Document:

Exhibit 10.1

Exhibit 10.1

EXECUTION VERSION
CONSENT AND FIFTH AMENDMENT 
TO CREDIT AGREEMENT

THIS CONSENT AND FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Consent and Amendment"), dated as of June 30, 2015 (the "Fifth Amendment Effective Date"), is made by and among INTERFACE SECURITY SYSTEMS, L.L.C., a Louisiana limited liability company ("Borrower"), INTERFACE SECURITY SYSTEMS HOLDINGS, INC., a Delaware corporation ("Holdings" and together with Borrower, the "Loan Parties"), CAPITAL ONE, N.A., a national banking association, as administrative agent ("Agent") for the banks from time to time party to the Credit Agreement (as hereinafter defined) (the "Banks"), and the Banks.
WITNESSETH:
WHEREAS, the Loan Parties, the Banks and Agent are parties to that certain Credit Agreement, dated as of January 18, 2013, as amended by (i) that certain Consent and Omnibus Amendment to Loan Documents, dated as of September 30, 2013, (ii) that certain Consent, Waiver and Second Amendment to Credit Agreement, dated as of May 16, 2014, (iii) that certain Third Amendment to Credit Agreement, dated as of August 15, 2014, and (iv) that certain Fourth Amendment to Credit Agreement, dated as of March 30, 2015 (as the same may be further modified, supplemented, amended or restated from time to time, the "Credit Agreement "); 
WHEREAS, SunTx intends to enter into or cause its affiliates to enter into a series of transactions described on Schedule 1 hereto (the "Grand Master Restructuring"), including the creation of Interface Grand Master Holdings, Inc. ("Grand Master"), which will own 100% of the capital stock of Interface Master Holdings, Inc. ("Master") after giving effect to the Grand Master Restructuring;  
WHEREAS, SunTx intends to cause Grand Master to issue Indebtedness that is not Indebtedness of any Loan Party and is not secured by any assets of any Loan Party, which Indebtedness will, at the date of issuance, be in the original principal amount of up to $70,000,000, and which Indebtedness will bear interest a portion of which will be payable “in-kind” by increasing the outstanding principal amount of such Indebtedness from time to time (such initial issuance and such payment “in-kind” issuances, collectively, the "Grand Master Debt Issuance"); and 

WHEREAS, the Loan Parties have requested that Agent and the Required Banks consent to certain aspects of the Grand Master Restructuring that require the consent of the Required Banks under the Credit Agreement, and Agent and the Required Banks are willing to do so on the terms and conditions contained in this Consent and Amendment; 

NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants and agreements hereinafter set forth, and intending to be legally bound hereby, covenant and agree as follows:
1.Recitals.  The recitals are incorporated herein by reference and are acknowledged by the Loan Parties as true and correct statements.

2.Definitions.  Defined terms used herein, unless otherwise defined herein, shall have the meanings ascribed to them in the Credit Agreement.

3.Consent.  

(a)Agent and the Banks hereby consent to the Grand Master Restructuring, including the amendment of the Stockholder Agreement in the form provided to Agent on June 29, 2015 (as such form may be modified prior to execution, provided that any such modification that is materially adverse to Agent and the Banks shall require Agent's prior written consent), as required by Section 7.2.14 [Changes in Documents] of the Credit Agreement.

(b)Except as expressly described above, the consents set forth in this Section 3 shall not constitute a modification or an alteration of any of the terms, conditions or covenants of the Credit Agreement or any other Loan Document, all of which remain in full force and effect, as amended by this Consent and Amendment.  Except as expressly described above, the consents set forth in this Section 3 shall not relieve or release the Loan Parties in any way from any of their respective duties, obligations, covenants or agreements under the Credit Agreement (as amended by this Consent and Amendment) or the other Loan Documents or from the consequences of any Event of Default thereunder.  Agent and the Banks hereby certify to the Loan Parties that as of the date of this Consent and Amendment, Capital One, N.A. comprises all of the Banks party to the Credit Agreement and, accordingly, constitutes the Banks and the Required Banks.

4.Amendments to Credit Agreement.  On the Fifth Amendment Effective Date, the Credit Agreement shall be amended as set forth in this Section 4.

(a)In Section 1.1 [Certain Definitions] of the Credit Agreement, the definition of "Stockholders Agreement" is hereby renamed "Stockholder Agreement" and is amended and restated in its entirety as follows:  

"Stockholder Agreement shall mean that certain Stockholder Agreement, dated as of May 30, 2014, by and among Grand Master, Master and certain stockholders of Grand Master, as amended on or about June 30, 2015, as the same may be amended or modified and in effect from time to time."

(b)Section 1.1 [Certain Definitions] of the Credit Agreement is hereby amended to add thereto the following defined terms in the appropriate alphabetical order:

"Fifth Amendment shall mean that certain Consent and Fifth Amendment to Credit Agreement by and among the Loan Parties, Agent and the Banks, dated as of June 30, 2015."
"Fifth Amendment Effective Date shall mean the "Fifth Amendment Effective Date" as defined in the Fifth Amendment."

"Grand Master shall mean Interface Grand Master Holdings, Inc., a Delaware corporation."
"Grand Master Debt shall mean debt of Grand Master issued on or after the Fifth Amendment Effective Date pursuant to the Grand Master Debt Indenture in the principal amount of approximately $66,000,000 plus the amount of any interest on Grand Master Debt that is paid “in-kind” by increasing the principal amount of such indebtedness from time to time, and all increases or refinancings thereof."

"Grand Master Debt Indenture shall mean the indenture pursuant to which the Grand Master Debt is being issued after the Fifth Amendment Effective Date, as the same may be amended, restated, supplemented or otherwise modified or refinanced from time to time."

(c)In Section 1.1 [Certain Definitions] of the Credit Agreement, the definition of "Change in Control" is hereby amended to add the following phrase immediately prior to the "." at the end of clause (C):  "or a "Change of Control" (as defined in the Grand Master Debt Indenture as in effect on the date thereof) (or words of similar import) occurs under the Grand Master Debt Indenture".  

(d)Section 7.2.14(2) [Changes in Documents] of the Credit Agreement is hereby amended and restated in its entirety as follows:  "The Loan Parties will not amend, replace or terminate or allow the amendment, replacement or termination of, as applicable, the Management Fee Agreement or similar agreements with Parent or its direct or indirect owners or the Stockholder Agreement or the Restructuring Transaction Documents without the prior written consent of the Required Banks."  

(e)Schedule 5.1.2 to the Credit Agreement is hereby amended and restated in its entirety by Schedule 5.1.2 attached to this Consent and Amendment.

5.Representations and Warranties; No Defaults.  Each Loan Party, by executing this Consent and Amendment, hereby certifies and confirms that as of the date of this Consent and Amendment and after giving effect to this Consent and Amendment:  (i) the execution, delivery and performance of this Consent and Amendment and any and all other documents executed and/or delivered in connection herewith have been duly authorized by all necessary corporate or limited liability company action on the part of such Loan Party and do not contravene such Loan Party's articles of incorporation, certificate of formation, 

bylaws, operating agreement or other organizational documents or any Law applicable to such Loan Party; (ii) the representations and warranties of each Loan Party contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects on the date of this Consent and Amendment with the same effect as though such representations and warranties had been made on and as of such date, except (A) representations and warranties that are qualified by materiality, which shall be true and correct on the date of this Consent and Amendment with the same effect as though such representations and warranties had been made on and as of such date and (B) representations and warranties which expressly relate solely to an earlier date or time, which representations and warranties shall be true and correct in all material respects on and as of the specific dates or times referred to therein; (iii) the consummation of the Grand Master Debt Issuance and the execution, delivery and performance of the documents and instruments being entered into in connection therewith would not contravene any Law or any agreement, instrument, order, writ, judgment, injunction or decree to which any Loan Party is a party or by which it is bound or to which it is subject, or result in the creation or enforcement of any Lien, charge or encumbrance whatsoever upon any property (now or hereafter acquired) of any Loan Party, including, without limitation under the Indenture and the Upper Level Debt Indenture; (iv) all consents required under any Law or Recurring Service Contract or other agreement to which a Loan Party is a party or by which it or its property is bound in order to consummate the Grand Master Debt Issuance and operate its business after the consummation of the Grand Master Debt Issuance have been obtained or will be obtained prior to the consummation of the Grand Master Debt Issuance; (v) no Event of Default or Potential Default under the Credit Agreement and the other Loan Documents has occurred and is continuing; and (vi) the Credit Agreement and all other Loan Documents constitute legal, valid, binding and enforceable obligations of each Loan Party party thereto in accordance with the terms thereof, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

6.Conditions of Effectiveness of this Consent and Amendment.  The effectiveness of this Consent and Amendment is expressly conditioned upon satisfaction of each of the following conditions precedent:

(a)The Loan Parties shall have executed and delivered this Consent and Amendment to Agent.  

(b)The Loan Parties shall have delivered to Agent, a certificate, dated as of the Fifth Amendment Effective Date and signed by the Secretary of each Loan Party, certifying as appropriate as to: (i) all corporate or limited liability company action taken by such Loan Party in connection with authorizing the execution, delivery and performance by such Loan Party of this Consent and Amendment and attaching a copy of the relevant resolutions or written consents; and (ii) the fact that there have been no amendments, modifications or other changes in or to such Loan Party's organizational documents, as previously delivered to Agent (except for such amendments or modifications as are attached to the certificate).

(c)After giving effect to this Consent and Amendment, no Potential Default or Event of Default under the Credit Agreement and the other Loan Documents shall have occurred and be continuing. 

7.Post-Closing Covenants.

(a)The Loan Parties shall provide Agent with all documents and instruments pursuant to which the Grand Master Restructuring (including the Grand Master Debt Issuance) is being effected, promptly upon the execution or filing thereof, as applicable, including, without limitation the Grand Master Debt Indenture and the Stockholder Agreement.  

(b)The Loan Parties shall pay the costs and expenses of Agent, including reasonable fees of Agent's counsel, in connection with this Consent and Amendment in the ordinary course.  

8.Release.  

(a)Release.  In further consideration of Agent's and the Banks' execution of this Consent and Amendment, each Loan Party, individually and on behalf of its respective successors (including any trustees acting on behalf of such Loan Party, and any debtor-in-possession with respect to such Loan Party), assigns, Subsidiaries and Affiliates, hereby forever releases Agent and each Bank and their respective successors, assigns, parents, Subsidiaries, and Affiliates and their respective officers, employees, directors, agents and attorneys (collectively, the "Releasees") from any and all debts, claims, demands, liabilities, responsibilities, disputes, causes, damages, actions and causes of actions (whether at law or in equity), and obligations of every nature whatsoever, whether liquidated or unliquidated, whether matured or unmatured, whether fixed or contingent that such Loan Party has or may have against the Releasees, or any of them, which arise from or relate to any actions which the Releasees, or any of them, have or may have taken or omitted to take in connection with the Credit Agreement or the other Loan Documents prior to the date hereof (including with respect to the Obligations and any third parties liable in whole or in part for the Obligations).  This provision shall survive and continue in full force and effect whether or not the Loan Parties shall satisfy all other provisions of the Credit Agreement or the other Loan Documents.  Notwithstanding the foregoing, the foregoing release shall not apply to any manifest errors in Agent's or any Bank's statements of account, ledgers or other relevant records that may exist, as to which the Loan Parties' rights are reserved.  

(b)Related Indemnity.  Each Loan Party hereby agrees that its release of the Releasees set forth in Section 8(a) of this Consent and Amendment shall include an obligation to indemnify and hold the Releasees, or any of them, harmless with respect to any and all liabilities, obligations, losses, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever incurred by the Releasees, or any of them, whether direct, indirect or consequential, as a result of or arising from or 

relating to any proceeding by, or on behalf of any Person, including officers, directors, agents, trustees, creditors, partners or shareholders of such Loan Party or any parent, Subsidiary or Affiliate of such Loan Party, whether threatened or initiated, asserting any claim for legal or equitable remedy under any statutes, regulation, common law principle or otherwise arising from or in connection with the negotiation, preparation, execution, delivery, performance, administration and enforcement of this Consent and Amendment or any other document executed in connection herewith; provided that no Loan Party shall be liable for any indemnification to a Releasee to the extent that any such liability, obligation, loss, penalty, action, judgment, suit, cost, expense or disbursement results from the applicable Releasee's gross negligence or willful misconduct, as finally determined by a non-appealable judgment of a court of competent jurisdiction.  The foregoing indemnity shall survive the payment in full of the Obligations and the termination of the Credit Agreement and the other Loan Documents.

9.Force and Effect.  Except as expressly modified hereby, the Credit Agreement and the other Loan Documents are hereby ratified and confirmed by the Loan Parties and shall remain in full force and effect after the date hereof.

10.Loan Document.  This Consent and Amendment is a Loan Document.  

11.Counterparts.  This Consent and Amendment may be signed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

12.Joint and Several.  The provisions of this Consent and Amendment shall be the joint and several obligation of all Loan Parties and shall be binding on all Loan Parties and their respective successors and assigns.

13.Indemnity; Governing Law; Jury Trial Waiver.  The provisions of Sections 10.3 [Reimbursement and Indemnification of Banks by Borrowers; Taxes], 10.8 [Governing Law] and 10.16 [Consent to Forum; Waiver of Jury Trial] of the Credit Agreement are hereby incorporated by reference, mutatis mutandis, and shall be deemed to be a part hereof as if restated herein in their entirety.  

[SIGNATURES BEGIN ON NEXT PAGE]

[SIGNATURE PAGE 1 OF 2 TO CONSENT AND 
FIFTH AMENDMENT TO CREDIT AGREEMENT]

IN WITNESS WHEREOF and intending to be legally bound hereby, the parties hereto have executed this Consent and Amendment as of the date first above written.

BORROWER:

INTERFACE SECURITY SYSTEMS, L.L.C., a Louisiana limited liability company

By: /s/ Kenneth Obermeyer            
Kenneth Obermeyer, Chief Financial Officer 

GUARANTOR:

INTERFACE SECURITY SYSTEMS HOLDINGS, INC., a Delaware corporation

By:/s/ Kenneth Obermeyer                    Kenneth Obermeyer, Chief Financial Officer

[SIGNATURE PAGE 2 OF 2 TO CONSENT AND 
FIFTH AMENDMENT TO CREDIT AGREEMENT]

AGENT:

CAPITAL ONE, N.A.

By: /s/ Charles Boyle                            Charles Boyle   
Senior Vice President

                        
BANKS:

CAPITAL ONE, N.A.

By:  /s/ Charles Boyle                            Charles Boyle  
Senior Vice President

S-1

Schedule 1
Description of Grand Master Restructuring 
		
	1.
	Interface Grand Master Holdings, Inc. ("Grand Master") was formed as a wholly-owned subsidiary of Interface Master Holdings, Inc. (“IMH”).

		
	2.
	Grand Master formed a new wholly-owned subsidiary, Interface Merger Sub, Inc. (“Merger Sub”).

		
	3.
	Pursuant to Section 251(g) of the General Corporation Law of the State of Delaware, Merger Sub will merge with and into IMH, with IMH as the surviving corporation.  In consideration for the merger, the stockholders of IMH will receive one share of substantially identical Grand Master stock for each prior share of IMH stock and Grand Master will receive one share of IMH stock for each prior share of Merger Sub stock.

		
	4.
	As a result of the merger, IMH will be a wholly-owned subsidiary of Grand Master, and all of the prior stockholders of IMH will be stockholders of Grand Master.

Schedule 5.1.2 to Credit Agreement
Capitalization

Capitalization of Interface Security Systems, L.L.C.:
100% of the authorized LLC Membership Interests of Interface Security Systems, L.L.C. are owned by Interface Security Systems Holdings, Inc.
Capitalization of Interface Security Systems Holdings, Inc. (AS OF THE CLOSING DATE):  

Agreements with Respect to Stock of Interface Security Systems Holdings, Inc.:
		
	1.
	Amended and Restated Stockholder Agreement dated July 16, 2007 by and among Interface Security Systems Holdings, Inc. and the stockholders party thereto, as amended by that certain First Amendment to Amended and Restated Stockholder Agreement, dated May 5, 2010, as amended on May 30, 2014.

Agreements with Respect to Equity Interests in Other Loan Parties
1.    Schedule 5.1.18 is incorporated by reference herein.Exhibit 10.2

Exhibit 10.2

AMENDED AND RESTATED
EMPLOYMENT AND NON-COMPETITION AGREEMENT

This AMENDED AND RESTATED EMPLOYMENT AND NON-COMPETITION AGREEMENT (this “Agreement”), dated as of February 10, 2015, is between Interface Security Systems, L.L.C., a Louisiana limited liability company (the “Employer”), and Michael T. Shaw (the “Employee”).
WHEREAS, Employee and the Employer are parties to that certain Employment and Non-Competition Agreement dated as of December 13, 2001 (the “Employment Contract”); and 
WHEREAS, Employee and the Employer desire to amend and restate the Employment Contract in its entirety.  
NOW, THEREFORE, it is hereby agreed as follows:
Section 1.AMENDED AND RESTATED EMPLOYMENT CONTRACT.  This Agreement amends and restates in its entirety the Employment Contract.
  
Section 2.EMPLOYMENT AND DUTIES.  The Employer hereby employs the Employee, and the Employee hereby accepts employment, upon the terms and subject to the conditions hereinafter set forth.  The Employee shall be employed as the Chief Executive  Officer of the Employer and each of its subsidiaries.  In such capacity, the Employee shall have the responsibilities and duties customary for such offices and such other executive responsibilities and duties as are assigned by the Board of Directors (the “Board”) of Interface Security Systems Holdings, Inc. (“Holdings”), which are consistent with the Employee’s position.  The Employee agrees to devote his full working time and efforts to the performance of his duties to the Employer and each of its subsidiaries.

Section 3.TERM.  The initial term of employment of the Employee under the Employment Contract commenced on December 13, 2001 (the “Commencement Date”) and shall continue until December 31, 2016 (the “Initial Term”), unless earlier terminated pursuant to Section 6, and shall be renewed automatically for one additional one (1) year term thereafter unless terminated by either party by written notice to the other given at least ninety (90) days prior to the expiration of the then current term.

Section 4.COMPENSATION AND BENEFITS.  Until the termination of the Employee’s employment hereunder, in consideration for the services of the Employee hereunder, the Employer shall compensate the Employee as follows:

(a)Base Salary.  The Employer shall pay the Employee, in accordance with the Employer’s then current payroll practices, a base salary (the “Base Salary”) at an annual rate of $472,000.  The Board may in its sole discretion increase Employee’s Base Salary, but in no event will Base Salary be decreased below $472,000.

(b)Bonus.  The Employee shall be eligible to receive from the Employer, for each of the fiscal years of the Employer (each, a “Fiscal Year”) during the term of this Agreement, hereto bonus in an amount determined by the Board in its discretion (the “Bonus”).

 
(c)Vacation.  The Employee shall be entitled to four (4) weeks vacation each calendar year.  Any vacation shall be taken at the reasonable and mutual convenience of the Employer and the Employee.  Accrued vacation not taken in any calendar year will not be carried forward or used in any subsequent calendar year.

(d)Insurance; Other Benefits.  Employee shall be entitled to participate in or receive benefits under all accident, disability, life and health insurance plans, all pension, retirement, deferred compensation and stock incentive plans and all other employee benefit plans maintained by Employer and approved by the Board for participation by senior executives of Employer.

(e)Fringe Benefits.  Employee shall be entitled to receive a company car allowance equal to $1,500 per month.

Section 5.EXPENSES.  The Employer shall reimburse the Employee for all reasonable expenses of types authorized by the Employer and incurred by the Employee in the performance of his duties hereunder.  The Employee shall comply with such budget limitations and approval and reporting requirements with respect to expenses as the Employer may establish from time to time.

Section 6.TERMINATION.  The Employee’s employment hereunder shall commence on the Commencement Date and continue until the expiration of the Initial Term, and any extension of such term pursuant to Section 3 above, except that the employment of the Employee hereunder shall earlier terminate:

(a)Death.  Upon the death of the Employee during the term of his employment hereunder.

(b)Disability.  At the option of the Employer, in the event of the Employee’s Disability (as defined below), upon thirty (30) days’ written notice from the Employer.  For purposes hereof, the Employee shall be deemed to have a “Disability” if an independent medical doctor (selected by the Employer’s health or disability insurer) certifies that the Employee has for three (3) months, consecutive or non-consecutive, in any twelve (12) month period been disabled in a manner which would constitute “disability” for purposes of the disability insurance policy provided by the Employer pursuant to Section 4(f).  Any refusal by the Employee to submit to a medical examination for the purpose of certifying Disability under this Section 6(b) shall be deemed to constitute conclusive evidence of the Employee’s Disability.

(c)For Cause.  For “Cause” immediately upon written notice by the Employer to the Employee.  For purposes of this Agreement, a termination shall be for Cause if the Board shall determine that any one or more of the following has occurred:

(i)the Employee shall have committed an act of fraud, embezzlement, misappropriation of funds or material property or breach of fiduciary duty against the Employer, including, but not limited to, the offer, payment, solicitation or acceptance of any unlawful bribe or kickback with respect to the Employer’s business; or

- 2 -

(ii)the Employee shall have been convicted by a court of competent jurisdiction of, or pleaded guilty or nolo contendere to, any felony; or

(iii)the Employee shall have committed a breach of any of the covenants, terms and provisions of Section 7, 8 or 9 hereof; or

(iv)the Employee shall have breached any one or more of the provisions of (A) this Agreement (excluding Section 7, 8 and 9 hereof) or (B) the Stockholder Agreement dated as of the date hereof among Holdings and its stockholders, and, in each case, such breach shall have continued for a period of twenty (20) days after written notice to the Employee specifying such breach in reasonable detail; or

(v)the Employee shall have refused, after explicit written notice, to obey any lawful resolution of or direction by the Board which is consistent with his duties hereunder; or

(vi)the Employee shall be chronically absent from work (excluding vacation, illnesses or leaves of absence approved by the Board), and such chronic absence shall continue after explicit written notice from the Board.

(d)Resignation or Termination Without Cause.  At any time, upon written notice by either the Employer or the Employee to the other party hereto.

(e)For Good Reason.  At any time, by Employee for “Good Reason”.  For purposes of this Agreement, “Good Reason” shall mean that the Employee has complied with the “Good Reason Process” (as hereinafter defined) following the occurrence of any of the following events (referred to individually as a “Good Reason Event” and collectively as “Good Reason Events”):

(i)any substantial adverse change, not consented to by Employee in a writing signed by him, in the nature or scope of Employee’s responsibilities, authorities, power, functions or duties contemplated by this Agreement,

(ii)any removal, during the term of this Agreement, of Employee from, or any failure by management to nominate Employee to, or if nominated, any failure by the stockholders of Holdings to reelect Employee to, the Board;

(iii)an involuntary reduction in Employee’s Base Salary;

(iv)a breach by Employer of any of its other material obligations under this Agreement and the failure of Employer to cure such breach within thirty (30) days after written notice thereof by Employee; or

(v)the relocation of Employer’s primary offices at which Employee is principally employed to a location more than sixty (60) miles from Employee’s current offices, or the requirement by Employer for Employee to be based anywhere other than Employer’s primary offices at such current location (or more than sixty (60) miles there from) on an extended basis, except for travel on Employer’s business to an extent substantially consistent with Employee’s current business travel obligations.

- 3 -

“Good Reason Process” shall mean that (i) one or more Good Reason Events has occurred; (ii) Employee notifies Employer in writing of the occurrence of such Good Reason Events; (iii) Employee cooperates in good faith with Employer’s efforts, for a period not more than thirty (30) days following such notice, to permit Employer to cure such Good Reason Events or to modify Employee’s employment situation in a manner acceptable to Employee and Employer; and (iv) notwithstanding such efforts, one or more of such Good Reason Events specified continues to exist for a period of more than thirty (30) days following such notice and has not been cured or otherwise modified in a manner acceptable to Employee.
(f)Rights and Remedies on Termination.

(i)If the Employee’s employment hereunder is terminated pursuant to Section 6(a), Section 6(b), Section 6(c) or by Employee pursuant to Section 6(d), then the Employee (or his estate, as applicable) shall be entitled to receive his Base Salary through the date of termination or expiration.

(ii)If the Employee’s employment hereunder is terminated by the Employer pursuant to Section 3, Section 6(d) (other than for resignation by the Employee) or by the Employee pursuant to Section 6(e), then the Employee shall be entitled to continue to receive payment, in accordance with the Employer’s then current payroll practices, of the Employee’s Base Salary, Fringe Benefits, Insurance and other benefits in effect at the time of such termination, for one year (the “Severance Period”), provided, if Employee is employed or engaged as a consultant, advisor or similar position (“Subsequent Employment”) during the Severance Period, the amounts due to Employee under this Section 6(f)(ii) will be reduced by the amounts earned by Employee in his Subsequent Employment.

(iii)If the Employee’s employment hereunder is terminated pursuant to Section 6(a), Section 6(b), Section 6(d), or Section 6(e), then the Employee shall be entitled to payment for any accrued vacation as of the date of termination.

(iv)Except as otherwise set forth in this Section 6(f), the Employee shall not be entitled to any severance, bonus or other compensation after termination other than payment of any portion of his Base Salary through the date of his termination and any expense reimbursements under Section 5 hereof for expenses incurred in the performance of his duties prior to termination; provided that if Employee’s employment is terminated due to Employee’s death or Disability after the end of a Fiscal Year but prior to the payment of any Bonus that has been earned for such Fiscal Year, the Employee, his successors or his heirs, as applicable, shall be entitled to the payment of any such Bonus for such Fiscal Year.

Section 7.INVENTIONS: ASSIGNMENT.  All rights to discoveries, inventions, improvements and innovations (including all data and records pertaining thereto) related to the business of the Employer or any of Holdings or any of its subsidiaries (collectively, the “Interface Companies”), whether or not patentable, copyrightable, registrable as a trademark, or reduced to writing, that the Employee may discover, invent or originate during the term of his employment hereunder, and for a period of six (6) months thereafter, either alone or with others and whether or not during working hours or by the use of the facilities of any of the Interface Companies (“Inventions”), shall be the exclusive property of the Employer.  The Employee shall promptly disclose all Inventions to the Employer, shall execute at the request of the Employer any assignments or other documents the Employer may deem necessary to protect or perfect its rights therein, and shall assist the Employer, at the Employer’s 

- 4 -

expense, in obtaining, defending and enforcing the Employer’s rights therein.  The Employee hereby appoints the Employer as his attorney-in-fact to execute on his behalf any assignments or other documents deemed necessary by the Employer to protect or perfect its rights to any Inventions.

Section 8.CONFIDENTIAL INFORMATION.  The Employee recognizes and acknowledges that certain assets of the Employer and the other Interface Companies, including, without limitation, information regarding customers, pricing policies, methods of operation, proprietary production processes, proprietary computer programs, sales, products, profits, costs, markets, key personnel, formulae, product applications, technical processes, and trade secrets (hereinafter called “Confidential Information”) are valuable, special, and unique assets of the Interface Companies and their affiliates.  The Employee shall not, during or after his term of employment, disclose any or any part of the Confidential Information to any person, firm, corporation, association, or any other entity for any reason or purpose whatsoever, directly or indirectly, except as may be required pursuant to his employment hereunder; provided, that Confidential Information shall in no event include (a) information which was generally available to the public at the time of disclosure by the Employee or (b) information which becomes publicly available other than as a consequence of the breach by the Employee of his confidentiality obligations hereunder.  In the event of the termination of his employment, whether voluntary or involuntary and whether by the Employer or the Employee, the Employee shall deliver to the Employer all documents and data pertaining to the Confidential Information and shall not take with him any documents or data of any kind or any reproductions (in whole or in part) or extracts of any items relating to the Confidential Information.  Nothing contained within this Section 8 shall prohibit Employee from disclosing Confidential Information if such disclosure is required pursuant to any final and non appealable order, judgment or decree of any governmental authority.  Nothing contained within this Section 8 shall prohibit Employee from disclosing Confidential Information if such disclosure is required by law, governmental process or valid legal process.  In the event that the Employee is legally compelled to disclose any of the Confidential Information, he shall provide the Employer with prompt written notice so that the Employer, at its sole cost and expense, may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement.  In the event that such protective order or other remedy is not obtained, or that the Employer waives compliance with the provisions of this Agreement, the Employee shall furnish only that portion of the Confidential Information that he is advised by counsel is legally required.  

Section 9.NON-COMPETITION.  During the term of the Employee’s employment hereunder and for the Designated Period (as defined below) after termination of the Employee’s employment hereunder, the Employee will not (a) anywhere within the Designated Territory (as defined below), engage, directly or indirectly, alone or as a shareholder (other than as a holder of capital stock of Holdings or its successors or assigns, or as a holder of less than two percent (2%) of the common stock of any publicly traded corporation), partner, officer, director, employee, consultant or advisor, or otherwise in any way participate in or become associated with, any other business organization that is engaged or becomes engaged in the business of installing, selling, servicing or monitoring residential or commercial security systems (the “Designated Industry”), (b) divert to any competitor of any Interface Company any customer of any Interface Company, or (c) solicit or encourage any officer, key employee or consultant of any Interface Company to leave its employ for alternative employment or hire or offer employment to, any person to whom any Company has offered employment.  For purposes hereof, the term “Designated Period” shall mean one year, the term “Designated Territory” shall mean any state in which Employer and its subsidiaries have in the aggregate at least 500 customers at the time of Employee’s termination and the term “Interface Company” shall mean any affiliate or subsidiary of Holdings.  The Employee acknowledges that the provisions of this Section 9 are essential 

- 5 -

to protect the business and goodwill of the Employer.  The Employee will continue to be bound by the provisions of this Section 9 until their expiration and shall not be entitled to any compensation from the Employer with respect thereto except as provided above.  If at any time the provisions of this Section 9 shall be determined to be invalid or unenforceable by reason of being vague or unreasonable as to area, duration or scope of activity, this Section 9 shall be considered divisible and shall become and be immediately amended to only such area, duration and scope of activity as shall be determined to be reasonable and enforceable by the court or other body having jurisdiction over the matter; and the Employee agrees that this Section 9 as so amended shall be valid and binding as though any invalid or unenforceable provision had not been included herein.  

Section 10.GENERAL.

(a)Notices.  All notices and other communications hereunder shall be in writing or by written telecommunication, and shall be deemed to have been duly given if delivered personally or if mailed by certified mail, return receipt requested, postage prepaid or sent by written telecommunication or telecopy, to the relevant address set forth below, or to such other address as the recipient of such notice or communication shall have specified to the other party hereto in accordance with this Section 10(a):

If to the Employer, to:
Interface Security Systems, L.L.C.
c/o SunTx Interface, L.P.
5420 LBJ Freeway, Suite 1000
Dallas, Texas  75240
Attention:  Craig J. Jennings
Fax:  (972) 663-8902

With a copy to:

Terry Schpok
Akin Gump Strauss Hauer & Feld, LLP
1700 Pacific Avenue, Suite 4100
Dallas, Texas  75201
Fax:  (212) 969-4343

- 6 -

If to the Employee, to:

Michael T. Shaw
16508 KingsPointe Lake Lane
Chesterfield, Missouri 63005

With a copy to:

S. Bryan Lawrence, III
Buchanan Ingersoll Professional Corporation
One Oxford Centre
301 Grant Street, 20th Floor
Pittsburgh, Pennsylvania 15219
Fax:  (412) 562-1041

(b)Equitable Remedies.  Each of the parties hereto acknowledges and agrees that upon any breach by the Employee of his obligations under Sections 7, 8 and 9 hereof, the Employer will have no adequate remedy at law, and accordingly will be entitled to specific performance and other appropriate injunctive and equitable relief.

(c)Severability.  If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired.

(d)Waivers.  No delay or omission by either party hereto in exercising any right, power or privilege hereunder shall impair such right, power or privilege, nor shall any single or partial exercise of any such right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privilege.

(e)No Mitigation.  In no event shall the Employee be obligated to seek other employment or to take any other action by way of mitigation of any amounts payable to the Employee under this Agreement, and, other than as set forth in Section 6(f)(ii), no such amounts shall be reduced if Employee does not seek or obtain other employment.

(f)Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(g)Arbitration, Other Disputes.  In the event of any dispute or controversy arising under or in connection with this Agreement, the parties shall first promptly try in good faith to settle such dispute or controversy by mediation under the applicable rules of the American Arbitration Association before resorting to arbitration.  In the event such dispute or controversy remains unresolved in whole or in part for a period of thirty (30) days after it arises, the parties will settle any remaining dispute or controversy exclusively by arbitration in Missouri in accordance with the rules of the American Arbitration Association then in effect.  Judgment may be entered on the arbitrator’s award in any court having jurisdiction.  Employer and Employee shall split all administrative fees and arbitration fees equally.  Notwithstanding the above, 

- 7 -

Employer shall be entitled to seek a restraining order or injunction in any competent jurisdiction to prevent any continuation of any violation of any of Sections 7, 8 or 9 hereof.  The substantially prevailing party may recover attorney’s fees in any dispute or controversy arising under or in connection with this Agreement.

(h)Assigns.  This Agreement shall be binding upon and inure to the benefit of the heirs and successors of each of the parties hereto, including any entity that acquires substantially all of the assets or stock of the Employer.

(i)Entire Agreement.  This Agreement contains the entire understanding of the parties, supersedes all prior agreements and understandings relating to the subject matter hereof, including, without limitation, any existing Employment Agreement between the parties hereto, and shall not be amended except by a written instrument hereafter signed by each of the parties hereto.

(j)Governing Law.  This Agreement and the performance hereof shall be construed and governed in accordance with the laws of the State of Missouri.

Signature Page Follows

- 8 -

IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto have caused this Agreement to be duly executed as of the day and the year first above written.

/s/ Michael T. Shaw                
Michael T. Shaw

INTERFACE SECURITY SYSTEMS, L.L.C.

By:   /s/ Michael T. Shaw            
Name: Michael T. Shaw            
Title:  Chief Executive Officer        

- 9 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00246-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00246-of-00352.parquet"}]]