CONDITIONAL PURCHASE AGREEMENT
CONDITIONAL PURCHASE AGREEMENT, dated as of August 6, 1998
(this "Agreement"), between certain directors and or officers of Compagnie
Europeenne de Telesecurite, a French SOCIETE ANONYME (the "Company"), namely:
Henri de Pescara, Christophe de Pescara, Patrick Fornas, Benoit Aucouturier
(acting on behalf of C.A.F.F. SA), Michel Ginot, Francois de Pescara, and
John Metzger (acting on behalf of FERN SA) (the "Managers"), and Protection
One Alarm Monitoring, Inc., a Delaware corporation, purchasing on behalf of a
wholly-owned (directly or indirectly) French entity, either formed or in the
process of being formed on the date hereof (the "Buyer"),
WHEREAS, the Buyer has approached the Managers to discuss a
possible transaction involving the Company,
WHEREAS, the Buyer has, in the course of such discussions,
expressed the wish to acquire control of the Company through the acquisition
of a block of shares of its common stock, but also the desire to have an
option to purchase the shares of the Company held by the Managers if it was
unable to acquire control of the Company in a block sale,
WHEREAS, the Managers consider that the acquisition of a
controlling interest in the Company by the Buyer would be in the best
interest of the Company and would enable it to expand its activities both
domestically and internationally more quickly and more efficiently,
WHEREAS, the Buyer desires to purchase all of the
outstanding shares of the common stock of the Company held directly or
indirectly by the Managers (the "Manager Shares"), and the Managers signing
this Agreement desire to sell all of the Manager Shares, on the terms and
conditions set forth herein,
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NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF MANAGER SHARES
1.1 QUALIFICATION AND TITLE TO SHARES. Each of the Managers
warrants to the Buyer as follows:
(a) The Manager Shares represent more than 15% of the
outstanding shares of common stock of the Company.
(b) Each Manager holds his shares in an account at Banque
Vernes, and has given or will give irrevocable instructions to Banque Vernes
to transfer the Manager Shares to the Buyer upon the satisfaction of the
condition provided for in Section 1.2 below, or upon exercise of the option
as provided in Section 1.3 below.
(c) Each Manager has the power and the authority to enter
into this Agreement. No impediment to the Manager's power or right to sell
his Manager Shares exists, whether under the by-laws of the Company, the laws
of France, the laws of any other jurisdiction, or any private contract. The
number of Manager Shares which he offers to the Buyer pursuant to this
Agreement is the total number of all the Manager Shares owned, held, or
controlled by that Manager. Each Manager has no option to purchase, and shall
acquire no option to purchase, additional shares in the Company. Each Manager
shall refrain from purchasing any additional shares in the Company between
the date of this Agreement and the date of the Closing as defined in Section
1.5 below. Each Manager owns his Manager Shares free and clear of any liens
or encumbrances, and can transfer good title in the Manager Shares to the
Buyer.
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1.2 CONDITIONAL AGREEMENT TO PURCHASE.
(a) Upon the terms and subject to the conditions of this
Agreement and in reliance upon the representations, warranties and agreements
set forth herein, the Managers hereby agree to sell to the Buyer and the
Buyer agrees to purchase from the Managers the Manager Shares at the Purchase
Price as defined in Section 1.4 below.
(b) The foregoing obligations shall be conditional upon the
Buyer having purchased, prior to 8:00 p.m., Paris time, on August 10, 1998,
in one or several transactions consummated simultaneously, a block of the
Company's shares other than the Manager Shares representing not less than 35%
of the outstanding shares of the common stock of the Company at a price equal
to the Purchase Price (the "Block Trade").
(c) The Buyer agrees that it shall use its best efforts to
consummate the Block Trade by giving appropriate instructions to the broker
of its choice in sufficient time to complete the transaction or transactions
referred to in Section 1.2(b) above.
1.3 FAILURE OF CONDITIONAL PURCHASE. If by 8:00 P.M., Paris
time, on August 10, 1998 the Buyer has not been able to consummate the Block
Trade despite its best efforts as described in Section 1.2(c) above, then,
and until September 10, 1998, the Buyer shall have the exclusive option to
purchase the Manager Shares at the Purchase Price subject to the
compatibility of such price with French Stock Exchange regulations at the
time of the exercise of such option, such option to be exercised by notice as
provided for in Section 3.4 below.
1.4 PURCHASE PRICE. The Buyer shall purchase the Manager
Shares for 450 FF per share(the "Purchase Price").
1.5 TRANSFER AND SETTLEMENT PROCEDURES. The settlement
mechanism described in this Section shall be referred to as the "Closing".
The Closing shall take place immediately or as soon as practically possible
after the
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settlement of the Block Trade. In the event that the Buyer exercises its
option under Section 1.3 of this Agreement, the Closing shall take place
three business days after such exercise. At the Closing, the Managers shall
deliver to the Buyer acceptable evidence of transfer of title in the Manager
Shares to the Buyer and the Buyer shall deliver to the Managers the Purchase
Price.
1.6 REPRESENTATIONS AND WARRANTIES OF THE PARTIES.
Each Party hereto represents and warranties to the other that it shall comply
in all respects with French Stock Exchange regulations in connection with the
performance of this Agreement.
Furthermore, the Buyer represents that it shall commence a tender offer for
the remainder of the outstanding stock of the Company, following the
completion of the Block Trade, as provided for by French Stock Exchange
regulations.
ARTICLE II
RESIGNATIONS; NON-COMPETITION
2.1 At the Buyer's request, upon the purchase of the
Manager Shares, the Managers will use their best efforts to deliver to the
Buyer the resignations of such directors of the Company as may be determined
by the Buyer.
2.2 In the event that a Manager were to cease to be a
director or officer of the Company for any reason whatsoever, then such
Manager shall refrain from performing any professional activity in France
whether as a director, officer, employee, consultant or otherwise, directly
or indirectly, with or without compensation, for a corporation or other
business organization competing directly with the Company for a period of
twelve months from the effective date of termination of such Manager's
professional relationship with the Company, and shall refrain from soliciting
any of the company's customers existing at the time of such termination for a
period of twenty-four months from that same date.
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ARTICLE III
MISCELLANEOUS
3.1 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
3.2 EXPENSES. Except as otherwise expressly provided in
this Agreement, whether or not the transactions contemplated in this
Agreement are consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be borne by the
party incurring such costs and expenses.
3.3 FINDER'S FEES. Each party represents and warrants to
the other that no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission from the Company or any of its
Subsidiaries in connection with the transactions contemplated by this
Agreement.
3.4 NOTICES. Notice to all of the Managers shall be deemed
to have been given by sending a fax to Henri de Pescara at the following
number: 33.01.43.18.28.89, followed by written confirmation. Such notice
shall be deemed effective as of the date and time at which the fax
transmission is sent.
3.5 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the Republic of France without
regard to the principles of conflicts of laws.
3.6 CONSENT TO JURISDICTION. Any legal action or proceeding
with respect to this Agreement or any matters arising out of or in connection
with this Agreement, and any action for enforcement of any judgment in
respect thereof, shall be brought exclusively in the courts of the Republic
of France. Moreover, the Buyer and the Managers hereby agree to submit to the
jurisdiction of Paris courts.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed hereunder as of the date first above written.
NUMBER OF
NAME OF SHAREHOLDER SHARES SOLD SIGNATURE
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Henri de Pescara 38,174 /s/ Henri de Pescara
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Christophe de Pescara 53,029 /s/ Christophe de Pescara
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Patrick Fornas 44,938 /s/ Patrick Fornas
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CAFF by Benoit Aucouturier 58,891 /s/ CAFF by Benoit Aucouturier
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Michel Ginot 48,282 /s/ Michel Ginot
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FERN by John Metzger 50,716 /s/ FERN by John Metzger
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Francois de Pescara 27,200 /s/ Francois de Pescara
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/s/ John E. Mack III
Protection One Alarm Monitoring, Inc.
(on behalf of a wholly-owned (direct or indirect)French entity, either formed
or in the process of being formed on the date hereof)
By: John E. Mack III
Executive Vice President
New Business Developments
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