Document:

<PAGE>   1
                                                                    EXHIBIT 10.3

                          CONSENT AND RELEASE AGREEMENT

        This Consent and Release Agreement (this "Agreement") is entered into
this 29th day of March, 2000, by and among Citizens Telecommunications Company,
Inc., a Delaware corporation ("Citizens"), Sonus Communication Holdings, Inc.,
a Delaware corporation ("Sonus"), EOT Acquisition Corporation, a Delaware
corporation and wholly-owned subsidiary of Sonus ("New EOT"), Empire One
Telecommunications, Inc., a New York corporation ("Old EOT"), W. Todd Coffin
("Coffin"), and John K. Friedman ("Friedman").

        WHEREAS, on April 4, 1997, Old EOT entered into a Collateral Note (the
"Old Note") and Security Agreement (the "Old Security Agreement") with
Citizens;

        WHEREAS, Friedman, Paul A. Butler ("Butler") and Bradley D. Lewis
("Lewis" and, together with Butler, the "EOT Principals"), entered into a
Personal Guaranty (the "Old Guaranty") and Stock Pledge Agreement (the "Old
Stock Pledge") dated April 4, 1997 (the Old Note, Old Security Agreement, Old
Guaranty and Old Stock Pledge, together with any other ancillary and/or
predecessor documents, are sometimes collectively referred to herein as the Old
Loan Documents);

        WHEREAS, Old EOT entered into a merger agreement (the "Merger
Agreement") with Sonus dated November 15, 1999, pursuant to which Old EOT
proposes to merge with and into New EOT;

        WHEREAS, in consideration for the consent and approval granted herein
and as part of the transactions contemplated hereby, the Old Loan Documents,
including but not limited to the Old Note, will be terminated and deemed
satisfied and Sonus and New EOT will enter into the New Loan Documents (as
defined below) including but not limited to the New Note (as defined below)
with Citizens with new collateral to be substituted for the collateral given to
secure the Old Note.

        WHEREAS, New EOT will be the surviving corporation following the merger
and, as part of the merger, may change its name to "Empire One
Telecommunications, Inc."; and

        WHEREAS, the Old Loan Documents require the consent of Citizens to
consummate the transactions contemplated by the Merger Agreement;

        NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, each of the parties hereto
agree as follows:

1.      Citizens hereby provides its consent to and approval of the consummation
        of the transactions contemplated by the Merger Agreement and the
        ancillary documents to be entered into in connection therewith,
        including but not limited to the consummation of the merger of Old EOT
        with and into New EOT, with New EOT to be the surviving

<PAGE>   2
        corporation following the merger, and waives any and all defaults,
        violations, conflicts and other breaches, if any, of the Old Loan
        Documents in connection therewith.

2.      As soon as practicable following receipt by Sonus of proof of filing
        and acceptance of the Articles of Merger to be filed with the State of
        New York and the Certificate of Merger to be filed with the State of
        Delaware pursuant to the Merger Agreement (i) Sonus, New EOT and
        Citizens shall execute and deliver to one another that certain
        Collateral Note attached hereto as Exhibit A (the "New Note") and
        Security Agreement attached hereto as Exhibit B (the "New Security
        Agreement"); and (ii) Coffin, Friedman and Citizens shall execute and
        deliver to one another that certain Personal Guaranty attached hereto
        as Exhibit C (the "New Guaranty") and Stock Pledge Agreement attached
        hereto as Exhibit D (the "New Stock Pledge" and, together with the New
        Note, New Security Agreement and New Guaranty, collectively, the "New
        Loan Documents").

3.      Upon the execution and delivery of the New Loan Documents as described
        in Section 2 hereof (i) each of the Old Loan Documents, together with
        any and all other documents, agreements (oral or written), notes,
        guarantees or other writings evidencing or purporting to evidence any
        obligations of Old EOT or any of the EOT Principals (or any of their
        respective successors, affiliates or assigns), including but not
        limited to the Old Guaranty, shall immediately terminate and thereafter
        become null and void, and all obligations and liabilities thereunder
        shall be fully and unconditionally released and deemed satisfied in
        full, it being understood that Citizens' rights with respect to the
        parties hereto shall thereafter be pursuant to the New Loan Documents
        only; (ii) Citizens shall release from escrow or cause to be released
        from escrow any and all Old EOT shares held pursuant to the Old Stock
        Pledge Agreement, and cause the same to be delivered to Cecil E.
        Martin, III, Esquire, on or prior to the closing date of the
        transactions contemplated by the Merger Agreement, to be held in escrow
        by Mr. Martin until the New Loan Documents have been executed and
        delivered to Citizens; and (iii) Citizens shall file a UCC-3 to
        terminate the financing statement bearing number 972562 94 and listing
        Citizens Telecommunications Company as secured party and Empire One
        Telecommunications, Inc. as Debtor, and take all such further action as
        may be necessary to terminate its security interest in, and any and all
        other rights to or financing statements filed covering, any assets or
        other collateral in each jurisdiction (other than "now owned and
        hereafter acquired accounts, including, but not limited to, accounts
        receivable and contract rights, client base list, chattel paper,
        documents and instruments and the right to receive payment under them"
        of New EOT and/or Sonus); and (iv)  Sonus and New EOT shall execute and
        deliver to Citizens a UCC-1 financing statement covering Sonus' and New
        EOT's "now owned and hereafter acquired accounts, including, but not
        limited to, accounts receivable and contract rights, client base list,
        chattel paper, documents and instruments and the right to receive
        payment under them".

4.      Each party hereto shall take such further action including but not
        limited to the execution of such further documents, releases, consents
        and other agreements as may be reasonably requested by the other party
        or parties to evidence the effect and effectuate the intent of this
        Agreement.
<PAGE>   3

5.      All notices, requests and other communications hereunder must be in
        writing and will be deemed to have been duly given only if delivered
        personally against written receipt or by facsimile transmission or
        mailed by prepaid first class certified mail, return receipt requested,
        or delivered by a nationally recognized overnight courier service
        prepaid, to the parties at the following addresses or facsimile
        numbers:

               (a) If to Sonus or EOT Acquisition, to:

                               Sonus Communication Holdings, Inc.
                               1600 Wilson Boulevard, Suite 1008
                               Arlington, Virginia 22209
                               Attention: Richard D. Rose
                               Telecopier: 703-527-8865

                          with a copy to:

                               Cecil E. Martin, III, Esquire
                               McGuire, Woods, Battle & Boothe LLP
                               7 St. Paul Street, Suite 1000
                               Baltimore, Maryland 21202
                               Telecopier: 410-659-4535

               (b) If to the EOT Principals, to:

                               Empire One Telecommunications, Inc.
                               254 West 31st Street
                               New York, New York 10001
                               Attention:  John K. Friedman
                               Telecopier:  212-904-1032

                          with a copy to:

                               David E. Bronston, Esquire
                               Wolf, Block, Schorr and Solis-Cohen LLP
                               250 Park Avenue
                               New York, New York 10177
                               Telecopier:  212-986-0604

               (c) If to Citizens, to:

                               Richard Tettelbaum, Esquire
                               Citizens Communications
                               1400 16th Street, NW
                               Washington, DC 20036
                               Telecopier: 202-483-9277

                      with a copy to:

<PAGE>   4
                           Suzann Duffy
                           Citizens Communication
                           3 High Ridge Park
                           Stamford, CT 06905
                           Telecopier: 203-614-6633

        All such notices, requests and other communications will (i) if
        delivered personally to the address as provided in this Section, be
        deemed given upon delivery, (ii) if delivered by facsimile transmission
        to the facsimile number as provided for in this Section, be deemed
        given upon receipt, (iii) if delivered by mail in the manner described
        above to the address as provided in this Section, be deemed given on
        the earlier of the third business day following mailing or upon receipt
        and (iv) if delivered by overnight courier to the address as provided
        for in this Section, be deemed given on the earlier of the first
        business day following the date sent by such overnight courier or upon
        receipt (in each case regardless of whether such notice, request or
        other communication is received by any other person to whom a copy of
        such notice is to be delivered pursuant to this Section). Any party
        from time to time may change its address, facsimile number or other
        information for the purpose of notices to that party by giving notice
        specifying such change to the other parties hereto.

6.      This Agreement and the Exhibits hereto supersede all prior discussions
        and agreements between the parties with respect to the subject matter
        hereof and thereof and contain the sole and entire agreement between
        the parties hereto with respect to the subject matter hereof. This
        Agreement may be amended, supplemented or modified only by a written
        instrument duly executed by or on behalf of each of the parties hereto.

7.      Any term or condition of this Agreement may be waived at any time by
        the party that is entitled to the benefit thereof, but no such waiver
        shall be effective unless set forth in a written instrument duly
        executed by or on behalf of the party waiving such term.

8.      Neither this Agreement nor any right, interest or obligation hereunder
        may be voluntarily assigned by any party hereto without the prior
        written consent of the other parties hereto, and any attempt to do so
        will be void. Subject to the preceding sentence, this Agreement is
        binding upon, inures to the benefit of and is enforceable by the
        parties hereto and their respective heirs, executors, personal
        representatives, successors and assigns.

9.      If any provision of this Agreement is held to be illegal, invalid or
        unenforceable under any present or future law, and if the rights or
        obligations of any party hereto under this Agreement will not be
        materially and adversely affected thereby, (a) such provision will be
        fully severable, (b) this Agreement will be construed and enforced as
        if such illegal, invalid or unenforceable provision had never comprised
        a part hereof, (c) the remaining provisions of this Agreement will
        remain in full force and effect and will not be affected by the
        illegal, invalid or unenforceable provision or by its severance here
        from and (d) in lieu of such illegal, invalid or unenforceable
        provision, there will be added automatically

<PAGE>   5
        as a part of this Agreement a legal, valid and enforceable provision as
        similar in terms to such illegal, invalid or unenforceable provision as
        may be possible.

10.     This Agreement shall be governed by and construed in accordance with
        the domestic laws of the State of New York, without giving effect to
        any choice of law or conflict of law provision or rule (whether of the
        State of New York or any other jurisdiction) that would cause the
        application of the laws of any jurisdiction other than the State of New
        York.

11.     This Agreement may be executed in any number of counterparts, each of
        which will be deemed an original, but all of which together will
        constitute one and the same instrument. This Agreement may be executed
        and delivered by facsimile transmission.

12.     Butler and Lewis shall be deemed to be third-party beneficiaries of this
        Agreement and shall be entitled to the benefit of and to enforce their
        rights hereunder to the same extent as if they had been made a party
        hereto.

<PAGE>   6

        IN WITNESS WHEREOF, the parties have executed this Consent and Release
Agreement by their duly authorized representatives on the date first set forth
above:

                                    CITIZENS TELECOMMUNICATIONS CO., INC.

                                    By: /s/ Charles J. Weiss
                                       -----------------------------------------
                                    Name:  Charles J. Weiss
                                    Title: Secretary

                                    EOT ACQUISITION CORP.

                                    By: /s/ W. Todd Coffin
                                       -----------------------------------------
                                    Name:  W. Todd Coffin
                                    Title: President and Chief Executive Officer

                                    SONUS COMMUNICATION HOLDINGS, INC.

                                    By: /s/ W. Todd Coffin
                                       -----------------------------------------
                                    Name:  W. Todd Coffin
                                    Title: President and Chief Executive Officer

                                    EMPIRE ONE TELECOMMUNICATIONS, INC.

                                    By: /s/ John K. Friedman
                                       -----------------------------------------
                                    Name:  John K. Friedman
                                    Title: Chief Executive Officer

                                    /s/ John K. Friedman
                                    --------------------------------------------
                                    John K. Friedman<PAGE>   1
Exhibit 10.1

                                 April 21, 2000

Security Associates International, Inc.
2101 S. Arlington Heights Rd.
Suite 100
Arlington Heights, IL 60005-4142

KC Acquisition Corp.
P. O. Box 1943
South Hackensack, NJ 07606-0543

TJS Partners, L.P.
115 East Putnam Avenue
Greenwich, CT  06830

Ladies and Gentlemen:

     This letter agreement will confirm our mutual understanding concerning the
transactions described herein (the "Transactions") by and among
SecurityVillage.com Inc. ("SecurityVillage"), Security Associates International,
Inc. ("SAI"), KC Acquisition Corp. ("King"),; TJS Partners. L.P. ("TJS") and
certain individuals whose names appear on the signature pages hereof.
SecurityVillage, King and SAI are referred to herein collectively as the
"Corporate Parties". The terms of the Transactions are as follows:

Monital Acquisition. (a) King shall be assigned all of SecurityVillage's rights
to acquire, directly or indirectly, Monital Signal Corporation ("Monital") as
set forth in the most current drafts of the share purchase agreement, investment
agreement and related documentation (the "Monital Documentation") subject to the
continued negotiations between SecurityVillage, King and the sellers of Monital.
The acquisition of Monital is referred to in this letter as the "Monital
Acquisition." This assignment of SecurityVillage's rights shall be subject to
the execution of the King Acquisition Agreement (as defined in Section 3(a)(i)
below) and SV/SAI Agreement (as defined in Section 3(a)(ii) below) and shall
become effective immediately prior to the closing of the Monital Acquisition,
which shall occur no later than May 2, 2000, for a cash purchase price of $12.5
million together with the assumption of Monital's debt of approximately $1.4
million (less the $450,000 to be received pursuant to Section 2(d) below and the
amount of certain incentive payments to employees of Monital and other amounts
Monital is obligated to pay pursuant to the Monital Documentation). The current
and proposed documentation negotiated by SecurityVillage with King (the "King
Documentation"), together with the Monital Documentation, shall be used to
effect the Monital Acquisition, subject to any adjustments that may be required
due to the substitution of SAI for SecurityVillage as the party acquiring King.

         (b) Simultaneous with the consummation of the Monital Acquisition, (i)
each of the Corporate Parties shall be deemed to have satisfactorily completed
its due diligence referred to in Section 3(b) below in connection with the
Transactions (provided that each Corporate Party may continue to request
information from the other Corporate Parties relating to the Transactions

<PAGE>   2

following the consummation of the Monital Acquisition, and all such parties will
use their best commercial efforts to comply with such requests); (ii)
SecurityVillage (or a designee that will allow King to preserve its status as an
S Corporation) shall acquire 8% of the equity of King (on a fully diluted basis
after giving effect to the Monital Acquisition) for $1.5 million (or in lieu
thereof SecurityVillage shall acquire a call option for such 8% equity interest
or another investment vehicle that provides equivalent economic value to
SecurityVillage); (iii) SecurityVillage shall have the right to receive (subject
to and upon consummation of the closing of the King Acquisition referred to in
Section 2 below) one million shares of common stock of SAI in exchange for
SecurityVillage assigning its right to acquire Monital; and (iv) the parties
hereto shall be deemed to have irrevocably agreed that all of the other
Transactions shall be consummated.

King Acquisition and Investment in SAI. (a) Security Village, SAI and King shall
use best commercial efforts to close into escrow the acquisition by SAI of King
on or before June 30, 2000 by way of a nontaxable stock acquisition of King
except to the extent of cash received (the "King Acquisition"). The
consideration for the King Acquisition shall be (i) for King's equity holders
other than SecurityVillage, $5 million payable in cash, plus shares of senior
preferred stock of SAI (ranking senior to the outstanding preferred stock
currently held by TJS) -with an aggregate liquidation preference of $22.5
million and convertible into 4.5 million shares of common stock of SAI, and (ii)
for SecurityVillage through the conversion of its 8% equity holding in King,
300,000 shares of common stock of SAI. Upon the actual closing of the King
Acquisition, SecurityVillage shall acquire 1,200,000 shares of common stock of
SAI for $6.0 million (the "SAI Investment").

         (b) The actual closing of the King Acquisition and the SAI Investment
shall be subject to the approval of the stockholders of SAI. SAI agrees to call
a meeting of its stockholders for the purpose of considering and voting on the
King Acquisition and the SAI Investment, and to promptly take all actions
necessary and desirable to obtain stockholder approval of the same. This
includes without limitation promptly filing and seeking approval of the
Securities Exchange Commission ("SEC") of the proxy statement soliciting such
stockholder approval.

         (c) King represents and warrants to SAI that King will have a basis of
at least $18 million in depreciable assets for federal income tax purposes
immediately prior to the closing of the King Acquisition, it being understood
and agreed that SAI will not be making an election under Section 338 of the
Internal Revenue Code for a stepped-up basis in King's assets.

         (d) Simultaneously with the consummation of the Monital Acquisition,
Palisades Partners, or its assignee, shall acquire the retail accounts of
Monital for a cash purchase price of $450,000, conditioned on the closing of the
Monital Acquisition, which payment shall be applied to the outstanding debt held
by Shrewsbury Bank. Palisades Partners reserves the right to provide a loan to
Monital in an amount sufficient to release any liens or encumbrances on said
retail accounts. Any such loan from Palisades or its successor shall be on
identical terms to the Shrewsbury Bank debt. Simultaneous with the King
Acquisition closing, any such "replacement debt" shall be discharged by SAI.

         (e) SecurityVillage, together with SAI and King, shall make a public
announcement, as mutually agreed by SecurityVillage, SAI and King, of the SAI
Investment, the King

<PAGE>   3

Acquisition, the Monital Acquisition and the other Transactions at any time
after May 2, 2000. The announcement shall be made in compliance with applicable
SEC requirements.

Obligations with Respect to Certain Transactions. (a) The parties hereto agree
to negotiate in good faith and to use all commercially reasonable efforts to
cause by May 2, 2000: (i) SAI and King to have entered into a binding agreement
providing for the King Acquisition (the "King Acquisition Agreement"), (ii)
SecurityVillage and SAI to have entered into a binding agreement, subject to the
approval of the stockholders of each of SecurityVillage and SAI, setting forth
the definitive terms of the Transactions (the "SV/SAI Agreement"), and (iii)
King to have consummated the Monital Acquisition.

     (b) The parties hereto acknowledge that this letter constitutes an
agreement in principle regarding the matters covered hereby and is subject to:

           (i)   execution and delivery of definitive documentation regarding
     the Transactions;

           (ii)  completion by SAI, to its reasonable satisfaction, of its due
     diligence investigation of SecurityVillage and King;

           (iii) completion by King, to its reasonable satisfaction, of its due
     diligence of Monital and SAI; and

           (iv)  completion by SecurityVillage, to its reasonable satisfaction,
     of its due diligence of SAI, King and Monital;

provided that the respective obligations of the parties contained in Sections 3
and 8-19 and Exhibit A will be binding on the parties upon execution of this
letter. The parties shall negotiate in good faith the terms and conditions of
definitive documentation concerning the Transactions in order to execute and
deliver such documentation by May 2, 2000. Any attempt to negotiate terms which
would constitute a deviation in any material respect from those set forth herein
or to cease to expeditiously negotiate and execute the definitive agreements
shall constitute a breach of good faith, provided that a party may negotiate in
good faith additional terms that are intended to ensure the enforceability of,
and compliance by the parties with, the business principles and understandings
set forth in this letter. In the event of any such breach (i) by
SecurityVillage, SecurityVillage (and its affiliates and shareholders) shall be
precluded for a period of two (2) years thereafter from engaging in any
transactions with SAI or King, (ii) by SAI, SAI (and its affiliates and
shareholders) shall be precluded for a period of two (2) years thereafter from
engaging in any transactions with SecurityVillage or King, or (iii) by King,
King (and its affiliates and shareholders) shall be precluded for a period of
two (2) years thereafter from engaging in any transactions with SecurityVillage
or SAI.

         (c) In the event that (i) SAI does not enter into a definitive
agreement with King providing for the King Acquisition by May 2, 2000; (ii) SAI
does not close into escrow the King Acquisition by June 30, 2000; or (iii) SAI
fails to enter into the SV/SAI Agreement by May 2, 2000 due to no failure on the
part of SecurityVillage to negotiate in good faith, then:

         (x) SecurityVillage shall have the option to acquire King, and King
shall have the option to require SecurityVillage to acquire King, by way of a
stock purchase for the purchase price and upon the terms set forth in Exhibit A
(such options being referred to herein collectively as the "King Option"). The
King Option shall remain in effect through June 30, 2002;

<PAGE>   4

          AND

    (y)   in the event of clauses (c)(i) or (c)(ii) only, SecurityVillage and
SAI shall nevertheless consummate the other Transactions, notwithstanding any
agreement between SAI and King to the contrary which may limit SAI from doing
so, including without limitation the letter of intent (the "SAI/King LOI")
between SAI and King dated April 5, 2000 (which SAI and King explicitly agree is
superceded by this letter).

This letter shall serve as the interim agreement among King, SecurityVillage,
Thomas Few and Timothy McGinn with respect to the exercise of the King Option.
Such parties shall convert the terms of the King Option as set forth in this
letter into a more formal option agreement by May 2, 2000. King, Thomas Few and
Timothy McGinn shall negotiate the terms of such option agreement in good faith
and use their best efforts to cause any other holders of equity interests in
King to enter into such option agreement. In the event that the parties do not
enter into such option agreement, the put and call option feature of the King
Option, as set forth in this Exhibit A, shall nevertheless be a binding and
enforceable obligation of King, Thomas Few and Timothy McGinn with respect to
the equity interests in King that Thomas Few and Timothy McGinn hold or
otherwise control (e.g., through trusts or other investment vehicles). King,
Thomas Few and Timothy McGinn represent and warrant to SecurityVillage that: (A)
Thomas Few and Timothy McGinn hold and control 80% and 20%, respectively, of the
stock of King on a fully diluted basis; (B) the entire capitalization of King
(including all outstanding shares of stock, warrants, options and other
securities or other rights to acquire equity of King) consists only of 200
shares of common stock, all of which are issued and outstanding; and (C) prior
to the execution and delivery of more formal documentation relating to the King
Option with all of the stockholders of King, no changes will be made to the
capitalization of King without the prior written consent of SecurityVillage
(which may be withheld in its sole discretion), including without limitation the
grant or issuance of any shares of stock or any warrants, options or other
securities (or other rights to acquire equity of King), unless the purchasers of
such securities agree in writing to be subject to the King Option as provided in
this letter.

    (d)      If SecurityVillage breaches its obligations hereunder or under the
SV/SAI Agreement to consummate the Transactions, neither King nor
SecurityVillage shall be entitled to exercise the King Option nor shall
SecurityVillage be entitled to engage in any other transaction with King for a
period of two (2) years thereafter. If King breaches its obligation hereunder to
consummate the King Acquisition under the King Acquisition Agreement or its
other obligations hereunder or in any documentation related to the Transactions,
it shall not be entitled to engage in any other transaction with SecurityVillage
or SAI for a period of two (2) years thereafter, and SecurityVillage and SAI
shall nevertheless consummate the other Transactions, notwithstanding any
agreement between SAI and King to the contrary which may limit SAI from doing
so, including without limitation the SAI/King LOI. If SAI breaches its
obligations hereunder, including but not limited to the failure to consummate
the Transactions under the SV/SAI Agreement, it shall be precluded for a period
of two (2) years thereafter from engaging in any transactions with
SecurityVillage or King, and SecurityVillage shall have the King Option.

    (e)      The parties hereto acknowledge that the consummation of the Monital
Acquisition is scheduled to take place on or prior to April 17, 2000.
SecurityVillage will negotiate in good faith to obtain an extension of the
closing date for the Monital Acquisition to May 2, 2000, and SecurityVillage
hereby represents that Monital has indicated a willingness to extend the closing

<PAGE>   5

date until May 2, 2000. If SecurityVillage is unable to obtain an extension to
May 2, 2000, then all of the Transactions (other than the Monital Acquisition)
shall nevertheless proceed.

    (f)      If the Monital Acquisition shall fail for any reason to close on
May 2, 2000, then all other Transactions shall nevertheless proceed and all
financial terms of the other Transactions shall remain unchanged, except as
provided elsewhere in this letter (including the exhibits hereto).

Equity and Other Arrangements between SAI and SecurityVillage.

    (a)      Simultaneously with the consummation of the King Acquisition,
SecurityVillage shall pay a premium of $1.00 per share multiplied by 3,000,000
shares, or $3,000,000, to the existing shareholders of King for an option to
acquire from such shareholders such number of shares of SAI preferred stock as
are convertible into 3,000,000 shares of SAI common stock. Such option will be
exercisable on or before January 2, 2002 at $5.00 per share..

    (b)      Simultaneously with the consummation of the King Acquisition,
SecurityVillage shall pay a premium of $0.30 per share multiplied by 250,000
shares, or $75,000, to the existing shareholders of King for a supplemental
option (i.e., supplemental to the option under Paragraph (a) above) to acquire
from such shareholders such number of shares of SAI preferred stock as are
convertible into up to 250,000 shares of SAI common stock. Such option will be
exercisable on or before January 2, 2002 at $6.20 per share.

    (c)      SecurityVillage shall have an option, for a period of six years
following the consummation of the King Acquisition, to acquire from SAI a
"Matching Number of Shares" of common stock of SAI at a price of $5.00 per
share. The term "Matching Number of Shares" shall mean a number of shares of SAI
common stock that is equal to the sum of: (i) the total number of shares of SAI
common stock that may be acquired upon the exercise of all stock options and
other equity participation rights that are outstanding as of the consummation of
the King Acquisition (including without limitation any options and rights
granted by the SAI Board of Directors that are subject to shareholder approval
at such time), and (ii) the total number of shares of SAI common stock issued in
connection with the exercise of any options and other equity participation
rights between the date of this letter and the consummation of the King
Acquisition; provided, however, that the "Matching Number of Shares" shall not
include the up to 300,000 shares that may be issued under employee stock
purchase, dealer incentive and middle management incentive plans referred to in
the last paragraph of Section 5(c). The parties estimate that there are
2,814,127 such shares as of the date of this letter.

    (d)      Simultaneously with the consummation of the King Acquisition,
Thomas Salvatore shall receive an option to acquire shares representing 1% of
the total outstanding common stock of Security Village at the next funding
round's strike price following the date of this letter. The option agreement
will contain usual and customary terms for options of this type.

    (e)      After a Qualifying IPO (as defined in Section 5(a) below) of
SecurityVillage, TJS and the holders of Preferred Stock in SecurityVillage shall
be entitled to participate in a registration of up to $30 million of
SecurityVillage equity on the basis of 75% to TJS and 25% to the Preferred Stock
holders of SecurityVillage; and in a registration in excess of $30 million of

<PAGE>   6

SecurityVillage equity, on a cumulative basis with all prior registrations, 50%
to TJS and 50% to the Preferred Stock holders of SecurityVillage with respect to
each dollar in excess of $30 million. Notwithstanding the foregoing, in the
event that SecurityVillage does not acquire from the existing King shareholders
at least 80% of the 3,250,000 shares of SAI preferred stock that SecurityVillage
has options to acquire pursuant to Sections 4(a) and 4(b) above prior to the
expiration date of such options, such existing King shareholders shall be
entitled to participate with TJS and Preferred Stock holders of SecurityVillage
in a registration in excess of $50 million of SecurityVillage equity, on a
cumulative basis with all prior registration, as follows with respect to each
dollar in excess of $50 million: 45% to TJS, 45% to Preferred Stock holders of
SecurityVillage, and 10% to the existing King shareholders.

    (f)      In consideration for the Transactions contemplated by this letter,
SAI and King shall enter into six-year agreements that provide SecurityVillage
the rights set forth in Exhibits B and C hereto (the "Dealer Agreements").
SecurityVillage, King and SAI shall enter into the Dealer Agreements by May 2,
2000.

    (g)      Appropriate investment documents will be negotiated and prepared as
part of the definitive agreements to be entered into by May 2, 2000 to effect
the options and equity investments to be made by the parties under this Section
4 and elsewhere in this letter.

Put/Call Arrangements; First Refusal Right. As used below, the term "IPO" refers
to a firm commitment underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, covering
the offer and sale of common stock for the account of SecurityVillage. A
"Qualifying IPO" refers to an IPO or private placement with an aggregate price
paid for shares of common stock offered and sold for the account of
SecurityVillage of not less than $35 million at a price per share that reflects
a valuation of the combined SecurityVillage and SAI entity of at least $400
million prior to SecurityVillage's receipt of the purchase price for the shares
offered and accepted in the IPO or private placement.

    (b)  SecurityVillage and SAI shall have the following "put" and "call"
         options:

         (i)    In the event there is a Qualifying IPO of SecurityVillage on or
     before December 31, 2001, SAI shall have a "put" option to require
     SecurityVillage to consummate a merger, on the terms set forth in Paragraph
     (c) below, of SAI into SecurityVillage with SecurityVillage as the
     surviving entity immediately prior to the closing of the Qualifying IPO.

         (ii)   In the event there is a Qualifying IPO of SecurityVillage on or
     before December 31, 2001, SecurityVillage shall have a "call" option to
     require SAI to consummate a merger, on the terms set forth in Paragraph (c)
     below, of SAI into SecurityVillage with SecurityVillage as the surviving
     entity immediately prior to the closing of the Qualifying IPO.

         (iii)  In the event there is an IPO of SecurityVillage on or before
     December 31, 2001 that does not constitute a Qualifying IPO,
     SecurityVillage shall have a "call" option to require SAI to consummate a
     merger, on the terms set forth in Paragraph (c) below, of SAI into
     SecurityVillage immediately prior to the closing of the IPO, provided that
     the price per share to the public in the IPO is such that the aggregate
     value of the shares of

<PAGE>   7

     SecurityVillage common stock received by SAI shareholders as a result of
     the merger is the greater of:

                    (x)     $5.00 per share; or

    (y)      the aggregate valuation of their SAI shares immediately prior to
the merger as determined based on the average trading price of SAI common stock
during the 20 trading days ending 10 days prior to the closing of the IPO
(subject to appropriate adjustment for stock splits, recapitalizations and the
like of SAI stock).

         (iv)   In the event that the average trading price of the SAI common
     stock during any consecutive 20 trading days is equal to or greater than
     $5.00 per share, SecurityVillage shall have a "put" option, exercisable at
     any time on or before December 31, 2001, to require SAI to consummate a
     merger, on the terms set forth in Paragraph (c) below, of SecurityVillage
     into SAI with SAI as the surviving entity within 120 days after the
     exercise of this option by SecurityVillage.

         (v)    If none of the options described in Subparagraphs (i) - (iv)
     have been exercised on or before December 31, 2001, thereafter SAI shall
     have a "call" option, for the duration of the term of the SAI Dealer
     Agreement, to require SecurityVillage to consummate a merger, on the terms
     set forth in Paragraph (c) below, of SecurityVillage into SAI with SAI as
     the surviving entity within 120 days after the exercise of this option by
     SAI, provided that (x) the average trading price of SAI common stock during
     the 20 trading days ending 10 days immediately prior to the exercise of
     this option is not less than $5.00 per share, and (y) the SecurityVillage
     shareholders receive actual consideration paid per share at closing of the
     merger of not less than $5.00 per share of SAI common stock based on the
     average trading price of SAI common stock during the 20 day trading period
     immediately prior to the closing of the merger.

         (vi)   The exercise by SecurityVillage of the "put" and "call" options
under Subparagraphs (ii) - (iv) above is conditional upon SecurityVillage or
investors solicited by SecurityVillage:

                         (x) investing at least $6 million in SAI common stock
                    at a minimum of $5.00 per share (provided that
                    SecurityVillage's obligation under this Subparagraph (x)
                    shall be fulfilled if it or any such investor offers to make
                    such an investment and SAI does not accept the offer);

                         (y) investing at least $1.5 million in King; and

                         (z) receiving at least $20 million of equity funding
                    for SecurityVillage at a minimum of an $95 million
                    post-money valuation.

         (vii)  In the case of paragraphs (i) through (v) above, no party
     exercising one of the "put" or "call" options may exercise such option if
     that party has had bankruptcy proceedings established.

<PAGE>   8

    (c)      In the event that either SecurityVillage or SAI exercises one of
the "put" or "call" options described in Subparagraphs (i) - (v) above or in
Paragraph (d)(i) below, the shareholders of each party will collectively hold
shares in the surviving entity immediately following the closing of the merger
in the proportions set forth below.

<TABLE>
<CAPTION>

SECURITYVILLAGE SHAREHOLDERS                                    SHARES
----------------------------                                 --------------
<S>                                                          <C>
Base shares received by SecurityVillage (Section 5(b)            25,571,100
above)
Monital Acquisition and SAI Investment  (Sections 1 and 2         2,500,000
above)
"Matching" option to SecurityVillage (Section 4(c) above)         2,814,127
Call option on King shares (Section 4(a) above)                   3,000,000
Supplemental call option on King shares (Section 4(b)               250,000
above)
                                                             --------------
    TOTAL:                                                       34,135,227

SAI SHAREHOLDERS

Current number of outstanding shares                             21,071,100
King shares (Section 2 above)                                     4,500,000

     Subtotal                                                    25,571,100

Outstanding options (excluding employee stock purchase,           2,814,127
dealer incentive and middle management incentive plans -
Section 4(c) above)

Less exercise of SecurityVillage call option on King
shares (Section 4(a) above)                                      (3,000,000)

Less exercise of SecurityVillage supplemental call
option on King shares (Section 4(b) above)                         (250,000)
                                                             --------------

   TOTAL                                                         25,135,227

</TABLE>

The number of shares set forth in the capitalization table above are provided
for illustrative purposes. The capitalization shown above is based on a merger
of SecurityVillage into SAI which assumes all outstanding shares of preferred
stock have been converted into common stock, and SecurityVillage exercises all
of the options and warrants granted under this letter agreement.

<PAGE>   9

The actual number of shares of the surviving entity that are received by the
respective shareholders of SecurityVillage and SAI will vary depending on
whether SecurityVillage or SAI is the surviving entity and on any changes to the
capitalization of the surviving entity through the issuance of additional shares
of stock, stock splits, recapitalizations and the like.

The relative proportion of shares received according to the capitalization table
set forth above, directly or through the exercise of the warrants and options
granted hereunder, by SecurityVillage and SAI shareholders (the "Relative
Proportion"), however, shall remain unchanged regardless of:

       (i)   whether SecurityVillage or SAI is the surviving entity or the
     companies are consolidated into a new entity;

      (ii)   stock splits, recapitalizations and the like; and

     (iii)   except as provided below, regardless of any new equity
     investments in either company following the date of this letter or other
     changes in their capitalization.

SAI represents and warrants that the information contained in the capitalization
table set forth above is accurate with respect to (i) the current number of
issued and outstanding shares of common stock of SAI on a fully diluted basis,
and (ii) the current number of shares of common stock of SAI that may be
acquired upon the exercise of outstanding options and other equity participation
rights under employee stock purchase, dealer incentive and middle management
incentive plans of SAI, no other options, warrants, convertible securities or
other rights to acquire equity interests in SAI existing or being considered. In
the event that the number in item (i) above is inaccurate, a share-for-share
adjustment (upward or downward) shall be made to the number of shares under the
"Value of SecurityVillage" category in the above capitalization table. In the
event that the number in item (ii) above is incorrect, a share-for-share
adjustment (upward or downward) shall be made pursuant to Section 4(c) above to
the "Matching Options to SecurityVillage" category under the above
capitalization table.

Changes will be made to the Relative Proportion only if:

        (x)   SecurityVillage does not exercise some or all of the warrants and
     call options referred to above, in which case SecurityVillage shareholders
     will not receive the Relative Proportion of shares in the surviving or new
     entity represented by such warrants and call options as reflected in the
     above illustration; or

        (y)   SecurityVillage, as a separate entity (i.e. not combined with
     SAI), receives in excess of $20 million of equity capital, in which case
     the Relative Proportion may be increased in SecurityVillage's favor based
     on the amount of equity capital raised, subject to SAI and TJS approval.

No Corporate Party shall enter into any capital transaction through December 31,
2001, other than in the ordinary course of business or as contemplated in this
letter, without the consent of the other Corporate Parties hereto (which consent
shall not be unreasonably withheld). For clarification, SecurityVillage is
seeking to obtain up to $35 million in additional funding (including the
$20,000,000 contemplated in (y) above) through December 31, 2000, and

<PAGE>   10

additional capital thereafter to fund its business objectives. In recognition of
this, the definitive agreements to be entered into hereunder by the parties
will: (i) set forth mechanisms through which SAI and SecurityVillage may enter
into capital transactions, if necessary, in a manner consistent with Section
5(c)(iii)(y) above, and (ii) establish commercially reasonable standards by
which such capital transactions may occur.

SAI agrees that any issuance of shares of preferred or common stock, or the
grant or issuance of any security or other instrument that by its terms is
exercisable for or convertible into, directly or indirectly, equity of SAI under
any circumstances, shall be with the consent of SecurityVillage; provided,
however, that such consent shall not be required with respect to the issuance of
(i) up to 300,000 shares under existing employee stock purchase, dealer
incentive and middle management incentive plans, or (ii) shares issued upon the
exercise of currently outstanding stock options as well as options granted by
SAI's Board of Directors that are subject to shareholder approval as of the date
of this letter. SAI represents and warrants that the shares of common stock
issuable upon exercise of all options and other equity participation rights do
not exceed 2,814,127 shares (as reflected in the above capitalization table),
plus an additional allowance for the issuance of up to a maximum of 300,000
shares for employee stock purchase, dealer incentive and middle management plans
(for which matching shares under Section 4(c) will not be issued to
SecurityVillage)

         (d) In addition to the "put" and "call" options described in Paragraph
(b) above, in the event of a proposed Sale (as defined below) of SAI to one or
more third parties on or before December 31, 2001 at a price that would result
in:

                  (i) the SAI shareholders participating in the Sale receiving
         consideration valued at equal to or greater than $5.00 per share of SAI
         stock, SecurityVillage shall have a "put" right to require SAI to
         consummate a merger of SecurityVillage into SAI immediately prior to
         the Sale; and

         (ii) the SAI shareholders participating in the Sale receiving
         consideration valued at less than or equal to $8.00 per share of SAI
         stock, SecurityVillage shall have a right of first refusal to acquire
         SAI (or shares of SAI stock) for cash consideration equal to the value
         of the consideration offered by the third parties.
For clarification, if the consideration received is valued at between $5.00 and
$8.00 per share, SecurityVillage may elect either the put option under item (i)
above or the first refusal right under item (ii) above.

SAI shall provide SecurityVillage written notice of the terms offered by the
third parties, and SecurityVillage shall have: (i) 30 days to provide written
notice of its intent to exercise its right of first refusal; and (ii) an
additional 90 days in which to consummate the transaction. As used above, the
term "Sale" refers to any transaction or series of related transactions
involving the merger or consolidation of SAI into another entity (other than
SecurityVillage), any sale of at least 10% of the account base of SAI, or any
sale of a controlling interest in the voting securities of SAI.

In the event of a proposed sale of SecurityVillage to one or more third parties
on or before December 31, 2001, the same economic rights shall apply to SAI.

<PAGE>   11

         (e) It is the intent of the parties to structure the "put" and "call"
transactions referred to in this Section 5 in a manner that would be tax-free to
the all parties.

Registration. The 2.5 million shares of SAI which SecurityVillage shall purchase
and receive pursuant to Sections 1(b)(iii) and 2(a) above shall be registered by
SAI within 6 months of obtaining shareholder approval of the SAI Investment as
provided in Section 2(b) above, and SAI shall use best efforts to cause such
registration to occur sooner if practicable. Should SAI merge into
SecurityVillage pursuant to any of the Transactions with SecurityVillage as the
surviving entity, then: (i) SAI shares that were freely tradable prior to the
merger shall be exchanged for shares of SecurityVillage that are registered and
freely tradable following its IPO; and (ii) SAI shares that were not freely
tradable prior to the merger shall be exchanged for shares of SecurityVillage
that are registered following its IPO, but will be subject to a 180-day lock-up.

Should SecurityVillage merge into SAI pursuant to any of the Transactions with
SAI as the surviving entity, then: (i) all registered SAI shares held by
SecurityVillage prior to the merger shall become freely tradable following the
merger; and (ii) all SecurityVillage shares shall be exchanged for registered
shares of SAI following the merger, but will be subject to a 180-day lock-up.

Board of Directors. (a) SAI, TJS and SecurityVillage shall take all necessary
action so that, after the execution and delivery of the SV/SAI Agreement and
prior to the actual closing of the King Acquisition (including the other
Transactions intended to occur at such time), one Board observer from each of
SAI and SecurityVillage will be permitted to serve on the other company's Board.
Such observers shall receive notice of and be included in all Board meetings and
in discussions of material matters involving Board decisions.

         (b)    After the actual closing of the King Acquisition (including the
other Transactions intended to occur at such time) and prior to the merger or
combination of SAI and SecurityVillage, the Board of Directors of
SecurityVillage will consist of seven members (i) three of whom shall be
designated by St. Martins Holdings II Limited, (ii) one of whom shall be
designated by SAI , and (iii) three of whom shall be designated by Audiogard
International. In addition, SecurityVillage shall be permitted to designate one
member to SAI's Board of Directors, and SAI and SecurityVillage shall continue
to have one outside Board observer from each of SAI and SecurityVillage on the
other company's Board. SecurityVillage shall have the right to expand its Board
to include additional members designated by any new investors or strategic
"partners" to the extent required by the terms of any agreements with them.
Moshe Cohen and Craig Marshak shall remain as co-chairmen of the Board of
Directors.

         (c)    Upon a merger or consolidation of SecurityVillage and SAI, the
Board of Directors of the surviving or new entity will consist of ten members
(i) two of whom shall be the co-chairmen referred to below, (ii) one of whom
shall be the chief executive officer of such entity, (iii) two of whom shall be
designated by Audiogard International, (iv) two of whom shall be designated by
St. Martins Holdings II Limited, (v) two of whom shall be designated by TJS, and
(vi) one of whom may be designated by any new investors or strategic "partners."
The Board of such surviving or new entity will have two co-chairmen, one of whom
shall be Moshe Cohen and the other shall be Ron Davis.

Non-Solicitation. None of the parties to this agreement nor any of their
respective representatives will assist or encourage others to, directly or
indirectly, for a period of one year

<PAGE>   12

from the date of this letter, induce or attempt to persuade any investor or
prospective investor of one of the parties to invest in another party or its
affiliates, where no prior relationship existed.

Media Releases. Except as explicitly contemplated herein and subject to Section
2(e), without the prior written consent of the other parties hereto, no party
will make any release to the press or other public disclosure with respect to
the Transactions, except for such public disclosure as may be necessary for the
party proposing to make the disclosure not to be in violation of or default
under any applicable law, regulation or governmental order. Notwithstanding
anything to the contrary herein, in the event that a party (the "Disclosing
Party") believes that it is necessary to make a public disclosure prior to the
parties entering into the definitive agreements referred to in Section 3(a)(i)
and (ii) above with respect to the existence or terms of this letter or any of
the Transactions contemplated hereby in order to avoid being in violation of or
default under any applicable law, regulation or governmental order, the
Disclosing Party shall so notify the other parties in writing at least ten (10)
days in advance of making such disclosure. In such event, SecurityVillage shall
have the option to terminate this letter and the Transactions contemplated
hereby in order to avoid such disclosure (in which case the Disclosing Party
shall not publicly disclose the existence of this letter or the Transactions
contemplated hereby). SecurityVillage shall exercise this option within seven
(7) days after receipt of written notice from the Disclosing Party.

Non-Disclosure. As used below, "Confidential Information" refers to any and all
oral, written, electronic or other information designated as confidential or
which ought to be considered as confidential from its nature or from the
circumstances surrounding its disclosure, regardless of whether such information
was disclosed before, on or after the date of this letter. Confidential
Information includes without limitation each party's business plans. Each
party's Confidential Information shall remain the property of that party and
shall be held in strict confidence by the other parties. In addition, as a
condition to being able to commence due diligence in connection with the
Transactions, each Corporate Party shall execute and deliver Confidentiality
Agreements to one another substantially in the form of Exhibit D hereto. Each
party may use Confidential Information of another party only as permitted by
this Agreement.

Compliance; Corporate Actions. SecurityVillage, SAI and King shall use their
best efforts to ensure that none of their respective affiliates or shareholders
take any action that would be inconsistent with the fulfillment of their
obligations under this letter. SecurityVillage, SAI and King shall deliver Board
resolutions approving all necessary corporate actions required to fulfill their
obligations under this letter (subject to stockholder approval where required).
It is intended that the definitive agreements shall contain provisions
irrevocably obligating the following shareholders to vote their shares of stock
in favor of all corporate actions required for the Corporate Parties to fulfill
their respective obligations under this letter: (a) with respect to
SecurityVillage: Moshe Cohen, Chris Dreyfus, Bernard Garbacz, Audiogard
International and St. Martins Holdings II Ltd.; (b) with respect to SAI: TJS,
James Brannen and Ron Davis; and (c) with respect to King: Thomas Few and
Timothy McGinn.

Expenses.  Each of the parties shall pay its own expenses in connection with
this letter agreement.

Notices.   All notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent

<PAGE>   13

by telecopy, to the parties at their addresses or facsimile numbers set forth
herein and shall be deemed to have been given on the date of receipt

Remedies. The parties hereto agree and acknowledge that money damages would not
be a sufficient remedy for any breach of any provision of this agreement by any
of the parties hereto and that any such breach would constitute immediate and
irreparable harm, and that in addition to all other remedies which any party
hereto may have, each party will be entitled to specific performance and
injunctive or other equitable relief as a remedy for any such breach.

Entire Agreement. This letter, together with the exhibits hereto and the Monital
Documentation and King Documentation, supercedes all prior discussions and
agreements between the parties with respect to the subject matter hereof and
contains the sole and entire agreement between the parties hereto with respect
to the subject matter.

Exclusive Agreement. Except as expressly provided in this letter, without the
prior written consent of all of the other Corporate Parties hereto, no Corporate
Party shall enter into any transaction or agreement with any other Corporate
Party hereto. The preceding sentence shall not apply to ordinary course of
business between TJS and James Brannen or between TJS and SAI. Further,
SecurityVillage and SAI shall use reasonable efforts to disclose to each other,
and provide the other an opportunity to participate in negotiation and/or
discussions regarding, any prior, ongoing or future material corporate
development or discussions. Notwithstanding anything to the contrary herein, the
provisions of this Section 16 shall terminate in the event that SecurityVillage
and SAI do not enter into the SV/SAI Agreement on or before May 2, 2000.

Governing Law. This letter shall be governed by and construed in accordance with
the laws of the State of New York.

Counterparts. This letter may be executed in counterparts and delivered by
facsimile, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.

Assignment. No party may assign or transfer this letter or any of its rights or
obligations hereunder without the prior written consent of the other parties.
Subject to the foregoing, this letter shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns.

If the foregoing terms and conditions are acceptable to you, please so indicate
by signing the enclosed copy of this letter and returning it to the attention of
the undersigned.

                                                     Very truly yours,

                                                     SecurityVillage.com Inc.

                                                    By:
                                                       -------------------------
                                                       Name:
                                                            --------------------
                                                       Title:
                                                             -------------------

<PAGE>   14

ACCEPTED AND AGREED TO AS OF THE DATE
         OF THIS LETTER AGREEMENT:

SECURITY ASSOCIATES INTERNATIONAL, INC.

By:
   ------------------------------------
     Name:
          -----------------------------
     Title:
           ----------------------------
Telecopy No. 847-956-9360

KC ACQUISITION CORP.

By:
   ------------------------------------
     Name:
          -----------------------------
     Title:
           ----------------------------
Telecopy No. 201-488-5090

With respect to Sections 4(e), 5(c)(y), 7(a) and 8 - 19 only:

TJS PARTNERS. L.P.

By: TJS Management, L.P.
     General Partner

       By: TJS Corporation
           General Partner

                By:
                   --------------------
                   Thomas J. Salvatore
                   President

Telecopy No. 203-629-9594

With respect to Sections 11 and 8 - 19 only:

-------------------------------------------
         James S. Brannen

With respect to Sections 3(c),11 and 8 - 19 and Exhibit A only:

-------------------------------------------
         Thomas Few

-------------------------------------------
         Timothy McGinn

<PAGE>   15

                                                                       Exhibit A

                              TERMS OF KING OPTION

Until June 30, 2002, SecurityVillage will be entitled, but not obligated, to
exercise its call option for all of the issued and outstanding shares of common
and preferred stock of King, and all rights to acquire, directly or indirectly,
any shares of common or preferred stock of King, including all securities and
other instruments that by their terms are exercisable for or convertible into
shares of stock of King (collectively, the "Shares"), upon payment of the
applicable purchase price. For clarification, the term "Shares" includes the 8%
equity interest to be taken by SecurityVillage in King pursuant to Section 1(b)
of this letter. Except as provided below, the purchase price shall be payable in
cash. SecurityVillage may exercise this call option by giving written notice to
the holders of the Shares being acquired by SecurityVillage.

Subject to the adjustments described below, the purchase price for all of the
Shares shall be the greater of (i) $48,600,000 less existing indebtedness of
King at the time of exercise of the call option, and (ii) an amount calculated
as follows:

         Y = (A x 37) + (B x 26) + (C x 30) + (D x 4), less existing
         indebtedness of King at the time of exercise of the call option,

             where:

             Y      is the price payable by SecurityVillage;
             A      is the wholesale recurring monthly revenues ("RMR")
                    of King at the date of exercise of the call option;
             B      is the wholesale RMR of Monital at the closing date of the
                    Monital Acquisition;
             C      is the excess of the wholesale RMR of
                    Monital at the date of exercise of the call option over B;

             D      is the incremental wholesale RMR of Monital at the
                    date of exercise of the call option directly
                    attributable to accounts delivered to King by
                    SecurityVillage.

The RMR shall be calculated based on the calendar month ending one month prior
to the exercise of the call option.

At SecurityVillage's election, SecurityVillage may pay the portion of the
purchase price equal to A x 37 in the above formula either (i) entirely in cash,
or (ii) A x 30 in cash and A x 7 in shares of SecurityVillage common stock
valued at the IPO price of such shares.

The purchase price for the Shares is based on the assumption that King has
acquired Monital prior to the closing of SecurityVillage's purchase of the
Shares. In the event that King has not acquired Monital prior to such closing,
the above formula shall be adjusted to be:

<PAGE>   16

   Y = (A x 37), less existing indebtedness of King at the time of exercise of
the call option,

with SecurityVillage having the right to elect to pay A x 37 entirely in cash or
partly in cash and partly with SecurityVillage stock as described above.

The purchase price of the Shares is for 100% of the Shares, including the 8%
equity interest to be taken by SecurityVillage in King pursuant to Section 1(b)
of the letter. Accordingly, if SecurityVillage takes such 8% equity interest in
King (either in the form of shares of common stock of King, an option or other
right to acquires shares of common stock or equivalent economic value), the
holders of Shares other than SecurityVillage will receive 92% of the purchase
price set forth above.

At the discretion of King, up to one third of the purchase price payable by
SecurityVillage may be satisfied by the issue to King's shareholders of Series C
preferred stock of SecurityVillage.

In the event of an IPO of SecurityVillage, King shall have a put option to
require SecurityVillage to acquire all, but not less than all, of the Shares of
King, exercisable within 15 days after a determination by SecurityVillage to
initiate its IPO, for the purchase price set forth in this Exhibit A (after
taking into account all applicable adjustments set forth above); provided,
however, that at SecurityVillage's election, SecurityVillage may pay the portion
of the purchase price equal to A x 37 in the applicable formula set forth above
either (i) entirely in cash, or (ii) A x 27 in cash and A x 10 in shares of
SecurityVillage common stock valued at the IPO price of such shares. Should
SecurityVillage elect to use shares of its common stock, the shares must be
registered and freely tradable at the time of the IPO, but will be subject to
any underwriter restrictions that may apply. King may exercise this put option
by giving written notice to SecurityVillage within thirty (30) days after
receiving written notice from SecurityVillage informing King of
SecurityVillage's intent to file a registration statement for an IPO. In the
event that the IPO is of a holding or successor company of SecurityVillage, this
put option shall apply to such holding or successor company.

Upon exercise of the put or call option, SecurityVillage shall issue to King's
shareholders warrants to acquire a number of shares of common stock of
SecurityVillage that, collectively for all warrants, equals two percent of the
fully diluted share capital of SecurityVillage as of the earlier to occur of (i)
the effective date of SecurityVillage's registration statement for its IPO, or
(ii) the closing date of any merger or combination of SAI and SecurityVillage.
Such warrants shall be exercisable only upon the occurrence of an IPO of
SecurityVillage. The exercise price of the warrants shall be the IPO price. In
the event that the IPO is of a holding or successor company of SecurityVillage,
the warrants shall relate to shares in such holding or successor company.

Additionally, in the event the put or call option has been exercised and there
is an IPO of SecurityVillage, Messrs. Thomas Few and Timothy McGinn will be
entitled to subscribe for, at the IPO price, up to three percent of the shares
of common stock to be offered and sold by SecurityVillage in its IPO (or, if
relevant, by any holding or successor company the subject of the IPO).

<PAGE>   17

Simultaneous with SecurityVillage's tender of the purchase price in connection
with the exercise of the put or call option, the selling shareholders shall
transfer all of their Shares to SecurityVillage, free and clear of all liens and
encumbrances of any kind.

<PAGE>   18

                                                                       Exhibit B

                   KEY RIGHTS UNDER DEALER AGREEMENT WITH SAI

SecurityVillage shall have the following rights relative to the business of SAI:

     a)   access to SAI dealer networks and customer lists for the purposes of
          marketing its services and pursuing its marketing goals upon terms
          agreeable to both parties;

     b)   solicit the dealer companies of SAI for enrollment and participation
          in the SecurityVillage dealer program. Such program shall include all
          program features developed or substantially developed through December
          31, 2001. Among other things, these program features are expected to
          include the branding of the dealers, use and sale of specialized
          equipment, and adherence to procedures established by SecurityVillage;

     c)   install at its own cost and connect to the operating computers of SAI
          specialized equipment allowing access to the customer information
          through the internet with SAI to have final authority over issues
          relating to control of the firewalls, UL certificates and integration
          with SAI systems;

     d)   to directly solicit the end-user customers of dealers enrolled as
          SecurityVillage dealers to register and use the SecurityVillage
          internet facility; and

     e)   to offer directly or through the SecurityVillage internet facility to
          the end-user customers, as part of the SecurityVillage dealer program,
          additional products and services.

Notwithstanding anything to the contrary in this Exhibit B, SAI will be
obligated only to facilitate the introduction of the SecurityVillage program to
dealers and to actively encourage dealers to participate in such program.
SecurityVillage acknowledges that dealer participation in the program is subject
to obtaining the consent and agreement of individual dealers. SecurityVillage
agrees not to solicit SAI dealers for the purpose of buying their customer
accounts.

The Dealer Agreement may be terminated by SAI in the event that
SecurityVillage's web site is not operational by January 31, 2001.

Either Palisades Partners or M&S Partners will be granted a right of first
refusal with respect to dealer financing for the King and Monital dealers,
SecurityVillage dealers and SAI dealers (to the extent allowable under SAI's
current contractual commitments) through December 31, 2005.

<PAGE>   19

                                                                       Exhibit C

                   KEY RIGHTS UNDER DEALER AGREEMENT WITH KING

SecurityVillage shall have the following rights relative to the business of
King:

     a)   access to King dealer networks and customer lists for the purposes of
          marketing its services and pursuing its marketing goals upon terms
          agreeable to both parties;

     b)   solicit the dealer companies of King for enrollment and participation
          in the SecurityVillage dealer program. Such program shall include all
          program features developed or substantially developed through December
          31, 2001. Among other things, these program features are expected to
          include the branding of the dealers, use and sale of specialized
          equipment, and adherence to procedures established by SecurityVillage;

     c)   install at its own cost and connect to the operating computers of King
          specialized equipment allowing access to the customer information
          through the internet with King to have final authority over issues
          relating to control of the firewalls, UL certificates and integration
          with King systems;

     d)   to directly solicit the end-user customers of dealers enrolled as
          SecurityVillage dealers to register and use the SecurityVillage
          internet facility; and

     e)   to offer directly or through the SecurityVillage internet facility to
          the end-user customers, as part of the SecurityVillage dealer program,
          additional products and services.

Notwithstanding anything to the contrary in this Exhibit C, King will be
obligated only to facilitate the introduction of the SecurityVillage program to
dealers and to actively encourage dealers to participate in such program.
SecurityVillage acknowledges that dealer participation in the program is subject
to obtaining the consent and agreement of individual dealers. SecurityVillage
agrees not to solicit King dealers for the purpose of buying their customer
accounts.

The Dealer Agreement may be terminated by King in the event that
SecurityVillage's web site is not operational by January 31, 2001.

Either Palisades Partners or M&S Partners will be granted a right of first
refusal with respect to dealer financing for the King and Monital dealers,
SecurityVillage dealers and SAI dealers (to the extent allowable under SAI's
current contractual commitments) through December 31, 2005.

<PAGE>   20

                                                                       EXHIBIT D
                            CONFIDENTIALITY AGREEMENT

THIS AGREEMENT is entered into as of this     day of            , 2000, by and
between                   , Inc., a              corporation (hereinafter the
"Company") and                           , a                    corporation
(hereinafter, the "Recipient"), each separately to be a Party and collectively,
the Parties.

WHEREAS, the Company is the owner of certain proprietary and confidential
information relating to

-------------------------------------------------------------------------------;

WHEREAS, Recipient wishes to have access to this proprietary and confidential
information for the purpose of performing due diligence on the Company in
connection with establishing a business relationship with the Company, and is
willing to receive this information under the strict obligation of
confidentiality described below.

NOW, THEREFORE, in consideration of the Company's disclosure of information to
Recipient and the promises set forth below, the parties agree as follows:

1. Confidential Information. "Confidential Information" as used in this
Agreement shall mean all information disclosed to Recipient by the Company,
including any business, investment, customer, technical, strategic, marketing,
sales, product, operational, industry, financial or other information,
applications, notes, memoranda, communications derived from such information,
whether in written, electronic or oral form. Confidential Information does not
include information which (i) is or becomes part of the public domain other than
as a result of disclosure by the Company; (ii) becomes available to Recipient on
a non-confidential basis from a source other than the Company, provided that
source is not bound with respect to that information by a confidentiality
agreement with the Company or is otherwise prohibited from transmitting that
information by a contractual, legal or other obligation; (iii) was in
Recipient's possession prior to disclosure of the same by the Company or (iv) or
is required to be disclosed by a mandatory request of a government agency, a
court order, subpoena or otherwise at law.

Confidential Information as used in this Agreement shall also include the
identity of the Company, its subsidiaries, affiliates, funding, supplier,
advisory and other related entities; and their relationships to the Company.

For clarification, this Agreement shall not apply to public disclosures of the
existence or terms of: (i) the letter dated April 21, 2000 among
SecurityVillage, Security Associates International, Inc., KC Acquisition Corp.,
TJS Partners, L.P., James S. Brannen, Thomas Few and Timothy McGinn (the
"Letter"); or (ii) the definitive agreements that are contemplated by the Letter
(the "Definitive Agreements"). It is understood and agreed that the rights and
obligations of the parties hereto with respect to public disclosures of the
existence and terms of the Letter and Definitive Agreement are or will be set
forth in such documents.

2. Protection and Dissemination of Confidential Information. Recipient agrees
that for a period of three (3) years from the date of this Agreement, it will
not use the Confidential Information for other than the purposes of this
Agreement, shall use all efforts to (i) preserve and ensure the confidentiality
of this Confidential Information; (ii) take proper and adequate precautions at
all times; (iii) not copy or other reproduce the Confidential Information in
whole or in part except with express written permission of the Company; and (iv)
enforce such precautions to preserve the secrecy and confidentiality of the
Confidential Information. Recipient further agrees, without in any way limiting
the generality of the foregoing, to identify to the Company all persons and
other entities having access to the Confidential Information and to take all
necessary action to prevent any prohibited persons from obtaining

<PAGE>   21

access to the Confidential Information whether by direct or indirect exposure
thereto or otherwise.

3.   Ownership of Confidential Information. All Confidential Information shall
be and remain the property of the Company.

4.   Return of Confidential Information. Immediately upon the request of the
Company, Recipient agrees to (i) immediately return all Confidential
Information, including all copies of the same, to the Company; and (ii)
immediately cause any memoranda, summaries, reports, documents or otherwise
created by it that contain or are based in any way on the Confidential
Information to be destroyed and to certify the same in writing to the Company.

5.   Relationship of the Parties. No right or license, express or implied, is
granted to Recipient with respect to any Confidential Information. Nothing in
this Agreement obligates the Company or the Recipient to disclose any
information to the other or creates any agency or partnership relation between
them.

6.   Compelled Disclosure. In the event that Recipient is required by judicial
or administrative process to disclose any Confidential Information, Recipient
shall promptly notify the Company to allow the Company a reasonable time to
oppose such process and, without cost or expense to the Recipient cooperate
fully in such opposition.

7.   Misuse and Misappropriation of Confidential Information. The Parties agree
that the misappropriation or misuse of the Confidential Information may cause
irreparable damage to the Company for which monetary damages may not be
sufficient compensation; and the Company will be entitled to all benefits,
direct and indirect, that accrue from such misappropriation or misuse including,
with limitation or election, all remedies at law and in equity.

8.   Use of and Reliance on Confidential Information. While the Company may
provide Confidential Information to the Recipient, the Recipient understands
that the acceptance or use of any Confidential Information so disclosed under
the terms of this Agreement including but not limited to financial statements
and marketing studies shall be the sole responsibility of the Recipient. The
Company neither represents nor warrants that any such Confidential Information
is audited or verified and that ultimately the Recipient is solely responsible
for any analysis or commitments based thereupon.

9.   Third Part Beneficiary. It is expressly understood and agreed that the
Company's investors are third party beneficiaries of this Agreement and shall
have full rights to enforce the terms and provisions of this Agreement through
direct action in the event of any violation.

10.  Attorneys' Fees. In the event that the Company commences a lawsuit or other
proceeding against Recipient to enforce any of the provisions of this Agreement
or on account of any damages sustained by the Company by reason of Recipient's
violation of any provision of this Agreement, if the Company is the prevailing
Party, Recipient agrees that it shall pay, in addition to other costs and
damages, the Company's reasonable attorneys' fees.

11.  Governing Law. This Agreement shall be governed by and interpreted in
accordance with that laws of the State of New York (without regard to conflict
of laws provisions).

12.  Severability. In the event that any one of the provisions contained in this
Agreement shall be found to be invalid, illegal or unenforceable in any respect
by a court of competent jurisdiction, the validity, legality or enforceability
of the remaining provisions contained in this Agreement shall not in any way be
effected or impaired by such a finding.

<PAGE>   22

13.  Waiver. Failure or omission by either Party at any time to enforce or
require strict or timely compliance with any provision of this Agreement shall
not affect or impair that provision in any way or the rights or such Party to
avail itself of the remedies it may have with respect to any breach of that
provision. Any waiver or consent given by either Party must be in writing, shall
be effective only as to that instance and will not be construed as a bar to or a
waiver of any right on any other occasion.

14.  Injunctive Relief. Recipient agrees that should it breach or threaten to
breach any provision of this Agreement, the Company will suffer irreparable
damages and its remedy at law will be inadequate. Upon any breach or threatened
breach by Recipient, the Company shall be entitled to Injunctive Relief in
addition to any other remedy at law or in equity which it may have.

15.  Entire Agreement. This Agreement contains the entire agreement of the
Parties and supersedes any and all prior agreements, written or oral, between
the Parties relating to the subject matter of this Agreement and may not be
amended unless agreed to in writing by both Parties.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.

                                         The Company:
                                         [name of entity]
                                         [address]

                                         By:
                                            ------------------------------------
                                         Name:
                                              ----------------------------------
                                         Title:
                                               ---------------------------------

                                         Recipient:
                                         [name of entity]
                                         [address]

                                         By:
                                            ------------------------------------
                                         Name:
                                              ----------------------------------
                                         Title:
                                               ---------------------------------

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