Dear Friends

As you are aware Firstline filed for Chapter 11 Bankruptcy protection on January

25, 2008. In this letter, Firstline cannot adequately explain all of the complex and

technical details which led to its filing, but a condensed version is warranted.

Disputes arose during the 2007 selling season between ADT and Firstline about their

dealer agreement and whether ADT (which had the exclusive right to buy at least 75% of

Firstline’s accounts (through February 14th

2008) had authorized Firstline to sell

customer accounts which used cellular service through Alarm.com. Firstline believed that

consent had been given. ADT did not. ADT took the position that Firstline breached its

dealer agreement with ADT. This misunderstanding was critical in that ADT (which was

a good and reliable funding source) refused to purchase Firstline’s accounts—which

complicated Firstline’s ability to generate cash flow.

Making the sale of accounts to others more difficult, ADT asserted (under the

provisions of the dealer agreement) a security interest on virtually all of Firstline’s

accounts. Because of the asserted security interest, Firstline was unable to sell accounts

(and, therefore, generate cash flow) without ADT’s consent. ADT initially consented to

the sale of accounts, but refused to consent to sales (except on condition of payment of

amounts due to ADT) that had been arranged in late 2007 and early 2008. In addition,

ADT sued Firstline in early 2008 for millions of dollars for breach of the dealer

agreement.

To make matters worse, Firstline sold customer accounts to SAI (over 25,000) in the

beginning of the summer of 2007 (with ADT’s consent), but SAI was unable to

adequately provide service to the customers or to adequately track billing on the accounts

that were sold. As a result, millions of dollars in value were lost against holdbacks and

chargebacks because of paying accounts that were lost due to poor service.

Until late January 2008, it was hoped (and expected) that accounts could be sold

(with ADT’s consent) and that cash flow issues could be lessened if not fully resolved.

But by this time other large creditors including GE and Alarm.com became very

concerned about whether Firstline was going to pay them millions of dollars in debt

incurred to purchase the alarm system components that had been placed in homes during

the selling season.

The emergence of GE and Alarm.com further complicated Firstline’s ability to

sell accounts as these creditors, understandably, wanted to be the first paid out of the

proceeds from any sale of accounts.

GE filed a receivership complaint (which Alarm.com joined) in state court in

January 2008. Firstline believed that putting its business in the hands of a third-party

receiver would ultimately lessen the value of the accounts and be detrimental to creditors.

Negotiations among Firstline, ADT, GE, and Alarm.com to sell accounts to Monitronics

and avoid receivership took place until just hours before the receivership hearing was

scheduled (which was January 25, 2008 at 1:30 p.m.). Substantial concessions were made

by several of the creditor parties to allow cash to flow, but the negotiations did not

ultimately bear fruit. Firstline filed bankruptcy just a few minutes before the receivership

hearing was to take place.

Firstline is now focused on preserving and realizing the best value of all of its

assets (customer accounts, inventory, equipment etc.) for the benefit of creditors—

including many of you for unpaid commissions. Firstline is additionally considering

appropriate legal action, including against ADT and SAI to the extent claims may exist

against them that would generate funds to pay debt. Our plans for reorganizing the

company and continuing in the industry are still in the formative stages but will be

communicated to you from time to time.

I know that you have many questions. Below is an attempt to answer a few that

are recurring.

1. How do I get paid what I am owed? You should have received a notice of

bankruptcy and proof of claim form in the mail. You should fill out the form

and follow the instructions for mailing to the bankruptcy court. You must be

sure that it is filed by the deadline stated on the notice. You should note that

there are special provisions in the form for the assertion of wage or

commission claims earned within 180 days before Firstline’s bankruptcy

filing. If you have questions about the form and how to fill it out, you should

consult your own legal counsel. People who have filed claims or otherwise

have allowed claims in the bankruptcy will be paid according to the priorities

set forth in the bankruptcy code and according to the terms of a chapter 11

plan. It is difficult to say when the plan will be proposed and when payment

will be made. Firstline will put forth its best efforts to speed the process, but it

will likely be many months before payment (which will likely be less than

100% for non-priority unsecured claims) will be paid.

2. How do I determine what Firstline owes me? Firstline is attempting to

calculate the amount it believes is owed to its sales contractors and will be

posting its determinations on the company website as soon as practicable—

probably within 3 to 5 business days. You are not, of course, bound by what

Firstline says, and you may assert with the court whatever claim that you

believe can be legally supported. Similarly, Firstline further reserves the right

to change its calculations based upon updated or corrected information.

However, it is hoped that the amounts will assist you in determining your

claim and eliminate the need for litigation on either side.

3. Who do I contact regarding questions about my 1099 for 2007?

Jennifer Miller @ 801-478-2490 ext. 2740 if you have not received your 1099 or if your

1099 is incorrect. For faster response send Jennifer an email jmiller@4firsltine.com .

Some 1099 have been returned to our office due to incorrect address. If you have moved

please send your correct mailing address in the email to Jennifer and she can resend the

1099 to you. If you feel there has been an error on your 1099 please send a detailed

email so Jennifer can research your information and address your concerns. Please note

that we are working diligently to resolve your concerns; however, with the limited staff

there will be some delays in response time.

What if I owe money to Firstline? Some of you may owe money to Firstline for

advances or draws for 2008 or for other reasons. Unfortunately, the bankruptcy laws

require that Firstline collect these monies for distribution to all creditors equally for the

debt owed before the bankruptcy filing. If you owe money, you may be contacted by our

bankruptcy counsel demanding return of it. If you know that you owe money and wish to

resolve the issue immediately, you may send it by mail to: ____________________. If

you choose to send it voluntarily please keep a copy of what you send for your records so

that any misunderstandings about payment can be easily resolved.

Firstline is truly sorry for the burdens that its bankruptcy filing has laid at your doors.

We know that you have families to feed and that many of you were expecting substantial

backend payments this month. We hope that you take all of the good accomplished

during 2007 and use it to have success in the future. Do not let the decisions that a few

companies made to force Firstline into chapter 11 control your happiness. You control

your own destiny!! Take all the good that you learned over the last few years and use it to

help others and be the best at everything you do. Share your positive experiences about

Firstline on the Internet. Do not contribute to the hate. Please be honest with your

backends or any money that is owed by you back to Firstline. Most of the reps, techs, and

management have already been paid in full for the year in September or November of this

year. Please check the website to see if you have a backend amount coming through the

courts. We have been overwhelmed by the support and love that our management team,

reps, and techs have showed us. We have had so many supportive phone calls asking

what they can do to help or just calling to let us know that they are standing by us

through this, or just calling to say that they love Firstline and are sorry for the sudden turn

of events. There will be negative press on the events of the last month. There will be

frustrations shared and blame placed. Everyone reading this letter and especially those

that gave a few years to Firstline knows that despite what anyone says we were more than

just a summer sales alarm company. We were family and shared some great times

together. We will fight this thing to the end and work night and day to get the situation

under control. We love you all and will miss the fun times and great memories!! Please

check back in a few weeks for an update or email any other questions you may have.

Thanks for your support.