8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 8-K

Current Report Pursuant

to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report	August 23, 2004
(Date of earliest event reported)

Protection One, Inc.	Protection One Alarm Monitoring, Inc.
(Exact Name of Registrant as Specified in Charter)	(Exact Name of Registrant as Specified in Charter)
Delaware	Delaware
(State or Other Jurisdiction of Incorporation)	(State or Other Jurisdiction of Incorporation)
1-12181-01	1-12181
(Commission File Number)	(Commission File Number)
93-1063818	93-1065479
(I.R.S. Employer Identification No.)	(I.R.S. Employer Identification No.)
818 S. Kansas Avenue Topeka, Kansas 66612	818 S. Kansas Avenue Topeka, Kansas 66612
(Address of Principal Executive Offices, Including Zip Code)	(Address of Principal Executive Offices, Including Zip Code)
(785) 575-1707	(785) 575-1707
(Registrant’s Telephone Number, Including Area Code)	(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchage Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On August 23, 2004, Protection One, Inc. (the “Company”) reached an agreement to further extend the standstill agreements among the Company, Protection One Alarm Monitoring, Inc. (“POAMI”), Network Multi-Family Security Corporation, POI Acquisition, L.L.C., POI Acquisition I, Inc. and Quadrangle Master Funding Ltd.  The terms of the new extensions require the applicable Quadrangle Group LLC affiliate(s), under certain conditions, to continue to forbear until August 30, 2004 from (i) exercising any rights and taking any enforcement and collection actions as a result of the occurrence of specified defaults under the revolving credit facility and (ii) exercising any rights to which such affiliate is entitled as a result of its equity ownership in the Company.  Thereafter, the term of the standstill agreements shall be automatically extended for three consecutive one week periods unless the Quadrangle Group LLC affiliate(s) deliver a written notice to the Company.  The extension agreements are attached hereto as Exhibits 10.1 and 10.2, respectively.

Approximately 87% of the issued and outstanding shares of Protection One, Inc.’s common stock is owned by POI Acquisition I, Inc., a subsidiary of POI Acquisition, L.L.C.  POI Acquisition, L.L.C. and POI Acquisition I, Inc. are entities formed by Quadrangle Capital Partners L.P., Quadrangle Select Partners L.P., Quadrangle Capital Partners-A L.P. and Quadrangle Master Funding Ltd.  POI Acquisition, L.L.C and Quadrangle Master Funding Ltd. are the lenders under the Company’s revolving credit facility, under which approximately $215.5 million is outstanding.

Item 9.01.  Financial Statements and Exhibits.

(c) Exhibits:

Exhibit 10.1	Agreement to extend credit facility standstill, dated August 23, 2004, among Protection One, Inc., Protection One Alarm Monitoring, Inc., Network Multi-Family Security Corporation, POI Acquisition, L.L.C. and Quadrangle Master Funding Ltd.
Exhibit 10.2	Agreement to extend equity standstill, dated August 23, 2004, between Protection One, Inc. and POI Acquisition I, Inc.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PROTECTION ONE, INC.
Date: August 26, 2004	By:	/s/ Darius G. Nevin
	Name: Darius G. Nevin
	Title: Executive Vice President and Chief Financial Officer
	PROTECTION ONE ALARM MONITORING, INC.
Date: August 26, 2004	By:	/s/ Darius G. Nevin
	Name: Darius G. Nevin
	Title: Executive Vice President and Chief Financial Officer

3

EX-10.1

Exhibit 10.1

POI ACQUISITION, L.L.C.

QUADRANGLE MASTER FUNDING LTD

August 23, 2004

Protection One Alarm Monitoring, Inc.

Protection One, Inc.

Network Multi-Family Security Corporation

c/o Protection One, Inc.

818 South Kansas Avenue

Topeka, Kansas  66612

Ladies and Gentlemen:

1.             We refer to the:  (a) Credit Facility Standstill Agreement, dated as of February 17, 2004 (the “Agreement”), among Protection One Alarm Monitoring, Inc. (“POAM”), Protection One, Inc., (“POI”), Network Multi-Family Security Corporation (“Network”) and POI Acquisition, L.L.C. (“POI Acquisition”); (b) letter from Quadrangle Master Funding Ltd (“Quadrangle”) to POAM, dated February 27, 2004, (i) advising POAM of Quadrangle’s assumption from POI Acquisition of one-third of the obligations under the Credit Facility; and (ii) confirming Quadrangle’s agreement to be bound by the obligations of POI Acquisition set forth in the Agreement; (c) letter from POI Acquisition and Quadrangle to POAM, POI and Network, dated May 17, 2004, amending the term of the Agreement (except as otherwise provided therein); (d) letter from POI Acquisition and Quadrangle to POAM, POI and Network, dated May 24, 2004, further amending the term of the Agreement (except as otherwise provided therein); (e) letter from POI Acquisition and Quadrangle to POAM, POI and Network, dated May 28, 2004, further amending the term of the Agreement (except as otherwise provided therein); (f) letter from POI Acquisition and Quadrangle to POAM, POI and Network, dated June 28, 2004, further amending the terms of the Agreement (except as otherwise provided therein); and (g) letter from POI Acquisition and Quadrangle to POAM, POI and Network, dated July 26, 2004, further amending the terms of the Agreement (except as otherwise provided therein) (the “Fifth Letter Agreement”).  Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement.

2.             Pursuant to section 3 of the Agreement, the Agreement shall terminate and be of no further force and effect on the Debt Specified Date (which currently, under clause (i) of section 3 of the Agreement, as amended by the Fifth Letter Agreement, is 11:59 p.m. prevailing Eastern Time on August 23, 2004).  By this letter agreement and at your request, we hereby agree to further amend the definition of the Outside Date to mean 11:59 p.m. prevailing Eastern time on the date that is 196 days after the Effective Time (the period beginning with the

Effective Time and continuing through and including the Outside Date, the “Outside Standstill Period”).  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 any party hereto, unless POI Acquisition and Quadrangle deliver written notice of non-extension to POI pursuant to Paragraph 4 of this letter agreement on August 27, 2004, September 3, 2004 or September 10, 2004.  Under no circumstance shall the Outside Standstill Period exceed 217 days pursuant to the terms of this letter agreement.  This letter agreement shall not apply to section 5 of the 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:  (a) Item IV of Schedule 2 to the Agreement is hereby deleted in its entirety; (b) in the event that POI Acquisition and Quadrangle deliver 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; and (c) nothing herein shall constitute an amendment or waiver of the termination provisions of clause (ii) of section 3 of the Agreement.

4.             Any written notice to be given pursuant to this letter agreement by POI Acquisition and Quadrangle 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

5.             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, L.L.C.
By:	/s/ David A. Tanner
Name: David A. Tanner
Title:
QUADRANGLE MASTER FUNDING LTD
By:	/s/ Michael Weinstock
Name: Michael Weinstock
Title:

Agreed as of the date first written above:
PROTECTION ONE ALARM MONITORING, INC.
By:	/s/ Darius G. Nevin
Name: Darius G. Nevin
Title: Executive Vice President and Chief Financial Officer
PROTECTION ONE, INC.
By:	/s/ Darius G. Nevin
Name: Darius G. Nevin
Title: Executive Vice President and Chief Financial Officer
NETWORK MULTI-FAMILY SECURITY CORPORATION
By:	/s/ Steve Williams
Name: Steve Williams
Title: President

EX-10.2

Exhibit 10.2

POI ACQUISITION I, INC.

August 23, 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; and (f) letter from POI Acquisition to POI, dated July 26, 2004, further amending the term of the Agreement (the “Fifth 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 Fifth Letter Agreement, is 11:59 p.m. prevailing Eastern Time on August 23, 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 196 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 August 27, 2004, September 3, 2004 or September 10, 2004.  Under no circumstance shall the Outside Standstill Period exceed 217 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:
Title:

Agreed as of the date first written above:

PROTECTION ONE, INC.
By:	/s/ Darius G. Nevin
Name: Darius G. Nevin
Title: Executive Vice President and Chief Financial Officer