other Obligor is a party or by
which Borrower or any other Obligor is bound; (e) all representations and
warranties of Borrower and the other Obligors in the Loan Documents are true
and correct in all material respects on and as of the date of this Amendment,
except to the extent that (i) any of them speak to a different specific date,
or (ii) the facts on which any of them were expressly stated to have been based
have been changed by transactions contemplated or permitted by the Credit
Agreement; and (f) both before and after giving effect to this Amendment, no
Potential Default or Default exists.


 


5.                                      Conditions.
This Amendment shall not be effective unless and until:


 


(a)                                  this
Amendment has been executed by Borrower, the Administrative Agent and each
Lender, and the Consent has been executed by all of the Obligors (other than
the Borrower);


 


(b)                                  Borrower
shall have delivered to Administrative Agent such documents satisfactory to Administrative
Agent as it may request evidencing the authorization and execution of this
Amendment, the Consent and any other documents executed and delivered in
connection herewith (collectively, the “Amendment Documents”);


 


(c)                                  Borrower
shall have paid to the Administrative Agent, for the account of the Credit
Parties as Administrative Agent shall determine, an amendment fee in an amount
equal to $450,000; and


 


(d)                                  The
Thirteenth Amendment shall have become effective in accordance with the terms
thereof.


 


6.                                      Continued
Effect. Except to the extent amended hereby or by any documents executed in
connection herewith, all terms, provisions, and conditions of the Credit
Agreement and the other Loan Documents, and all documents executed in
connection therewith, shall continue in full force and effect and shall remain
enforceable and binding in accordance with their respective terms.


 


4

















 


7.                                      Miscellaneous.
Unless stated otherwise (a) the singular number includes the plural and
vice versa and words of any gender include each other gender, in each case, as
appropriate, (b) headings and captions may not be construed in interpreting
provisions, (c) this Amendment shall be construed and its performance enforced,
under Texas law, (d) if any part of this Amendment is for any reason found to
be unenforceable, all other portions of it nevertheless remain enforceable, and
(e) this Amendment may be executed in any number of counterparts with the same
effect as if all signatories had signed the same document, and all of those
counterparts must be construed together to constitute the same document.


 


8.                                      Parties.
This Amendment binds and inures to Borrower and the Credit Parties and their
respective successors and permitted assigns.


 


9.                                      ENTIRETIES.  THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AS AMENDED BY THIS AMENDMENT AND THE OTHER AMENDMENT DOCUMENTS, REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES ABOUT THE SUBJECT MATTER OF THE CREDIT AGREEMENT AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.


 


[THE REMAINDER OF THIS PAGE IS INTENTIONALLY
LEFT BLANK]


 


5

















 


SIGNATURE
PAGE TO FOURTEENTH AMENDMENT OF

CREDIT AGREEMENT AMONG

PROTECTION ONE ALARM MONITORING, INC., AS BORROWER,

WESTAR INDUSTRIES, INC., AS ADMINISTRATIVE AGENT

AND

THE LENDERS PARTY HERETO


 


EXECUTED on
and effective as of the date first above written.


 


	
   

  	
  PROTECTION ONE ALARM MONITORING, INC., a

  Delaware corporation, as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Richard Ginsburg

  	
   

  
	
   

  	
   

  	
  Name: 
  Richard Ginsburg

  
	
   

  	
   

  	
  Title: 
  President and Chief Executive Officer

  



 

















 


SIGNATURE
PAGE TO FOURTEENTH AMENDMENT OF

CREDIT AGREEMENT AMONG

PROTECTION ONE ALARM MONITORING, INC., AS BORROWER,

WESTAR INDUSTRIES, INC., AS ADMINISTRATIVE AGENT,

AND

THE LENDERS PARTY HERETO


 


EXECUTED on
and effective as of the date first above written.


 


	
   

  	
  WESTAR INDUSTRIES, INC., as
  Administrative Agent

  and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Greg A. Greenwood

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Greg A. Greenwood

  
	
   

  	
   

  	
  Title:

  	
  Secretary and Treasurer

  
					



 

















 


SIGNATURE
PAGE TO CONSENT TO THE FOURTEENTH AMENDMENT OF

CREDIT AGREEMENT AMONG

PROTECTION ONE ALARM MONITORING, INC., AS BORROWER,

WESTAR INDUSTRIES, INC., AS ADMINISTRATIVE AGENT,

AND

THE LENDERS PARTY THERETO


 


To induce the
Credit Parties to enter into this Amendment, each of the undersigned (a)
consents and agrees to the execution and delivery of the Amendment Documents,
(b) ratifies and confirms that all guaranties, assurances, and Liens, if any,
granted, conveyed, or assigned to the Credit Parties under the Loan Documents
are not released, diminished, impaired, reduced, or otherwise adversely
affected by the Amendment Documents and continue to guarantee, assure, and
secure the full payment and performance of all present and future Obligations
(except to the extent specifically limited by the terms of such guaranties,
assurances, or Liens), (c) agrees to perform such acts and duly authorize, execute,
acknowledge, deliver, file, and record such additional guaranties, assignments,
security agreements, deeds of trust, mortgages, and other agreements,
documents, instruments, and certificates as the Credit Parties may reasonably
deem necessary or appropriate in order to create, perfect, preserve, and
protect those guaranties, assurances, and Liens, and (d) waives notice of
acceptance of this consent and agreement, which consent and agreement binds
each of the undersigned and its successors and permitted assigns and inures to
the Credit Parties and their respective successors and permitted assigns.


 


 


EXECUTED on
and effective as of the date first above written.


 


	
   

  	
  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