Document:

Exhibit 10.6

AIRCRAFT

REIMBURSEMENT AGREEMENT

This Aircraft

Reimbursement Agreement (this “Agreement”) is entered into as of June 5,

2002 between AV ONE, Inc. (f/k/a Westar Aviation, Inc.), a Kansas corporation

(“AV ONE”), and Westar Industries, Inc. (f/k/a Westar Capital, Inc.), a

Delaware corporation (“Westar”).

WHEREAS, Westar has

entered into that certain Aircraft Lease Agreement dated as of August 1, 2000

(as amended, supplemented or modified from time to time, the “Fleet Lease”)

with Fleet National Bank (“Fleet Lessor”) providing for the lease by

Westar from the Fleet Lessor of a certain Cessna Model 750 Citation X aircraft,

FAA Registration Mark N800W and Manufacturer’s Serial Number 750-0122, together

with two Rolls-Royce Allison Model AE 3007C engines and related accessories and

optional equipment (the “Fleet Aircraft”);

WHEREAS, AV ONE will

provide certain administrative and accounting services to Westar in connection

with the Fleet Aircraft in accordance with the provisions of the Fleet Lease;

WHEREAS, Protection One,

Inc., a Delaware corporation, (“POI”), has purchased from Westar all of

the outstanding capital stock of AV ONE under a certain Stock Purchase

Agreement dated June 4, 2002;

WHEREAS, AV ONE has

entered into that certain Lease Agreement dated as of June 1, 1998 (as amended,

supplemented or modified from time to time, the “Connell Lease”) with

First Security Bank, National Association (“Connell Lessor”) providing

for the lease by AV ONE from the Connell Lessor of a certain Cessna Model 650

Citation VII aircraft, FAA Registration Mark N860W and Manufacturer’s Serial

Number 650-7086, together with two Garrett TFE-731-4R-25 engines and related

accessories and optional equipment (the “Connell Aircraft” and, together

with the Fleet Aircraft, the “Aircraft”);

WHEREAS, AV ONE desires

under this Agreement to provide for the reimbursement of Westar for the lease

payments (the “Lease Payments”) under the Fleet Lease and Westar desires

under this Agreement to provide for the reimbursement of AV ONE for certain

costs and expenses relating to the Aircraft;

NOW THEREFORE, in

consideration of the agreements herein contained, and for other good and

valuable consideration, the parties hereto agree as follows:

1.             The following terms when used in this Agreement shall

have the meanings indicated below:

 

 

 

“Contract User”

shall mean Westar and any other affiliate of AV ONE which has entered into a

reimbursement agreement with AV ONE on substantially the same terms and

conditions as are contained in this Agreement, provided that, in such other

agreement, POI may limit its reimbursement to AV ONE to the Variable Costs only

for up to 140 hours of the Usage Share.

“Cost” shall mean the sum of Fixed Costs and

Variable Costs.

“Fixed Costs” shall mean, with respect to any

year, those costs and expenses associated with the possession and use of the

Aircraft for such year of the type which are reflected as “Fixed Costs” on Exhibit

A hereto.

“Hourly Rate” shall mean, with respect to each

Aircraft, the estimated Fixed Costs and Variable Costs as determined by AV

ONE.  The Hourly Rate may be adjusted

annually as of each January 1.

“Triggering Event” shall mean each of the

following: (i) Western Resources, Inc. (“Western Resources”), a Kansas

corporation, and its affiliates cease to own more than 50% of Westar’s voting

stock and, at the direction of POI’s board of directors, POI requests in

writing Westar to repurchase 100% of the outstanding capital stock of AV ONE

from POI or (ii) Westar ceases to own more than 50% of POI’s voting stock.

“Usage Amount” shall mean the amount reimbursed

by Contract User, which is the lesser of (i) the product of Usage Share

multiplied by Hourly Rate or (ii) the actual amount payable by such Contract

User under the relevant reimbursement agreement.

“Usage Share” shall mean, with respect to each

Contract User, such Contract User’s share of the usage of the Aircraft during

the preceding month, which share shall be determined by the number of hours of

use of the Aircraft by such Contract User during such month.

“Variable Costs”

shall mean, with respect to any year, all costs and expenses incurred in

connection with the possession and use of the Aircraft during such year other

than Fixed Costs, and shall include, without limitation, those costs and expenses

of the type which are reflected as “Variable Costs” on Exhibit A.

2.             (a)  AV ONE shall reimburse Westar for the Lease Payments under the

Fleet Lease no later than 10 days after the date each Lease Payment is

due.  It is understood and agreed, however,

that Westar shall be responsible to Fleet Lessor for the Lease Payments and performance

of Westar’s obligations under the Fleet Lease.

 

 

1

 

(b)  AV ONE shall pay directly, on Westar’s

behalf, all other Costs other than Lease Payments associated with the Fleet

Aircraft.   It is understood and agreed,

however, that Westar shall be responsible for all Costs associated with the

Aircraft.

3.             This Agreement shall be for a term commencing on June 4,

2002 and continuing to and until the earlier of (a) the occurrence of the

Triggering Event and (b)(i) the expiration of the Fleet Lease with respect

to the Fleet Aircraft and (ii) the expiration of the Connell Lease with

respect to the Connell Aircraft.

4.             (a)           AV

ONE shall bill, and Westar shall, with respect to each Aircraft, reimburse AV

ONE, on a monthly basis an amount equal to Westar’s Usage Amount for the preceding

month, which will be due and payable within 10 days.

(b)           For the purposes of this Agreement,

the Costs shall be AV ONE’s fully allocated costs, as determined by AV ONE in

accordance with generally accepted accounting principles.

(c)           Within 10 days of the end of each

fiscal year, AV ONE shall determine the difference between the Costs and the

Usage Amount of all Contract Users for the preceding year for each

Aircraft.  Any excess of the Usage

Amount paid by all Contract Users for each Aircraft over the Costs for each

Aircraft shall be payable to Westar by AV ONE, and any excess of the Costs for

each Aircraft over the Usage Amount paid by all Contract Users for each

Aircraft shall be payable to AV ONE by Westar, within 10 days of such

determination.

(d)           All determinations by AV ONE pursuant

to this Section shall be made available to Westar in accordance with its books

and records.

(e)           Upon termination of this Agreement,

each party hereto agrees to pay the other any and all amounts owed to each

other which are accrued and unpaid as the date of termination within 10 days of

such termination.

5.             AV ONE, if requested by Westar, shall permit Westar to

audit its books and records relating to the Costs being reimbursed hereunder.

6.             This Agreement constitutes the entire agreement between

the parties hereto relating to the subject matter hereof. There are no terms,

obligations, covenants, representations, statements or conditions other than

those contained herein or in exhibits or other instruments delivered or to be

delivered pursuant to the terms hereof. No variation or modification of this

Agreement nor waiver of any of the terms and provisions hereof shall be deemed

valid unless in writing and signed by the parties hereto.

 

2

 

7.             Nothing herein contained shall be construed as

constituting a partnership, joint venture or agency between Westar and AV ONE

or as an assignment of the Fleet Lease.

8.             Each party hereto intends that this Agreement shall not

benefit or create any right or cause of action in or on behalf of any person

other than the parties hereto.

9.             All terms and provisions of this Agreement shall be

binding upon and shall inure to the benefit of the parties hereto and the

respective successors and assigns; provided, however, that this

Agreement may not be assigned by either party hereto without the written consent

of the other party.

10.           The construction, performance,

execution and enforcement of this Agreement and any dispute, whether in

contract or tort, of whatsoever nature arising out of or in connection with

this Agreement or performance under it, including any remedy thereof, shall be

governed exclusively by the laws of Delaware.

[Signature page

follows]

 

3

 

IN WITNESS WHEREOF, the parties have signed this Agreement as of the

date first above written.

	

  WESTAR INDUSTRIES, INC.

  
	

   

  
	

   

  
	

  By:

  	

            /s/ Paul R. Geist

  
	

   

  	

  Name:  Paul R. Geist

  
	

   

  	

  Title:  President

  
	

   

  
	

   

  
	

   

  
	

  AV ONE, INC.

  
	

   

  	

   

  
	

   

  	

   

  
	

  By:

  	

            /s/ Richard Ginsburg

  
	

   

  	

  Name: 

  Richard Ginsburg

  
	

   

  	

  Title: 

  PresidentEXHIBIT 10.1

                           CHANGE OF CONTROL AGREEMENT

                  Agreement made as of the 25th day of June, 2002, between
Quipp, Inc., a Florida corporation ("Quipp"), Quipp Systems, Inc., a Florida
corporation ("Quipp Systems") (Quipp and Quipp Systems are collectively referred
to as the "Company") and Michael S. Kady, one of the officers or senior level
employees of Quipp and/or Quipp Systems, (the "Officer").

                  WHEREAS, the Officer is one of Quipp's and/or Quipp Systems'
officers or senior level employees; and

                  WHEREAS, the Company has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of the Officer to his assigned duties without distraction; and

                  WHEREAS, in consideration of the Officer's continued
employment with the Company or any successor thereto, the Company agrees that
the Officer shall receive the compensation set forth in this Agreement to
protect against the adverse financial and career impact on the Officer in the
event the Officer's employment with the Company terminates under specified
circumstances upon or following a Change in Control (as defined herein);

                  NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements hereinafter set forth and intending to be
legally bound hereby, the parties hereto agree as follows:

         1. Definitions. For all purposes of this Agreement, the following terms
shall have the meanings specified in this Section unless the context clearly
otherwise requires:

                  (a) "Board" shall mean the Company's Board of Directors.

                  (b) "Cause" shall mean a finding by the Company that the
Officer has: (i) performed his assigned duties in a grossly negligent manner and
does not remedy such breach within thirty (30) days after receiving written
notice specifying the details thereof; (ii) been engaged in disloyalty to the
Company, including, fraud, embezzlement, theft, commission of a felony, or
proven dishonesty in the course of his employment or service; or (iii) violated
the confidentiality provisions of Section 6 or the noncompetition provisions of
Section 7.

                  (c) "Change of Control" shall be deemed to have occurred,
unless the Board, a majority of which is comprised of Incumbent Board Members,
determines otherwise, if:

                           (1) Any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) other than the Company becomes a
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing more than twenty
percent (20%) of the voting power of the then outstanding securities of the
Company.

<PAGE>

                           (2) Substantially all of the assets of the Company
are sold or other otherwise disposed of.

                           (3) A transaction is consummated in which the
stockholders of the Company immediately before the transaction will not
beneficially own, immediately after the transaction, shares entitling such
stockholders to eighty percent (80%) or more of all votes to which all
stockholders of the surviving entity would be entitled in the election of
directors or other governing persons (without consideration of the rights of any
class of stock to elect directors by a separate class vote).

                           (4) A change in the composition of the Board such
that Incumbent Board Members cease for any reason to constitute at least a
majority of the Board.

                  (d) "Change of Control Payment" shall equal two times the
Officer's base salary, exclusive of bonus and other remuneration. A Change of
Control Payment shall be subject to the reduction requirement as set forth in
Section 5 of this Agreement.

                  (e) "Company" means Quipp, Inc. and, unless the context
indicates otherwise, any subsidiary of Quipp (including Quipp Systems, Inc.)
and, for purposes of Section (1)(f), Section(1)(j), Section 6 and Section 7,
shall include any successor to Quipp or Quipp Systems.

                  (f) "Confidential Information" shall mean confidential
information relating to the business of the Company, including processes,
drawings, reports, manuals, invention records, financial information, business
plans, customer lists, facts relating to prospective customers, inventory lists,
arrangements with suppliers and customers, computer programs, or other material
embodying trade secrets of the Company, other than any information (i) that is
in the public domain through no act or omission of the Officer, or (ii) that the
Officer is authorized to disclose or required to disclose in connection with
legal or administrative proceedings.

                  (g) "Constructive Termination Without Cause" shall mean the
Officer's resignation of employment following the occurrence, without his prior
written consent, of one or more of the following events: (i) a material
reduction in the Officer's compensation; (ii) a significant diminution in the
Officer's duties and responsibilities, or the assignment to the Officer of
duties and responsibilities that are materially and adversely inconsistent with
the duties and responsibilities held by the Officer on the date of this
Agreement; or (iii) the required geographical relocation of the Officer out of
the greater Miami, Florida area, in each case except as is due to Cause or as a
result of the disability (within the meaning of Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended) of the Officer.

                  (h) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.

                                       2
<PAGE>

                  (i) "Incumbent Board Members" shall mean those individuals
who, as of the date of this Agreement, constitute the Board; provided, that any
individual who becomes a member of the Board subsequent to the effective date of
this Agreement whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of those individuals
who are Incumbent Board Members shall be considered as though such individual is
an Incumbent Board Member.

                  (j) "Restricted Business" shall mean any of the business
activities in which the Company shall have been engaged at any time during the
one (1) year prior to the Termination Date.

                  (k) "Restricted Period" shall mean the period commencing on
the Termination Date and continuing for a two (2) year period thereafter.

                  (l) "Termination Date" shall mean the date of the Officer's
termination of employment with the Company.

                  (m) "Termination of Employment" shall mean the termination of
the Officer's employment by the Company.

                  (n) "Territory" shall mean any part of North America in which
the Company engages in the Restricted Business during the Restricted Period.

         2. Change of Control Benefits Upon Termination.

                  (a) If, within the period commencing ninety (90) days prior to
a Change of Control and ending twelve (12) months following such Change of
Control, (i) the Officer suffers a Termination of Employment for any reason
other than Cause, or (ii) the Officer suffers a Constructive Termination Without
Cause, the Company shall pay to the Officer a Change of Control Payment in one
lump sum within three (3) months of the Termination Date. Interest shall be
credited on the Change of Control Payment for the time it remains unpaid after
three months following the Termination Date at a rate equal to three (3)
percentage points plus the prime rate quoted in the Wall Street Journal on the
Termination Date or, if not available on such date, the next prime rate quoted
in the Wall Street Journal. The Change of Control Payment shall be made by mail
to the last known address provided by the Officer to the Company. In the event
the Company rehires the Officer within twelve (12) months of his termination,
the Officer shall return the Change of Control Payment to the Company.

                  (b) If the Officer becomes entitled to a Change of Control
Payment, the Company shall reimburse the Officer for the cost of any COBRA
health insurance continuation coverage under the Company's health plan for a
period of twelve (12) months following the Termination Date. The Company may
require the Officer to provide proof of payment for such continuation coverage
before making any reimbursement hereunder.

         3. Other Benefits. Nothing in this Agreement shall prevent or limit the
Officer's continuing or future participation in or rights under any benefit,
bonus, incentive, or other plan or program provided by the Company, and for
which the Officer may qualify, from the date hereof through the Termination

                                       3
<PAGE>

Date. Without limiting the foregoing, if the Officer is a participant in the
Quipp, Inc. Management Incentive Compensation Plan (the "Plan"), the Officer
shall be entitled to receive payment in accordance with the provisions of
Section 9 of the Plan ("Section 9"), provided, that, following a Change of
Control, the term "cause" as used in Section 9 shall have the meaning set forth
in Section 1(b) of this Agreement, and a Constructive Termination Without Cause
shall not be deemed to be a "voluntary resignation" for the purposes of Section
9.

         4. Taxes. Any Change of Control Payment required under this Agreement
shall be subject to all requirements of the law with regard to the withholding
of taxes, filing, making of reports, and the like, and the Company shall use its
best efforts to satisfy promptly all such requirements.

         5. Certain Reduction of Payments.

                  (a) Notwithstanding anything in this Agreement to the
contrary, in the event that it shall be determined that any payments or
distributions by Quipp or Quipp Systems to the Officer, whether paid or payable
or distributed or distributable pursuant to the terms of this Agreement or
otherwise, would constitute "excess parachute payments" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder, the Change of Control Payment to or for the benefit of
the Officer pursuant to this Agreement shall be reduced (but not below zero) to
the extent necessary so that such payments or distributions shall not constitute
"excess parachute payments."

                  (b) All determinations to be made under Section 5(a) shall be
made by the Company's independent certified public accounting firm immediately
prior to the Change of Control (the "Accounting Firm"). The Accounting Firm
shall provide its determinations and any supporting calculations to both the
Company and the Officer within sixty (60) days of the Termination Date, and such
determinations shall be binding upon the Company and the Officer. All of the
fees and expenses incurred by the Accounting Firm in performing the
determinations above shall be borne solely by the Company.

         6. Confidentiality.

                  (a) During or after the Termination Date, the Officer shall
not (i) use or exploit in any manner Confidential Information for himself or any
person, partnership, association, corporation, or other entity other than the
Company; (ii) remove any Confidential Information, or any reproduction thereof,
from the possession or control of the Company; or (iii) treat Confidential
Information other than in a confidential manner.

                  (b) All Confidential Information developed, created, or
maintained by the Officer, alone or with others while employed by the Company,
and all Confidential Information maintained by the Officer thereafter, shall
remain at all times the exclusive property of the Company. The Officer shall
return to the Company all Confidential Information, and reproductions thereof,
whether prepared by him or others, that are in his possession immediately upon
request and in any event upon the termination of his employment with the
Company.

                                       4
<PAGE>

         7. Agreement Not to Compete.

                  (a) During the Restricted Period, the Officer shall not, at
any time within the Territory, directly or indirectly, engage in, or have any
interest on behalf of himself or others in, any firm, corporation, or business
(whether as Officer, officer, director, agent, security holder, creditor,
partner, joint venturer, beneficiary under a trust, investor, consultant, or
otherwise) that engages within the Territory in a Restricted Business; provided,
however, that nothing contained herein shall prevent or prohibit the Officer
from owning of record or beneficially up to one percent (1%) of the stock or
equity of any corporation or other business entity engaged in the Restricted
Business if such corporation or other entity is traded on the New York Stock
Exchange, the American Stock Exchange, or the NASDAQ National Market. In
addition, during the Restricted Period, the Officer shall not directly or
indirectly solicit or otherwise encourage any of the Company's employees to
terminate their employment with the Company.

                  (b) If a court determines that the foregoing restrictions are
too broad or otherwise unreasonable under applicable law, including with respect
to time, space or business, the court is hereby requested and authorized by the
parties hereto to revise the foregoing restriction to include the maximum
restrictions allowable under applicable law. The Officer acknowledges, however,
that this Section 9 has been negotiated by the parties hereto and that the
geographical and time limitations, as well as the limitation on activities, are
reasonable in light of the circumstances pertaining to the business of the
Company.

         8. Cumulative Remedies; No Waiver.

                  (a) In the event the Officer violates either Section 6 or
Section 7, the Officer shall immediately repay any Change of Control Payment
received under this Agreement to the Company.

                  (b) The Officer expressly acknowledges that the remedy at law
for any breach of Sections 6 or 7 will be inadequate and that upon any such
breach or threatened breach, the Company shall be entitled as a matter of right
to injunctive relief in any court of competent jurisdiction, in equity or
otherwise, and to enforce the specific performance of the Officer's obligations
under these provisions without having to prove actual damage to the Company or
the inadequacy of a legal remedy.

                  (c) No right conferred upon a party by this Agreement is
intended to be exclusive of any other right or remedy, and each and every such
right or remedy shall be cumulative and shall be in addition to any other right
or remedy given hereunder or now or hereafter existing at law or in equity. No
delay or omission by a party in exercising any right, remedy, or power hereunder
or existing at law or in equity shall be construed as a waiver thereof.

         9. Notice. All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith shall be in writing
and shall be delivered personally or mailed by registered or certified mail,
return receipt requested, or by overnight express courier service, as follows:

                                       5
<PAGE>

                              If to the Company, to:

                              Quipp, Inc.
                              4800 NW 157th Street
                              Miami, FL 33014-3464
                              Attention:  President

                              With a copy to:
                              Alan Singer, Esq.
                              Morgan, Lewis & Bockius LLP
                              1701 Market Street
                              Philadelphia, PA  19103

                              If to the Officer, to:

                              Michael S. Kady
                              12124 St. Andrews Place
                              Apt. 108
                              Mirimar, FL   33025

or to such other names or addresses as the Company or the Officer, as the case
may be, shall designate by notice to the other party hereto in the manner
specified in this Section. Any such notice shall be deemed delivered and
effective when received in the case of personal delivery, five (5) days after
deposit, postage prepaid, with the U.S. Postal Service in the case of registered
or certified mail, or on the next business day in the case of overnight express
courier service.

         10. Governing Law. This Agreement shall be governed by and interpreted
under the laws of the State of Florida without giving effect to any conflict of
laws provisions.

         11. Contents of Agreement; Amendment; Assignment.

                  (a) This Agreement supersedes all prior agreements, sets forth
the entire understanding between the parties hereto with respect to the subject
matter hereof and cannot be changed, modified, extended, or terminated except
upon written amendment executed by the Officer and the Company.

                  (b) Nothing in this Agreement shall be construed as giving the
Officer any right to be retained in the employ of the Company.

                  (c) This Agreement shall be binding upon, and shall inure to
the benefit of, the Company and the Officer, and their respective successors and
assigns. The Company shall have the right to assign its rights hereunder to any
successor in interest, whether by merger, consolidation, sale of assets, or
otherwise.

         12. No Mitigation. The Company agrees that, if the Officer's employment
with the Company terminates during the term of this Agreement, the Officer is
not required to seek other employment or to attempt in any way to reduce any

                                       6
<PAGE>

amounts payable to the Officer by the Company pursuant to the terms hereof.
Further, the amount of any payment or benefit provided for in this Agreement
shall not be reduced by any compensation earned by the Officer as the result of
employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Officer to the Company, or otherwise.

         13. Severability. Any invalidity, illegality, or limitation of the
enforceability with respect to any one or more of the provisions of this
Agreement, or any part thereof, shall in no way affect or impair the validity,
legality, or enforceability of any other provisions of this Agreement. In case
any provision of this Agreement shall be invalid, illegal, or unenforceable, it
shall, to the extent practicable, be modified so as to make it valid, legal, and
enforceable and to retain as nearly as practicable the intent of the parties,
and the validity, legality, and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.

         14. Term of Agreement. This Agreement shall commence on the date hereof
and shall continue in effect until twenty-four (24) months beyond the month in
which a Change in Control occurs.

         15. Survivorship. The respective rights and obligations of the parties
under this Agreement shall survive any termination of the Officer's employment
to the extent necessary for the preservation of such rights and obligations.
Without limiting the foregoing, the right to receive a Change of Control Payment
under Section 2 of this Agreement shall survive the termination of this
Agreement.

         16. Miscellaneous. All section headings are for convenience only. This
Agreement may be executed in several counterparts, each of which is an original.
It shall not be necessary in making proof of this Agreement or any counterpart
hereof to produce or account for any of the other counterparts.

                                       7
<PAGE>

                  IN WITNESS WHEREOF, the undersigned, intending to be legally
bound, have executed this Agreement as of the date first above written.

                                               QUIPP, INC.

                                               By: /s/ Richard H. Campbell
                                                   ------------------------
                                               Its:   Chairman of the Board

                                               QUIPP SYSTEMS, INC.

                                               By: /s/ Eric Bello
                                                   ------------------------
                                               Its:   Treasurer

                                               OFFICER

                                               /s/ Michael S. Kady
                                                   ------------------------
                                               Michael S. Kady

                                       8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}]]