Document:

Exhibit
10.2

 

POI ACQUISITION I, INC.

 

 

October 18, 2004

 

Protection One, Inc.

818 South Kansas Avenue

Topeka, Kansas  66612

Attn:       Darius G. Nevin

Executive Vice President and Chief Financial Officer

 

Dear Mr. Nevin:

 

1.             We
refer to the:  (a) Equity Standstill
Agreement, dated as of February 17, 2004 (the “Agreement”), by and
between Protection One, Inc. (“POI”) and POI Acquisition I, Inc. (“POI
Acquisition”); (b) letter from POI Acquisition to POI, dated May 17, 2004,
amending the term of the Agreement; (c) letter from POI Acquisition to POI,
dated May 24, 2004, further amending the term of the Agreement; (d) letter from
POI Acquisition to POI, dated May 28, 2004, further amending the term
of the Agreement; (e) letter from POI Acquisition to POI, dated June 28, 2004,
further amending the term of the Agreement; (f) letter from POI Acquisition to
POI, dated July 26, 2004, further amending the term of the Agreement; (g)
letter from POI Acquisition to POI, dated August 23, 2004, further amending the
term of the Agreement; and (h) letter from POI Acquisition to POI, dated
September 20, 2004, further amending the term of the Agreement (the “Seventh
Letter Agreement”).  Capitalized terms
used but not defined herein shall have the meanings ascribed to such terms in the
Agreement.

 

2.             Pursuant
to section 2.02 of the Agreement, the Agreement shall terminate and be of no
further force and effect on the Specified Date (which currently, under clause
(i) of section 2.02 of the Agreement, as amended by the Seventh Letter Agreement,
is 11:59 p.m. prevailing Eastern Time on October 18, 2004).  By this letter agreement and at your request,
we hereby agree to further amend the definition of the Specified Date to mean
the earlier of:  (i) 11:59 p.m.
prevailing Eastern time on the date that is 252  days after the
Effective Time (the “Outside Date”) (the period beginning with the Effective
Time and continuing through and including the Outside Date, the “Outside
Standstill Period”); or (ii) the occurrence of any Equity Standstill Termination
Event.  We also hereby agree that the
Outside Standstill Period shall be automatically extended three (3) consecutive
times by seven (7) day periods (and the definition of Outside Date shall be
further amended accordingly), without any further action required to be taken
by either party hereto, unless POI Acquisition delivers written notice of
non-extension to POI pursuant to Paragraph 4 of this letter agreement on
October 22, 2004, October 29, 2004 or November 5, 2004.  Under no circumstance shall the Outside
Standstill Period exceed 273 days pursuant to the terms of this letter
agreement.

 

 

Except as otherwise provided herein, the
Agreement shall remain in full force and effect subject to the terms and
provisions thereof.

 

3.             Notwithstanding
anything to the contrary contained herein, in the event that POI Acquisition
delivers written notice of termination to POI pursuant to Paragraph 4 of this
letter agreement, this letter agreement and the Outside Standstill Period shall
terminate effective as of two business days following the date of receipt of
such written notice by POI.

 

4.             Any
written notice to be given pursuant to this letter agreement by POI Acquisition
shall be sufficiently given if sent by overnight delivery service or by
facsimile transmission, with receipt confirmed, as follows:

 

Protection One, Inc.

4221 W. John Carpenter Freeway

Irving, Texas, 75063 

Attn: J. Eric Griffin, General Counsel

Facsimile: (972) 916-6195

 

with a copy to:

 

Kirkland & Ellis LLP

200 E. Randolph Drive

Chicago, Illinois 60601

Attn: Anup Sathy

Facsimile: (312) 861-2200

 

*              *              *              *

 

 

This letter agreement may be executed in
counterparts.  Please confirm your
agreement with the foregoing by signing and returning to the undersigned the
duplicate copy of this letter agreement enclosed herewith.

 

Very truly yours,

 

	
  POI ACQUISITION I, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/  David
  A. Tanner

  	
   

  
	
  Name:

  	
  David A. Tanner

  
	
  Title:

  	
  President

  
				

 

 

Agreed as of the date first written above:

 

	
  PROTECTION ONE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/  Darius
  G. Nevin

  	
   

  
	
  Name:

  	
  Darius G. Nevin

  
	
  Title:

  	
  Exec. Vice PresidentExhibit 10.6.2

 

Silicon Valley Bank

 

Amendment to Loan and Security Agreement

 

	
  Borrower:

  	
  DPAC
  Technologies Corp.

  

 

 

Dated as
of: August 30, 2004

 

THIS AMENDMENT TO LOAN AND SECURITY
AGREEMENT (“Amendment”)  is
entered into between SILICON VALLEY BANK (“Bank”) and the borrower named above
(the “Borrower”).

 

Reference is made to the Loan and Security Agreement
between them dated August 30, 2002, as amended from time to time (the “Loan
Agreement”).  Capitalized terms used but
not defined in this Amendment, shall have the meanings set forth in the Loan
Agreement.

 

Borrower and Bank desire to modify the terms of the
Loan Agreement and the parties agree to do so as follows:

 

1.                                      Revised
Sections 2.1.1 and 2.12.  Sections
2.1.1 and 2.1.2 of the Loan Agreement are hereby amended to read as follows:

 

“2.1.1 Revolving
Advances.

 

(a)                                  Bank
will make Revolving Advances not exceeding: 
(i) the lesser of the Committed Revolving Line or the Borrowing Base; minus (ii) the sum of (A) the amount of
all outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit) and (B) all amounts utilized for Cash Management Services.  Amounts borrowed under this Section may
be repaid and reborrowed during the term of this Agreement.  Revolving Advances that are made subject to
the terms and provisions of this clause (a-2) are also referred to herein as
the “Borrowing Base Advances.”

 

(b)                                 To
obtain a Revolving Advance, Borrower must notify Bank by facsimile or telephone
by 12:00 p.m. Pacific time on the Business Day the Revolving Advance is
proposed to be made.  Borrower must
promptly confirm the notification by delivering to Bank the Payment/Advance
Form, in the form attached hereto as Exhibit B. 
Bank will credit Revolving Advances to Borrower’s deposit account.  Bank may make Revolving Advances under this
Agreement based on instructions from a Responsible Officer or his or her
designee or without instructions if any such Revolving Advances are necessary
to meet Obligations which have become due. 
Bank may rely on any telephonic notice given by a person whom Bank
believes is a Responsible Officer or

 

 

such Person’s designee, and
Borrower hereby indemnifies Bank for any loss Bank suffers due to any such
reliance, other than that arising from the gross negligence or willful misconduct
of Bank.  Further, prior to the making of
the first Borrowing Base Advance, Borrower shall comply with the Collateral
audit and other applicable requirements set forth in Section 6.2 hereof.

 

(c)                                  The
Bank’s undertaking to extend credit accommodations under the Committed
Revolving Line terminates on the Revolving Maturity Date, when all Revolving
Advances and related Obligations are immediately due and payable.

 

2.1.2 Letters of Credit Sublimit.

 

Bank will issue or have issued letters of credit for
Borrower’s account (individually referred as a “Letter of Credit” and
collectively referred to herein as the “Letters of Credit”) not exceeding (i)
the lesser of the Committed Revolving Line or the Borrowing Base, minus (ii)
the outstanding principal balance of the Revolving Advances and minus (iii) the
Cash Management Sublimit; however, the face amount of outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit) may not exceed
$500,000.  Each Letter of Credit will
have an expiry date of no later than 180 days after the Revolving Maturity
Date, but Borrower’s reimbursement obligation will be secured by cash on terms
acceptable to Bank at any time after the Revolving Maturity Date if the term of
this Agreement is not extended by Bank. 
Borrower agrees to execute any further documentation in connection with
the Letters of Credit as Bank may reasonably request. ”

 

2.                                      Revised
Section 6.2(d).  Section 6.2(d)
of the Loan Agreement is hereby amended to read as follows:

 

“(d) Bank has the right to audit Borrower’s Accounts
and other Collateral (with results determined to be acceptable to Bank in
accordance with the good faith business judgment of Bank) at Borrower’s
expense, but the audits will be conducted no more often than once every 12 months
unless an Event of Default has occurred and is continuing, provided
that, in any event, such an audit (with results determined  to be acceptable to Bank in accordance
with the good faith business judgment of Bank) shall be conducted upon the
earlier to occur of (i) the Borrower’s request for a Revolving Advance when
first made; or (ii) the date that is six (6) months from the date hereof; and,
in any event, any such first audit shall be promptly initiated and completed
(with results satisfactory to Bank) prior to the making of any Borrowing Base
Advance.

 

3.                                      Revised
Section 6.7.  Section 6.7
of the Loan Agreement is hereby amended to read as follows:

 

“6.7  Financial Covenant.

 

Borrower will maintain at all times and tested as of
the last day of each month a ratio of (A) Quick Assets to (B) Current
Liabilities plus any other
Obligations of Borrower

 

2

 

owing to Bank to the extent they
are not otherwise categorized as Current Liabilities of Borrower, of at least 1.25 to
1.00.”

 

4.                                      Revised
Definitions.  It is hereby agreed
that the defined terms of “Committed Revolving Line” and “Revolving Maturity Date”
shall be deemed modified as follows:

 

“Committed Revolving Line” is an
aggregate amount of advance availability hereunder of up to $2,000,000.

 

“Revolving Maturity Date” is December 3, 2004.

 

5.                                      Fee.  Borrower shall pay to Bank a facility fee
in connection herewith in the amount of $1,875, which shall be in addition to
interest and to all other amounts payable under the Loan Agreement, and which
shall not be refundable.

 

6.                                      Conditions
to Effectiveness.  The following
shall be conditions precedent to the effectiveness of this Agreement:

 

6.1                                 Executed
Counterparts.   Borrower shall deliver to Bank fully executed
and authorized counterparts of this Amendment.

 

6.2                                 Payment
of Fee.  Borrower shall pay to Bank
the fee referred to in Section 6 above, if applicable.

 

7.                                      Representations
True.   Borrower represents and warrants to Bank that
all representations and warranties in the Loan Agreement, as amended hereby,
are true and correct.

 

8.                                      General
Provisions.  The amendments and
modifications set forth in this Agreement shall be deemed effective as of the
date hereof when all conditions to effectiveness have been satisfied, as Bank
has determined.  This Amendment, the Loan
Agreement, any prior written amendments to the Loan Agreement signed by Bank
and the Borrower, and the other written documents and agreements between Bank
and the Borrower set forth in full all of the representations and agreements of
the parties with respect to the subject matter hereof and supersede all prior
discussions, representations, agreements and understandings between the parties
with respect to the subject hereof. 
Except as herein expressly amended, all of the terms and provisions of
the Loan Agreement, and all other documents and agreements between Bank and the
Borrower shall continue in full force and effect and the same are hereby
ratified and confirmed.  This Agreement
may be executed in any number of counterparts, which when taken together shall
constitute one and the same agreement.

 

3

 

IN WITNESS WHEREOF, the parties hereto have executed
this Amendment as of the date first above written.

 

	
  Borrower:

  	
  Bank:

  
	
   

  	
   

  
	
  DPAC TECHNOLOGIES CORP.

  	
  SILICON VALLEY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  
	
  Title

  	
   

  	
   

  	
  Title

  	
   

  	
   

  
									

 

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