Exhibit 10.1

 

EXECUTION VERSION

 

 

 

PUT OPTION AGREEMENT

 

AMONG

 

MONITRONICS INTERNATIONAL, INC.,

 

ASCENT CAPITAL GROUP, INC.,

 

CERTAIN AFFILIATES OF MONITRONICS INTERNATIONAL, INC.,

 

AND

 

THE COMMITMENT PARTIES HERETO

 

Dated as of May 28, 2019

 

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

1.

Rights Offering and Commitments

3

 

1.1

The Rights Offering; Purchase Notices

3

 

1.2

Primary Commitments

4

 

1.3

Backstop Commitments

6

 

1.4

Equity Commitment

9

 

1.5

Closing

9

 

1.6

Put Option Premium

10

 

1.7

Transaction Expenses

11

2.

Representations and Warranties of the Company Parties

11

 

2.1

Organization of the Company Parties

11

 

2.2

Authority; No Conflict

12

 

2.3

Proceedings

13

 

2.4

Brokers or Finders

13

 

2.5

Exemption from Registration

13

 

2.6

Issuance

13

 

2.7

No Violation or Default

14

 

2.8

Intellectual Property

14

 

2.9

Licenses and Permits

14

 

2.10

Compliance With ERISA

14

 

2.11

No Unlawful Payments

16

 

2.12

Absence of Certain Changes or Events

16

 

2.13

Title to Real and Personal Property

16

 

2.14

Financial Statements

17

 

2.15

Tax Matters

17

 

2.16

Labor and Employment Compliance

18

 

2.17

Product Liability

19

 

2.18

Company SEC Documents

19

 

2.19

Internal Control Over Financial Reporting

20

 

2.20

Disclosure Controls and Procedures

20

 

2.21

Compliance with Money Laundering Laws

20

 

2.22

Compliance with Sanctions Laws

20

 

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2.23

Investment Company Act

21

 

2.24

Arm’s Length

21

3.

Representations and Warranties of the Commitment Parties

21

 

3.1

Organization of Such Commitment Party

21

 

3.2

Authority; No Conflict

21

 

3.3

Backstop Shares and Equity Commitment Shares Not Registered

22

 

3.4

Acquisition for Own Account

23

 

3.5

Accredited Investor or Qualified Institutional Buyer

23

 

3.6

Access to Information

23

 

3.7

Brokers or Finders

23

 

3.8

Proceedings

23

 

3.9

Sufficiency of Funds, Contributed Term Loans

23

 

3.10

Arm’s Length

23

4.

Covenants of the Company Parties

24

 

4.1

Agreement Motion and Agreement Order

24

 

4.2

Rights Offering

25

 

4.3

Conditions Precedent

25

 

4.4

Notification

25

 

4.5

Use of Proceeds

25

 

4.6

Access

25

 

4.7

DIP Facility

26

 

4.8

Exit Facilities

26

 

4.9

Specified Issuances

26

 

4.10

Blue Sky; Form D

27

 

4.11

Share Legend

27

 

4.12

Registration Rights Agreement

28

 

4.13

Reorganized Company

28

5.

Covenants of the Commitment Parties

28

6.

Conditions to Closing

29

 

6.1

Conditions Precedent to Obligations of the Commitment Parties

29

 

6.2

Conditions Precedent to Obligations of Monitronics

32

7.

Termination

33

8.

Indemnification

35

9.

Survival of Representations and Warranties

36

 

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10.

Amendments and Waivers

36

11.

Notices, etc.

37

12.

Miscellaneous

39

 

12.1

Assignments

39

 

12.2

Severability

40

 

12.3

Entire Agreement

40

 

12.4

Counterparts

40

 

12.5

Governing Law

40

 

12.6

Submission to Jurisdiction

40

 

12.7

Waiver of Trial by Jury; Waiver of Certain Damages

41

 

12.8

Further Assurances

41

 

12.9

Specific Performance

41

 

12.10

Headings

41

 

12.11

Interpretation; Rules of Construction

41

 

12.12

Several, Not Joint, Obligations

42

 

12.13

Confidentiality and Publicity

42

 

12.14

No Recourse Party

43

 

12.15

Settlement Discussions

43

 

12.16

No Third Party Beneficiaries

43

 

12.17

Relationship Among Parties

43

13.

Definitions

44

 

13.1

Certain Defined Terms

44

 

Schedules

 

1.1

Backstop Commitment Schedule

1.2

Equity Commitment Schedule

2.2(c)

Consents

2.10(a)

Benefit Plans

2.10(c)

Payments

2.16(e)

WARN Notices

 

Exhibits

 

A

Restructuring Support Agreement

B

Outline of Rights Offering Procedures

C

Form of Required Rights Joinder

 

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This PUT OPTION AGREEMENT (as amended, amended and restated, supplemented or
otherwise modified from time to time, together with all exhibits and schedules
hereto, this “Agreement”) is entered into as of May 28, 2019 (the “Execution
Date”), by and among (a) Monitronics International, Inc., a Texas corporation
(as in existence on the date hereof, as a debtor-in-possession in the Chapter 11
Cases (as defined below), and as Reorganized Monitronics, as applicable,
“Monitronics”), (b) Ascent Capital Group, Inc., a Delaware corporation
(“Ascent”), (c) each of the Affiliates (as defined below) of Monitronics listed
on the signature pages hereto under the title “Other Debtors” (such Affiliates,
each as in existence on the date hereof, as a debtor-in-possession in the
Chapter 11 Cases and as a reorganized debtor, as applicable, together with
Monitronics, each a “Debtor” and, collectively, the “Debtors”), (d) each of the
undersigned entities and/or their investment advisors, managers, managed funds
or accounts, intermediaries or nominees set forth on Schedule 1.1 hereto (each,
a “Backstop Commitment Party” and, collectively, the “Backstop Commitment
Parties”), and (e) each of the undersigned entities and/or their investment
advisors, managers, managed funds or accounts, intermediaries or nominees set
forth on Schedule 1.2 hereto (each, an “Equity Commitment Party” and,
collectively, the “Equity Commitment Parties” and, together with the Backstop
Commitment Parties, each, a “Commitment Party” and, collectively, the
“Commitment Parties”).  Each of the Company Parties and each Commitment Party is
referred to herein, individually, as a “Party” and, collectively, as the
“Parties”.  Except as otherwise expressly provided herein, capitalized terms
that are used but not otherwise defined in this Agreement shall have the
meanings given to them in Section 13.1 hereof.

 

RECITALS

 

WHEREAS, the Debtors, the Commitment Parties, the Consenting Creditors, and
Ascent have entered into that certain Restructuring Support Agreement, dated as
of May 20, 2019 (as amended, amended and restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof, together with
the Term Sheets and all other exhibits and schedules thereto, the “Restructuring
Support Agreement”), a copy of which (as in effect on the date hereof) is
attached as Exhibit A hereto and which, among other things, (a) provides for a
Restructuring of the Debtors pursuant to a partial prepackaged Plan to be filed
in jointly administered voluntary cases (the “Chapter 11 Cases”) under chapter
11 of title 11 of the United States Code, 11 U.S.C. §§ 101—1532 (as amended, the
“Bankruptcy Code”) in the United States Bankruptcy Court for the Southern
District of Texas, Houston Division (the “Bankruptcy Court”), implementing the
terms and conditions of the Restructuring Term Sheet attached as Exhibit A to
the Restructuring Support Agreement (the “Restructuring Term Sheet”), the Rights
Offering and Equity Commitment Term Sheet attached as Exhibit B to the
Restructuring Support Agreement (the “Rights Offering Term Sheet”), the DIP/Exit
Facility Commitment attached as Exhibit C to the Restructuring Support Agreement
(the “DIP/Exit Facility Commitment”), the Takeback Exit Term Loan Facility Term
Sheet attached as Exhibit D to the Restructuring Support Agreement (the
“Takeback Term Loan Term Sheet”), and the Governance Term Sheet attached as
Exhibit 1 to the Restructuring Term Sheet (the “Governance Term Sheet”), and
(b) requires that the parties thereto support the Restructuring in accordance
with and subject to the terms thereof;

 

WHEREAS, in connection with the Restructuring, (a) solely in the event that the
Non-Ascent Restructuring Toggle has not occurred, on the Plan Effective Date (as
defined in the

 

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Restructuring Support Agreement), (i) Ascent shall merge with and into
Monitronics, with Reorganized Monitronics as the surviving entity and, as a
result of the Merger, all assets of Ascent (including the Ascent Cash Amount)
shall become assets of Reorganized Monitronics, (ii) the holders of Ascent’s
common stock shall receive, pursuant to the Merger, New Common Stock in the
amount of the Ascent Share Distribution on the terms and conditions set forth in
the Restructuring Term Sheet and (iii) if the Net Cash Amount is less than $23
million (but not less than $20 million), the Backstop Commitment Shares shall
include the Net Cash Shortfall Shares (as defined below) for an aggregate
purchase price equal to the Net Cash Shortfall Amount, or (b) solely in the
event that the Non-Ascent Restructuring Toggle has occurred, on the Plan
Effective Date, (i) the Restructuring shall be consummated without Ascent’s
participation and without consummation of the Merger, (ii) the holders of
Ascent’s common stock shall not receive the Ascent Share Distribution, and
(iii) the Backstop Commitment Shares shall include the Ascent Default Shares for
an aggregate purchase price equal to $23 million;

 

WHEREAS, pursuant to (and subject to the terms and conditions set forth in) the
Plan and this Agreement, and in accordance with the Rights Offering Procedures
(as defined below), Monitronics will conduct a rights offering (the “Rights
Offering”) in which Monitronics will issue to the holders of the Notes (on a pro
rata basis based on each holder’s percentage holdings of the total outstanding
Notes), at no charge, rights (the “Rights”) entitling Cash Opt Out Noteholders
to subscribe for and purchase (on a pro rata basis based on each Cash Opt Out
Noteholder’s percentage holdings of the total outstanding Rights), in the
aggregate, 44.80% of the total shares of New Common Stock to be issued as of the
Plan Effective Date, subject to dilution by the Post-Emergence Incentive Plan
(the “Rights Offering Shares”), for an aggregate purchase price equal to
$177 million (the “Aggregate Rights Offering Amount”) and at a per-share
purchase price equal to the Exercise Price;

 

WHEREAS, in order to facilitate the Rights Offering and the Restructuring,
pursuant to this Agreement, and subject to the terms, conditions and limitations
set forth herein, (a) each of the Backstop Commitment Parties, severally and not
jointly, has agreed (i) to fully honor such Backstop Commitment Party’s
commitments with respect to the Put Option and (ii) upon exercise of the Put
Option by Monitronics, to purchase on the Plan Effective Date, at the Exercise
Price, such Backstop Commitment Party’s Backstop Commitment Percentage of the
Backstop Commitment Shares, if any;

 

WHEREAS, in order to facilitate the Restructuring, pursuant to this Agreement,
and subject to the terms, conditions and limitations set forth herein, each of
the Equity Commitment Parties, severally and not jointly, has agreed to, on the
Plan Effective Date, exchange an aggregate principal amount of Contributed Term
Loans (as defined below) equal to such Equity Commitment Party’s Equity
Commitment Percentage of the Equity Commitment Amount into such Equity
Commitment Party’s Equity Commitment Percentage of the Equity Commitment Shares
at the aggregate Exercise Price therefor.

 

NOW, THEREFORE, in consideration of the foregoing, and the representations,
warranties and covenants set forth herein, and other good and valuable
consideration, the Company Parties and the Commitment Parties agree as follows:

 

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1.                                      Rights Offering and Commitments.

 

1.1                               The Rights Offering; Purchase Notices.

 

(a)                                 On the terms and subject to the conditions
set forth in this Agreement and the Rights Offering Procedures, Monitronics will
commence the Rights Offering promptly (and in any event, within five
(5) Business Days) following the Petition Date as part of the postpetition
solicitation process for the Plan.  The Rights Offering shall be conducted by
Monitronics and consummated on the terms and subject to the conditions set forth
in, and in accordance with, the procedures to be filed with the Bankruptcy
Court, which procedures (the “Rights Offering Procedures”) shall include the
terms, conditions and provisions set forth in Exhibit B hereto, and shall
otherwise be in form and substance acceptable to the Requisite Commitment
Parties and consistent with the terms, conditions and provisions set forth in
this Agreement and the Restructuring Support Agreement.  The total number of
Rights Offering Shares to be offered for sale pursuant to the Rights Offering,
and the total number of shares of New Common Stock to be issued as of the Plan
Effective Date shall be mutually agreed by Monitronics and the Requisite
Commitment Parties prior to commencement of the Rights Offering, provided that
the aggregate Exercise Price for all Rights Offering Shares shall not be less
than $177,000,000.

 

(b)                                 In the event the Merger Approvals are
obtained, or the Ascent Stockholder Meeting is scheduled within the eight
(8) Business Days prior to the anticipated Plan Effective Date, and the Company
Parties, in their commercially reasonable judgment, determine that the Merger
Approvals will be received, and the Non-Ascent Restructuring Toggle shall not
have occurred, Ascent shall deliver (or cause to be delivered) to Monitronics,
the Subscription Agent and each of the Backstop Commitment Parties, no later
than the date that is eight (8) Business Days prior to the anticipated Plan
Effective Date, a certificate, duly executed by the chief financial officer of
Ascent and in form and substance reasonably acceptable to the Requisite
Commitment Parties, that sets forth the actual Net Cash Amount as of such date
(the “Net Cash Certificate”) and includes a covenant from Ascent whereby it
agrees to use reasonable best efforts to ensure that the actual Net Cash Amount
upon consummation of the Merger shall not be less than the Net Cash Amount set
forth in such certificate.

 

(c)                                  Monitronics hereby agrees and undertakes to
deliver (or cause the Subscription Agent to deliver) a Backstop Purchase Notice
(as defined below) to each of the Backstop Commitment Parties, as promptly as
practicable after the Rights Offering Expiration Time and the first to occur of
the following (and in no event later than the date that is seven (7) Business
Days prior to the Anticipated Plan Effective Date): (i) the occurrence of the
Non-Ascent Restructuring Toggle; (ii) if the Merger Approvals have been
obtained, Ascent’s delivery of the Net Cash Certificate to Monitronics or
(iii) if the Merger Approvals have not been obtained and the Ascent Stockholder
Meeting is scheduled within seven (7) Business Days prior to the anticipated
Plan Effective Date, Ascent’s delivery of the Net Cash Certificate to
Monitronics and the Company Parties’ determination, in their commercially
reasonable judgment, that the Merger Approvals will be received.  As used
herein, “Backstop Purchase Notice” means, with respect to any Backstop
Commitment Party, a written notice that sets forth (i) the aggregate number of
Rights Offering Shares that Rights Offering Participants validly elect to
purchase in the Rights Offering and the aggregate Exercise Price therefor,
(ii) if applicable,

 

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the aggregate number of Unsubscribed Shares and the aggregate Exercise Price
therefore, (iii) if applicable, the aggregate number of Ascent Default Shares
and the aggregate Exercise Price therefor, (iv) if applicable, the aggregate
number of Net Cash Shortfall Shares and the aggregate Exercise Price therefor,
(v) if applicable, the aggregate number of Backstop Commitment Shares to be
issued and sold by Monitronics to such Backstop Commitment Party (based on its
respective Backstop Commitment Percentage) and the aggregate Exercise Price
therefor (as calculated based on clauses (i) through (v), in the aggregate, such
Backstop Commitment Party’s “Backstop Commitment Share Purchase Price”) and
(vi) if applicable, wire instructions for the Backstop Escrow Account to which
such Backstop Commitment Party shall deliver and pay its respective Backstop
Commitment Share Purchase Price obligation.  The Company shall direct the
Subscription Agent to promptly provide any written backup, information and
documentation relating to the information contained in the applicable Backstop
Purchase Notice as any Backstop Commitment Party may reasonably request.

 

(d)                                 Monitronics hereby agrees and undertakes to
deliver (or cause the Subscription Agent to deliver) to each of the Equity
Commitment Parties, simultaneously with its delivery of the Backstop Purchase
Notice to the Backstop Commitment Parties, a written notice (an “Equity
Commitment Purchase Notice”) that (i) sets forth the aggregate number of Equity
Commitment Shares to be issued and sold by Monitronics to such Equity Commitment
Party (based on its respective Equity Commitment Percentage) and the aggregate
Exercise Price therefor (such Equity Commitment Party’s “Equity Commitment Share
Purchase Price”), (ii) includes the form of the instrument of assignment and/or
other documentation, in form and substance reasonably acceptable to Monitronics
and the Equity Commitment Parties, to be used by each Equity Commitment Party to
deliver Contributed Term Loans to Monitronics in satisfaction of its respective
Equity Commitment Share Purchase Price obligation (the “Contributed Term Loan
Exchange Documentation”), and (iii) instructions for such Equity Commitment
Party’s delivery into escrow (with the Subscription Agent or otherwise) of the
Contributed Term Loan Documentation.

 

1.2                               Primary Commitments.

 

(a)                                 On the terms, subject to the conditions, and
in reliance on the representations and warranties set forth in this Agreement
(including the entry of the Agreement Order by the Bankruptcy Court and its
becoming a Final Order), each of the Backstop Commitment Parties hereby agrees,
severally and not jointly, to (i) exercise (or cause to be exercised) in full
all of the Rights issued in the Rights Offering in respect of all Notes held by
such Backstop Commitment Party as of the close of business on the date of this
Agreement (the “Required Rights”), in accordance with the terms and conditions
of the Rights Offering Procedures; (ii) purchase (or cause to be purchased) all
of the Rights Offering Shares issuable pursuant to the exercise of such Required
Rights, in accordance with the terms and conditions of the Rights Offering
Procedures; and (iii) if applicable, comply fully with Section 1.2(b) with
respect to any Transfer of Required Rights by or to such Commitment Party.  The
obligations of the Backstop Commitment Parties under this Section 1.2 are
several, not joint, obligations of the Backstop Commitment Parties, such that no
Backstop Commitment Party shall be liable or otherwise responsible for the
Primary Commitment of any other Backstop Commitment Party.

 

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(b)                                 In the event that a Backstop Commitment
Party or Required Rights Transferee (as defined below), in accordance with the
terms and conditions set forth in the Rights Offering Procedures, proposes or
purports to Transfer any Required Rights (including any Transfer of Notes to
which Required Rights are attached) to any Person who is not a Backstop
Commitment Party (a “Required Rights Transferee”), the Backstop Commitment Party
or Required Rights Transferee, as applicable, shall not consummate such Transfer
unless the Required Rights Transferee delivers to Monitronics and the Commitment
Party Professionals a duly executed joinder, in substantially the form attached
as Exhibit C hereto, or otherwise mutually acceptable to Monitronics and the
Requisite Commitment Parties (a “Required Rights Joinder”), pursuant to which
such transferee agrees to (i) exercise (or cause to be exercised) in full all
such Required Rights, in accordance with the terms and conditions of the Rights
Offering Procedures, (ii) purchase (or cause to be purchased) all of the Rights
Offering Shares issuable pursuant to the exercise of such Required Rights in
accordance with the terms and conditions of the Rights Offering Procedures and
(iii) fully comply with this Section 1.2(b) with respect to any subsequent
Transfer of any such Required Rights. Notwithstanding the foregoing, any
Backstop Commitment Party or Required Rights Transferee may Transfer any of its
Required Rights to an entity that is acting in its capacity as a Qualified
Market-Maker (including to a Backstop Commitment Party acting in its capacity as
a Qualified Market-Maker) without the requirement that the Qualified
Market-Maker deliver a duly executed Required Rights Joinder; provided, however,
that the Qualified Market-Maker subsequently Transfers all right, title and
interest in such Required Rights to a transferee that deliver a duly executed
Required Rights Joinder as provided above, and the Transfer documentation
between the transferor Backstop Commitment Party or Required Rights Transferee,
as applicable, and such Qualified Market-Maker shall contain a requirement that
provides as such.  As used herein, “Qualified Market-Maker” means an entity that
(i) holds itself out to the market as standing ready in the ordinary course of
business to purchase from and sell to customers Notes or Company Claims (as
defined in the Restructuring Support Agreement), or enter with customers into
long and/or short positions in Notes or Company Claims, in its capacity as a
dealer or market maker in such Notes or Company Claims; and (ii) is in fact
regularly in the business of making a market in claims, interests and/or
securities of issuers or borrowers.  Notwithstanding the foregoing, any Backstop
Commitment Party or Required Rights Transferee who Transfers its Required Rights
to a Qualified Market-Maker pursuant to this Section 1.2(b) hereby agrees that
if such Qualified Market-Maker fails to exercise and to pay the Exercise Price
for such Transferred Required Rights or a portion thereof, that such Backstop
Commitment Party or Required Rights Transferee who Transferred the Required
Rights shall be deemed to have exercised the Required Rights or the unexercised
portion thereof and shall be obligated to fund the Exercise Price for such
Required Rights or the unfunded portion thereof.

 

(c)                                  Each Backstop Commitment Party shall have
until the Deposit Deadline to fund, into the Backstop Escrow Account, the
aggregate Exercise Price for all Rights Offering Shares that such Backstop
Commitment Party subscribes for in the Rights Offering, and such funding shall
be deemed timely notwithstanding any earlier funding deadline as the Rights
Offering Procedures may require with respect to other Rights Offering
Participants.  Any Backstop Commitment Party that is also a First Lien Term
Lender may, instead of delivering cash to pay the full amount of the aggregate
Exercise Price for the Rights Offering Shares that it elects to purchase
pursuant to the exercise of its Rights, pay such aggregate Exercise Price by
(i) (A) tendering to Monitronics an aggregate principal amount of its Term Loans
(excluding any

 

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Contributed Term Loans), in an amount not to exceed its ratable portion of the
Effective Date Pay Down, on a dollar-for-dollar basis, in lieu of submitting
cash to pay the Exercise Price for such Rights Offering Shares and (B) waiving
its ratable portion of the Effective Date Pay Down, and (ii) paying cash for the
remainder of the aggregate Exercise Price, if any, for such Rights Offering
Shares.

 

1.3                               Backstop Commitments.

 

(a)                                 On the terms, subject to the conditions, and
in reliance on the representations and warranties set forth in this Agreement
(including the entry of the Agreement Order by the Bankruptcy Court and its
becoming a Final Order), each of the Backstop Commitment Parties hereby agrees,
severally and not jointly, upon exercise of the Put Option to purchase on the
Plan Effective Date, at the aggregate Exercise Price therefor, its Backstop
Commitment Percentage of (i) all Unsubscribed Shares, (ii) solely in the event
that the Non-Ascent Restructuring Toggle occurs, a number of shares equal to the
quotient (rounded to the nearest whole share) of $23,000,000 divided by the
Exercise Price (the “Ascent Default Shares”) for an aggregate purchase price
equal to $23 million and (iii) solely in the event that the Non-Ascent
Restructuring Toggle shall not have occurred and the Net Cash Amount is less
than $23,000,000 (but not less than $20,000,000), a number of shares equal to
the quotient (rounded to the nearest whole share) of (x) $23,000,000 less the
Net Cash Amount, divided by (y) the Exercise Price (the “Net Cash Shortfall
Shares”) for an aggregate purchase price equal to the Net Cash Shortfall
Amount.  The Backstop Commitments are several, not joint, obligations of the
Backstop Commitment Parties, such that no Backstop Commitment Party shall be
liable or otherwise responsible for the Backstop Commitment of any other
Backstop Commitment Party.  The Unsubscribed Shares, Ascent Default Shares and
Net Cash Shortfall Shares, as applicable, that each of the Backstop Commitment
Parties is required to purchase pursuant to this Section 1.3(a) are collectively
referred to herein as such Backstop Commitment Party’s “Backstop Commitment
Shares”.

 

(b)                                 At least two (2) Business Days prior to the
Plan Effective Date (the “Deposit Deadline”), each Backstop Commitment Party
shall, severally and not jointly, deposit into the Backstop Escrow Account (as
defined below), by wire transfer of immediately available funds pursuant to wire
instructions set forth in the Backstop Purchase Notice, an amount equal to such
Backstop Commitment Party’s Backstop Commitment Share Purchase Price. As used
herein, “Backstop Escrow Account” means an escrow account established with a
bank or trust company approved by Monitronics and each of the Backstop
Commitment Parties (the “Backstop Escrow Agent”), pursuant to an escrow
agreement to be entered into between Monitronics, the Backstop Commitment
Parties and the Backstop Escrow Agent, in form and substance reasonably
satisfactory to the Requisite Commitment Parties and Monitronics (the “Backstop
Escrow Agreement”); provided, however, that in lieu of such an escrow account
with a bank or trust company, Monitronics and the Requisite Commitment Parties
may mutually agree to use a segregated bank account established by the
Subscription Agent, in which event such segregated account shall constitute the
“Backstop Escrow Account” and the Subscription Agent shall constitute the
“Backstop Escrow Agent” for all purposes of this Agreement.

 

(c)                                  In the event that a Backstop Commitment
Party defaults (a “Backstop Default”) on its obligation to deposit its Backstop
Commitment Share Purchase Price into the

 

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Backstop Escrow Account by the Deposit Deadline pursuant to
Section 1.3(b) hereof or materially breaches any other covenant made by such
Backstop Commitment Party in this Agreement, or any representation or warranty
made by a Backstop Commitment Party in this Agreement is materially incorrect
when made or deemed to be made (each such Backstop Commitment Party, a
“Defaulting Backstop Commitment Party”), then each Backstop Commitment Party
that is not a Defaulting Backstop Commitment Party (each, a “Non-Defaulting
Backstop Commitment Party”) shall have the right (the “Default Purchase Right”),
but not the obligation, to commit to purchase, at the aggregate Exercise Price
therefor, up to its Adjusted Commitment Percentage of all Backstop Commitment
Shares required to be purchased by the Defaulting Backstop Commitment Party
pursuant to Section 1.3(a) but with respect to which such Defaulting Backstop
Commitment Party did not make the required deposit in accordance with
Section 1.3(b).  As soon as practicable after a Backstop Default, but in any
event, within one (1) Business Day after the Deposit Deadline, Monitronics shall
send a written notice to each Non-Defaulting Backstop Commitment Party,
specifying (i) the number of Backstop Commitment Shares subject to any Backstop
Default (the “Default Shares”) and (ii) the maximum number of Default Shares
such Non-Defaulting Backstop Commitment Party is entitled to purchase
(determined in accordance with the first sentence of this Section 1.3(c)).  Each
Non-Defaulting Backstop Commitment Party will have one (1) Business Day after
receipt of such notice to elect to exercise its Default Purchase Right by
notifying Monitronics in writing of its election and specifying the maximum
number of Default Shares that it is electing to purchase (up to the maximum
number of Default Shares such Non-Defaulting Backstop Commitment Party is
entitled to purchase pursuant to the first sentence of this Section 1.3(c)).  If
any Non-Defaulting Backstop Commitment Party elects to purchase less than the
maximum number of Default Shares such Non-Defaulting Backstop Commitment Party
is entitled to purchase pursuant to the first sentence of this
Section 1.3(c) (or does not timely elect to purchase any such Default Shares),
then the Default Shares that such Non-Defaulting Backstop Commitment Party does
not elect to purchase shall be allocated among the Non-Defaulting Backstop
Commitment Parties who wish to commit to purchase such Default Shares on a pro
rata basis based on the respective Adjusted Commitment Percentages of such
Non-Defaulting Backstop Commitment Parties (such allocation and commitment to
purchase to be made by utilizing the same procedures set forth in the two
immediately preceding sentences, and repeated until there are no Default Shares
remaining to be purchased or until there are no Non-Defaulting Backstop
Commitment Party who wish to commit to purchase such Default Shares).  Each
Non-Defaulting Backstop Commitment Party hereby agrees, severally and not
jointly, to deposit into the Backstop Escrow Account pursuant to the Backstop
Escrow Agreement, by wire transfer of immediately available funds, an amount
equal to the product of (x) the Exercise Price and (y) the Default Shares that
such Non-Defaulting Backstop Commitment Party commits to purchase in accordance
with this Section 1.3(c), if any, no later than 2:00 p.m., New York City time on
the date prior to the Plan Effective Date.  The Default Shares with respect to
which each of the Backstop Commitment Parties deposits funds into the Backstop
Escrow Account pursuant to this Section 1.3(c), if any, are referred to herein
as such Backstop Commitment Party’s “Additional Shares” and, together with its
Backstop Commitment Shares, such Backstop Commitment Party’s “Backstop Shares”. 
For the avoidance of doubt, notwithstanding anything to the contrary set forth
in this Section 1.3(c), no provision of this Agreement shall relieve any
Defaulting Backstop Commitment Party from liability hereunder, or limit the
availability of the remedies set forth in Section 12.9, in connection with any
such Defaulting Backstop

 

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Commitment Party’s Commitment Party Default. Any Defaulting Backstop Commitment
Party shall be liable to each Backstop Commitment Party that is not a Defaulting
Backstop Commitment Party, and to the Company Parties, as a result of any breach
of its obligations hereunder.

 

(d)                                 Notwithstanding anything to the contrary in
this Agreement (but without limiting the provisions of Section 12.1 hereof), any
Backstop Commitment Party, in its sole discretion, may designate by written
notice to Monitronics no later than two (2) Business Days prior to the Closing
that some or all of the Backstop Shares be issued in the name of, and delivered
to, one or more of its controlled Affiliates or Related Funds. Such written
notice of designation shall (i) be addressed to the Monitronics and signed by
such Backstop Commitment Party and such controlled Affiliate or Related Fund,
(ii) specify the number of Backstop Shares to be delivered to or issued in the
name of such controlled Affiliate or Related Fund and (iii) contain a
confirmation by such controlled Affiliate or Related Fund of the accuracy of the
representations set forth in Sections 3.3 through 3.5 as applied to such
controlled Affiliate or Related Fund; provided, that no such designation
pursuant to this Section 1.3(d) shall relieve such Backstop Commitment Party
from its obligations under this Agreement.

 

(e)                                  The Backstop Commitment Parties agree and
acknowledge that the initial Backstop Commitment Percentages set forth in the
Backstop Commitment Schedule as in effect on the Execution Date were generally
calculated based on the relative amounts of Notes held by each of the Backstop
Commitment Parties as of the RSA Effective Date (for each Backstop Commitment
Party, its “Initial Backstop Notes”).  In the event that on or prior to the date
that is seven (7) days after the RSA Effective Date, one or more Backstop
Commitment Parties acquires additional Notes (for each Backstop Commitment
Party, its “Additional Backstop Notes”), the Requisite Commitment Parties may,
by written notice given to the Debtors and the Commitment Party Professionals
within ten (10) Business Days after the RSA Effective Date, require that (i) the
Backstop Commitment Percentages for such Backstop Commitment Parties (each, an
“Additional Backstop Note Party”) be increased proportionally (to reflect the
net principal amount of the additional Notes that it acquired as compared to its
Initial Backstop Notes) and (ii) the initial Backstop Commitment Percentages of
the other Backstop Commitment Parties shall be correspondingly decreased pro
rata as necessary to provide for such increases to the Backstop Commitment
Percentages of the Additional Backstop Note Parties, in which case the Backstop
Commitment Schedule shall thereupon be revised accordingly and a copy of such
revised Backstop Commitment Schedule shall be delivered promptly to Monitronics
and each of the Backstop Commitment Parties. For the avoidance of doubt, a
Backstop Commitment Party’s sale of all or any portion of its Initial Backstop
Notes during such seven (7)-day period shall not result in any decrease in such
Backstop Commitment Party’s initial Backstop Commitment Percentage.  Any
revisions to the Backstop Commitment Schedule pursuant to this
Section 1.3(e) shall not be deemed an amendment to this Agreement and shall not
be subject to Section 10 hereof. As used herein, “Initial Backstop Notes” means,
with respect to any Backstop Commitment Party, the aggregate principal amount of
Notes held by it on the RSA Effective Date.

 

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1.4                               Equity Commitment.

 

(a)                                 On the terms, subject to the conditions, and
in reliance on the representations and warranties set forth in this Agreement
(including the entry of the Agreement Order by the Bankruptcy Court and its
becoming a Final Order), each of the Equity Commitment Parties hereby agrees,
severally and not jointly, that (i) it shall deliver the Contributed Term Loan
Exchange Documentation into escrow, in accordance with the Equity Commitment
Purchase Notice, at least one (1) Business Day prior to the Plan Effective Date
and (ii) on the Plan Effective Date, an aggregate principal amount of Term Loans
held by such Equity Commitment Party and/or one or more of its Affiliates or
Related Funds (which shall equal $100 million in Term Loans for all Equity
Commitment Parties) (the “Contributed Term Loans”) equal to such Equity
Commitment Party’s respective Equity Commitment Share Purchase Price shall,
without any further action on the part of such Equity Commitment Party,
mandatorily be exchanged for a number of Equity Commitment Shares equal to the
quotient of such Equity Commitment Share Purchase Price divided by the Exercise
Price. The Contributed Term Loans shall be treated as equal to cash on a
dollar-for-dollar basis based on the aggregate principal amount of such
Contributed Term Loans (it being understood and agreed that (A) the principal
amount of all such Contributed Term Loans shall continue to accrue interest, at
the applicable rate, through the Plan Effective Date and (B) all accrued and
unpaid interest, at the applicable rate, on such Contributed Term Loans as of
the Plan Effective Date shall be paid in full in cash on the Plan Effective Date
pursuant to the Plan).  The per share purchase price for the Equity Commitment
Shares shall be the same as the Exercise Price.  The Equity Commitments of the
Equity Commitment Parties are several, not joint, obligations of the Equity
Commitment Parties, such that no Equity Commitment Party shall be liable or
otherwise responsible for the Equity Commitment of any other Equity Commitment
Party.

 

(b)                                 Notwithstanding anything to the contrary in
this Agreement (but without limiting the provisions of Section 12.1 hereof), any
Equity Commitment Party, in its sole discretion, may designate by written notice
to Monitronics no later than two (2) Business Days prior to the Closing that
some or all of the Equity Commitment Shares be issued in the name of, and
delivered to, one or more of its controlled Affiliates or Related Funds. Such
written notice of designation shall (i) be addressed to Monitronics and signed
by such Equity Commitment Party and such controlled Affiliate or Related Fund,
(ii) specify the number of Equity Commitment Shares to be delivered to or issued
in the name of such controlled Affiliate or Related Fund and (iii) contain a
confirmation by such controlled Affiliate or Related Fund of the accuracy of the
representations set forth in Sections 3.3 through 3.5 as applied to such
controlled Affiliate or Related Fund; provided, that no such designation
pursuant to this Section 1.4(b) shall relieve such Equity Commitment Party from
its obligations under this Agreement.

 

1.5                               Closing.  The closing of the purchase and sale
of Rights Offering Shares (including with respect to the Backstop Shares) and
the exchange of Contributed Term Loans for Equity Commitment Shares hereunder
(the “Closing”) will occur at 10:00 a.m., New York City time (or at such other
time as is mutually agreed by the Company Parties and the Requisite Commitment
Parties), on the Plan Effective Date.  At the Closing, (i) the Backstop Escrow
Agent shall distribute the funds held in the Backstop Escrow Account to
Monitronics in accordance with the terms of the Backstop Escrow Agreement by
wire transfer of immediately available funds to an account designated by
Monitronics pursuant to wire instructions previously

 

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provided by Monitronics to the Backstop Escrow Agent no later than at least two
(2) Business Days prior to the anticipated Plan Effective Date, (ii) Monitronics
shall issue the Rights Offering Shares (including the Rights Offering Shares
that Backstop Commitment Parties subscribe for pursuant to their Primary
Commitments) in accordance with the Rights Offering Procedures, and
(iii) Monitronics shall deliver to each Commitment Party the Backstop Shares
and/or Equity Commitment Shares, as applicable, to be issued to such Commitment
Party by Monitronics pursuant to this Agreement and such other certificates,
counterparts to agreements, documents or instruments that Monitronics is
required to deliver to such Commitment Party pursuant to Section 6.1 hereof. 
The agreements, instruments, certificates and other documents to be delivered on
the Plan Effective Date by or on behalf of the Company Parties will be delivered
to the Commitment Parties at the offices of Stroock & Stroock & Lavan LLP, 180
Maiden Lane, New York, New York 10038.

 

1.6                               Put Option Premium.  The Debtors and the
Commitment Parties hereby acknowledge that, (a) as consideration for the Put
Option, the Debtors shall issue to the Backstop Commitment Parties (or their
designees) on the Plan Effective Date their ratable shares, based on the
Backstop Commitment Parties’ respective Backstop Commitment Percentages on the
Plan Effective Date, of New Common Stock representing 4.05% of the total shares
of New Common Stock to be issued as of the Plan Effective Date, subject to
dilution by the Post Emergence Incentive Plan (the “Backstop Put Option
Premium”, and such shares, the “Backstop Put Option Premium Shares”), and (b) as
consideration for the granting to Monitronics of the right to sell and cause the
Equity Commitment Parties to purchase the Equity Commitment Shares in exchange
for the Equity Commitment Parties funding their Equity Commitments pursuant to
the terms of this Agreement, subject to the below, the Debtors shall issue to
the Equity  Commitment Parties (or their designees) on the Plan Effective Date
their ratable shares, based on the Equity Commitment Parties’ respective Equity
Commitment Percentages on the Plan Effective Date, of New Common Stock
representing 2.02% of the total shares of New Common Stock to be issued as of
the Plan Effective Date, subject to dilution by the Post Emergence Incentive
Plan (the “Equity Put Option Premium” and, together with the Backstop Put Option
Premium, the “Put Option Premium”, and such shares, the “Equity Put Option
Premium Shares” and, together with the Backstop Put Option Premium Shares, the
“Put Option Premium Shares”)); provided, however, that (i) no Defaulting
Backstop Commitment Party shall be entitled to receive any Backstop Put Option
Premium Shares and (ii) any Non-Defaulting Backstop Commitment Party that
purchases Default Shares of a Defaulting Backstop Commitment Party shall be
entitled to receive a number of additional Backstop Put Option Premium Shares
equal to the product (rounded down to the nearest whole shares) of (x) the
number of Backstop Put Option Premium Shares that would have been issued to such
Defaulting Backstop Commitment Party if such Defaulting Backstop Commitment
Party had not committed a Backstop Default and (y) a fraction, the numerator of
which is the number of Default Shares of such Defaulting Backstop Commitment
Party which such Non-Defaulting Backstop Commitment Party purchases and the
denominator of which is the aggregate number of Default Shares of such
Defaulting Backstop Commitment Party.  The Debtors hereby further acknowledge
and agree that the Put Option Premium Shares (i) shall be, upon entry of the
Agreement Order, fully earned as of the Execution Date (but to be issued only at
the Closing), (ii) shall not be refundable under any circumstance or creditable
against any other amount paid or to be paid in connection with this Agreement or
any of the Contemplated Transactions or otherwise, (iii) shall be issued without
setoff or recoupment and shall not be subject to defense or offset on account of
any claim, defense or counterclaim,

 

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(iv) shall be issued free and clear of any withholding or deduction for any
applicable Taxes, and (vi) shall be treated for U.S. federal income Tax purposes
as a premium for an option to (x) sell and cause the Backstop Commitment Parties
to purchase the Backstop Commitment Shares and (y) sell and cause the Equity
Commitment Parties to purchase the Equity Commitment Shares.

 

1.7                               Transaction Expenses.  Whether or not the
transactions contemplated by this Agreement or any of the other Contemplated
Transactions are consummated unless the Commitment Parties are in breach of this
Agreement, the Debtors shall reimburse or pay, as the case may be, the
Transaction Expenses as follows:  (a) all accrued and unpaid Transaction
Expenses incurred up to (and including) the Execution Date (the “Initial
Transaction Expenses”) shall be paid in full on the Execution Date, (b) prior to
the Petition Date and after the Execution Date, all accrued and unpaid
Transaction Expenses shall be paid in full on a regular and continuing basis
promptly (but in any event within five (5) Business Days) after invoices are
presented to the Debtors, (c) after the Petition Date, all accrued and unpaid
Transaction Expenses incurred up to (and including) the date of the entry by the
Bankruptcy Court of the Agreement Order shall be paid in full within five
(5) Business days of the date of the entry by the Bankruptcy Court of the
Agreement Order, (d) after the date of the entry by the Bankruptcy Court of the
Agreement Order, all accrued and unpaid Transaction Expenses shall be paid in
full on a regular and continuing basis promptly (but in any event within five
(5) Business Days) after invoices are presented to the Debtors without
Bankruptcy Court review or further Bankruptcy Court order, and (e) upon
termination of this Agreement, all accrued and unpaid Transaction Expenses
incurred up to (and including) the date of such termination shall be paid in
full promptly (but in any event within five (5) Business Days) after invoices
are presented to the Debtors without Bankruptcy Court review or further
Bankruptcy Court order; provided, however, that the payment of the Transaction
Expenses under the circumstances set forth in clauses (c), (d) and (after the
Petition Date) (e) above shall be subject to the terms of the Agreement Order. 
All such Transaction Expenses of a Commitment Party shall be paid by the Debtors
to such Commitment Party (or its designee) by wire transfer of immediately
available funds to the account(s) specified by such Commitment Party.  The
Transaction Expenses shall constitute allowed administrative expenses against
the Debtors’ estates under the Bankruptcy Code.  The terms set forth in this
Section 1.7 shall survive termination of this Agreement and shall remain in full
force and effect regardless of whether the transactions contemplated by this
Agreement or any of the other Contemplated Transactions are consummated.  The
obligations set forth in this Section 1.7 are in addition to, and do not limit,
the Debtors’ obligations under Sections 1.5 and 8 hereof.

 

2.                                      Representations and Warranties of the
Company Parties.  Each of the Company Parties hereby, jointly and severally,
represent and warrant to the Commitment Parties as set forth below.  Except for
representations and warranties that are expressly limited as to a particular
date, each representation and warranty is made as of the date hereof and as of
the Plan Effective Date:

 

2.1                               Organization of the Company Parties.  Each
Company Party is a duly organized and validly existing corporation, limited
liability company or partnership, as the case may be, and, if applicable, in
good standing (or the equivalent thereof) under the Laws of the jurisdiction of
its incorporation or organization.  Each Company Party is duly qualified or
registered to do business as a foreign corporation, limited liability company or
partnership (as the

 

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case may be) and is in good standing under the Laws of each jurisdiction in
which either the ownership or use of the properties owned or used by it, or the
nature of the activities conducted by it, requires such qualification or
registration, except where the failure to do so would not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

2.2                               Authority; No Conflict.

 

(a)                                 Each Company Party (i) has the requisite
corporate, partnership or limited liability company (as applicable) power and
authority (A) to enter into, execute and deliver this Agreement, and to enter
into, execute and file with the Bankruptcy Court the Plan and (B) subject to the
entry by the Bankruptcy Court of the Agreement Order and the Confirmation Order,
to perform and consummate the Contemplated Transactions and the transactions
contemplated under the Plan, and (ii) has taken all necessary corporate,
partnership or limited liability company (as applicable) action required for
(A) the due authorization, execution and delivery of this Agreement, (B) the due
authorization, execution and filing with the Bankruptcy Court of the Plan and
(C) the performance and consummation of the Contemplated Transactions and the
transactions contemplated under the Plan.  This Agreement has been duly executed
and delivered by each Company Party.  Subject to the entry of the Agreement
Order, this Agreement constitutes the legal, valid and binding obligation of
each Company Party, enforceable against such Company Party in accordance with
its terms.  Subject to entry of the Confirmation Order and the expiration or
waiver by the Bankruptcy Court of the fourteen (14)-day period set forth in
Bankruptcy Rules 6004(h) and 3020(e), the Plan constitutes the legal, valid and
binding obligation of each Company Party, enforceable against such Company Party
in accordance with its terms.

 

(b)                                 Neither the execution and delivery by the
Company Parties of this Agreement, the execution or filing with the Bankruptcy
Court of the Plan nor the performance or consummation by the Company Parties of
any of the Contemplated Transactions or any of the transactions contemplated
under the Plan will, directly or indirectly (with or without notice or lapse of
time or both):

 

(i)                                     contravene, conflict with or result in a
violation of any provision of the Organizational Documents of any Company Party;

 

(ii)                                  contravene, conflict with or result in a
violation of any existing Law or Order as in effect on the Execution Date and/or
as in effect on the Plan Effective Date to which any Company Party or any of its
Subsidiaries, or any of the properties, assets, rights or interests owned or
used by any Company Party or any of its Subsidiaries, may be subject;

 

(iii)                               contravene, conflict with or result in a
violation or breach of any provision of, or give rise to any right of
termination, acceleration or cancellation under, any Contract to which any
Company Party or any of its Subsidiaries is a party or which any Company Party’s
or any of its Subsidiaries’ properties, assets, rights or interests are bound as
in effect immediately prior to the Closing; or

 

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(iv)                              result in the imposition or creation of any
Encumbrance upon or with respect to any of the assets, properties, rights,
interests or businesses owned or used by any Company Party or any of its
Subsidiaries that will not be released and discharged pursuant to the Plan;

 

except, in the case of clauses (ii), (iii) and (iv) above, where such
occurrence, event or result (x) would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, or (y) arises as a
result of the filing of the Chapter 11 Cases or the discharge or compromise of
claims as a result thereof.

 

(c)                                  Subject to the Approvals and except as set
forth on Schedule 2.2(c), none of the Company Parties will be required to give
any notice to, make any filing with or obtain any Consent from, any Person in
connection with the execution and delivery of this Agreement or the Backstop
Escrow Agreement, or the execution and filing with the Bankruptcy Court of the
Plan, or the performance or consummation of any of the Contemplated Transactions
or any of the transactions contemplated under the Plan, except any of the
foregoing that are required to be given, made or obtained under Law in
connection with the Chapter 11 Cases or would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

 

2.3                               Proceedings.  There are no pending,
outstanding or, to the Knowledge of Monitronics, threatened Proceedings to which
any Company Party or any of its Subsidiaries is a party or to which any
properties, assets, rights or interests of any of them are subject, except for
(a) following the Petition Date, claims of creditors or parties in interest in
the Chapter 11 Cases and (b) Proceedings that if adversely determined to such
Company Party or any of its Subsidiaries would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

 

2.4                               Brokers or Finders.  Neither any Company Party
nor any of its Subsidiaries has incurred any obligation or liability, contingent
or otherwise, for brokerage or finders’ fees or agents’ commissions or other
similar payments in connection with this Agreement, the Backstop Escrow
Agreement, the Plan or any of the Contemplated Transactions or any of the
transactions contemplated under the Plan.

 

2.5                               Exemption from Registration.  Each of the
Specified Issuances will be exempt from the registration and prospectus delivery
requirements of the Securities Act.

 

2.6                               Issuance.  As of the Closing Date, all issued
and outstanding Equity Securities shall have been duly authorized and validly
issued and shall be fully paid and non-assessable, and such Equity Securities
shall be available for issuance to each Commitment Party by all necessary
corporate action and, when issued in accordance with the terms of this Agreement
and the other applicable Definitive Documents, shall be validly issued and shall
be fully paid and non-assessable and free and clear of any Encumbrance or charge
of any kind, or an agreement, arrangement or obligation to create any
Encumbrance or taxes and (except as set forth in the Registration Rights
Agreement and the Governance Documents) the issuance of such Equity Securities
will not be subject under any other agreement to the preemptive or other similar
rights of any security holder of Monitronics.

 

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2.7                               No Violation or Default.  Neither any Company
Party nor any of its Subsidiaries is in violation of its Organizational
Documents.  Neither any Company Party nor any of its Subsidiaries is:  (a) as of
the Execution Date, and except for any defaults arising as a result of the
Chapter 11 Cases and except for the Specified Defaults (as defined in the
Forbearance Agreements), in default, and no event has occurred that, with notice
or lapse of time or both, would constitute a default, in the performance or
observance of any term, covenant or condition contained in any Contract to which
such Company Party or any of its Subsidiaries is a party or by which such
Company Party or any of its Subsidiaries is bound or to which any of the
properties, assets, rights or interests of such Company Party or any of its
Subsidiaries is subject; or (b) in violation of any Law or Order, except, in the
case of clauses (a) and (b) above, for any such default or violation that would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

2.8                               Intellectual Property.  Except as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, (a) each of the Company Parties owns, or possesses the right to
use, all of the patents, patent rights, trademarks, service marks, trade names,
copyrights, mask works, domain names, and any and all applications or
registrations for any of the foregoing (collectively, “IP Rights”) that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person, (b) to the Knowledge of
Monitronics, none of the Company Parties, nor any IP Right, proprietary right,
product, process, method, substance, part, or other material now employed, sold
or offered by or contemplated to be employed, sold or offered by such Person, is
interfering with, infringing upon, misappropriating or otherwise violating any
valid IP Rights of any Person, and (c) no claim or litigation regarding any of
the foregoing is pending or, to the Knowledge of Monitronics, threatened.

 

2.9                               Licenses and Permits.  (a) Each Company Party
and its Subsidiaries possess all licenses, certificates, permits, and other
authorizations issued by, have made all declarations and filings with, and have
given all notices to, the appropriate Governmental Bodies that are necessary or
required for the ownership or lease of their respective properties or assets, or
the conduct or operation of their respective businesses, as owned, leased,
conducted or operated as of the Execution Date and as of the Plan Effective
Date, except where the failure to possess, make or give any of the foregoing
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; and (b) as of the Execution Date and the Plan Effective
Date, neither any Company Party nor any of its Subsidiaries has received notice
of any revocation or modification of any such license, certificate, permit, or
authorization, or has any reason to believe that any such license, certificate,
permit, or authorization will not be renewed in the ordinary course, or that any
such renewal will be materially impeded, delayed, hindered or burdensome to
obtain, except to the extent that any of the foregoing would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

2.10                        Compliance With ERISA.

 

(a)                                 Schedule 2.10(a) hereto sets forth a
complete and accurate list of all employee benefit, compensation and incentive
plans, practices, programs, arrangements and agreements (including, but not
limited to, employee benefit plans within the meaning of Section 3(3) of ERISA),
whether cash or equity, written or unwritten, maintained, administered or

 

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contributed to by any Company Party or any of its Affiliates, for or on behalf
of any employees or former employees of such Company Party or any of its
Affiliates, or for which any Company Party or any of its Affiliates has or could
reasonably be expected to have liabilities (all such plans, practices, programs,
arrangements and agreements, the “Benefit Plans” and each a “Benefit Plan”). 
The Company Parties and their Affiliates have provided the Commitment Parties
with true, correct and complete copies (or, to the extent no such copy exists or
the Benefit Plan is not in writing, an accurate written description) of each
Benefit Plan and, as requested by the Commitment Parties, all material
documentation relating thereto.  Except as would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, each Benefit
Plan has been maintained in compliance in all material respects with its terms
and the requirements of any applicable Laws or Orders, including, but not
limited to, ERISA and the Internal Revenue Code of 1986, as amended (the
“Code”).  Except as would not reasonably be expected, individually or in the
aggregate, have a Material Adverse Effect, none of the Benefit Plans are, and
neither the Company Parties, any of their respective Subsidiaries nor any of
their respective ERISA Affiliates maintain, contribute to, or have an obligation
to contribute to, or in the past six (6) years has maintained, contributed to,
or had an obligation to contribute to, or has or could reasonably be expected to
have any liability with respect to, (i) a plan subject to Title IV of ERISA or
Sections 412 of the Code, (ii) a multiemployer plan (within the meaning of
Section 4001(3) of ERISA or 413(c) of the Code), (iii) any employee welfare
benefit plan within the meaning of Section 3(1) of ERISA that provides for
benefits following termination of service, other than as required by the law
known as COBRA (at the sole cost of the participant or eligible dependent),
(iv) a plan maintained by more than one employer within the meaning of
Section 413(c) of the Code, (v) a plan subject to Sections 4063 or 4064 of
ERISA, or (vi) a “multiple employer welfare arrangement” as defined in
Section 3(40) of ERISA.

 

(b)                                 Except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, neither the
Company Parties, nor their Subsidiaries or ERISA Affiliates, nor, to the
Knowledge of Monitronics, any other “party in interest” or “disqualified person”
with respect to any Benefit Plan has engaged in a non-exempt “prohibited
transaction” within the meaning of Section 406 of ERISA or Section 4975 of the
Code involving such Benefit Plan which, individually or in the aggregate, could
reasonably be expected to result in a tax or penalty imposed by Section 4975 of
the Code or Sections 501, 502 or 510 of ERISA.  To the Knowledge of Monitronics,
no fiduciary has any liability for breach of fiduciary duty or any other failure
to act or comply with the requirements of ERISA, the Code or any other
applicable laws in connection with the administration or investment of the
assets of any Benefit Plan.

 

(c)                                  Except for as provided in Schedule 2.10(c),
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby (including the Rights Offering and the
Restructuring) may (either alone or in combination with another event)
(i) result in any payment becoming due, or increase the amount of any
compensation due, to any current or former officer, director, employee, leased
employee, consultant or agent (or their respective beneficiaries) of the Company
Parties and their Affiliates; (ii) increase any compensation or benefits
otherwise payable under any Benefit Plan; (iii) result in the acceleration of
the time of payment or vesting of any such compensation or benefits; (iv) result
in a non-exempt “prohibited transaction” within the meaning of Section 406 of
ERISA or Section 4975 of the Code, or (v) result in the payment of any amount
that could, individually or

 

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in combination with any other such payment, constitute an “excess parachute
payment,” as defined in Section 280G(b)(1) of the Code.  No current or former
officer, director, employee, leased employee, consultant or agent (or their
respective beneficiaries) has or will obtain a right to receive a gross-up
payment from the Company Parties or their Affiliates with respect to any excise
taxes that may be imposed upon such individual pursuant to Section 409A of the
Code, Section 4999 of the Code or otherwise.

 

(d)                                 All liabilities or expenses of the Company
Parties, and their Affiliates, in respect of any Benefit Plan (including workers
compensation) which have not been paid, have been properly accrued on their
respective most recent financial statements in compliance with GAAP.  All
contributions (including all employer contributions and employee salary
reduction contributions) or premium payments required to have been made under
the terms of any Benefit Plan, or in accordance with applicable law, as of the
date hereof have been timely made or reflected on the applicable company’s
financial statements in accordance with GAAP.

 

2.11                        No Unlawful Payments.  Since January 1, 2017, to the
Knowledge of Monitronics, neither any Company Party nor any of its Subsidiaries,
nor any current or former director, officer or management employee of any
Company Party or any of its Subsidiaries has, directly or indirectly: 
(a) offered, paid, delivered or otherwise used any funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (b) offered, delivered or made any direct or indirect
unlawful payment to any official or employee of a Governmental Body;
(c) violated any provision of the U.S. Foreign Corrupt Practices Act of 1977 or
(d) offered, delivered, made or received any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.

 

2.12                        Absence of Certain Changes or Events.  Since
March 31, 2019,  (a) each Company Party and its Subsidiaries have conducted
their respective businesses in the ordinary course of business consistent with
past practices; (b) except as otherwise required by Law or GAAP (as defined
below), there has not been any change with respect to any finance or tax
accounting elections, methods, principles or practices of any Company Party or
any of its Subsidiaries; (c) each of the Company Parties (and each of the
Company Parties shall cause Ascent to) file the Company SEC Documents within the
time periods required under the Exchange Act, in each case in accordance with
ordinary course practices and (d) neither any Company Party nor any of its
Subsidiaries has incurred any damage, destruction, loss or casualty (not covered
by insurance) to its property or assets with a value, individually or in the
aggregate, in excess of $1,000,000.  Since March 31, 2019, there has not been
any Material Adverse Effect.

 

2.13                        Title to Real and Personal Property.

 

(a)                                 Real Property.  Each of the Company Parties
has good and defensible title to its respective real properties, in each case,
except for Permitted Encumbrances and except for defects in title that do not
materially interfere with its ability to conduct its business as currently
conducted or to utilize such properties and assets for their intended purposes,
and except where the failure (or failures) to have such title would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.  To the Knowledge of Monitronics, all such properties and assets
are free and clear of Encumbrances, except for Permitted Encumbrances

 

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and except for such Encumbrances as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

 

(b)                                 Leased Real Property.  Each of the Company
Parties is in compliance with all obligations under all leases to which it is a
party that have not been rejected in the Chapter 11 Cases, except where the
failure to comply would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect, and none of such Persons has received
written notice of any good faith claim asserting that such leases are not in
full force and effect, except leases in respect of which the failure to be in
full force and effect would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.  Each of the Company Parties enjoys
peaceful and undisturbed possession under all such leases, other than leases in
respect of which the failure to enjoy peaceful and undisturbed possession would
not reasonably be expected to materially interfere with its ability to conduct
its business as currently conducted or have, individually or in the aggregate, a
Material Adverse Effect.

 

(c)                                  Personal Property.  Except to the extent
such failure would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect, each of the Company Parties have good title
to, free and clear of any and all Encumbrances, or a valid leasehold interest
in, all personal properties, machinery, equipment and other tangible assets of
the business necessary for the conduct of the business as presently conducted
and such properties, (i) are in the possession or control of the applicable
Company Party, as appropriate; and (ii) are in good and operable condition and
repair, reasonable wear and tear excepted.

 

2.14                        Financial Statements.  Each of the audited
consolidated balance sheet of Monitronics and its Subsidiaries as of
December 31, 2018, and the related consolidated statements of operations,
stockholders’ (deficiency) equity and cash flows for the twelve-month period
then ended (the “Financial Statements”), (i) have been prepared in accordance
with United States generally accepted accounting principles (“GAAP”) applied on
a consistent basis throughout the periods covered thereby; and (ii) fairly
present in all material respects the consolidated financial condition,
stockholders’ equity and results of operations and cash flows of Monitronics and
its Subsidiaries as of the respective dates thereof and for the periods referred
to therein.

 

2.15                        Tax Matters.

 

(a)                                 (i) All material tax returns required to be
filed by or on behalf of any Company Party or any of its Subsidiaries, or any
Affiliated Group of which any Company Party or any of its Subsidiaries is or was
a member, have been properly prepared and duly and timely filed with the
appropriate taxing authorities in all jurisdictions in which such tax returns
are required to be filed (after giving effect to any valid extensions of time in
which to make such filings); (ii) all material taxes payable by or on behalf of
any Company Party or any of its Subsidiaries either directly, as part of the
consolidated tax return of another taxpayer, or otherwise, have been fully and
timely paid, and adequate reserves or accruals for taxes have been provided in
the balance sheet included as part of the 2018 Financial Statements in respect
of any period for which tax returns have not yet been filed or for which taxes
are not yet due and owing; and (iii) no agreement, waiver or other document or
arrangement extending or having the effect of extending the period for
assessment or collection of a material amount of taxes (including any

 

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applicable statute of limitations) has been executed or filed with the IRS or
any other Governmental Body by or on behalf of any Company Party or any of its
Subsidiaries and no power of attorney in respect of any tax matter is currently
in force.

 

(b)                                 Each Company Party and its Subsidiaries have
complied in all material respects with all applicable Laws relating to the
payment and withholding of taxes and have duly and timely withheld from employee
salaries, wages, and other compensation and have paid over to the appropriate
taxing authorities or other applicable Governmental Bodies all amounts required
to be so withheld and paid over for all periods under all applicable Laws.

 

(c)                                  (i) All material deficiencies asserted or
assessments made as a result of any examinations by the IRS or any other
Governmental Body of the tax returns of or covering or including any Company
Party or any of its Subsidiaries have been fully paid, and there are no other
material audits or investigations by any taxing authority or any other
Governmental Body in progress, nor has any Company Party or any of its
Subsidiaries received notice from any taxing authority or other applicable
Governmental Body that it intends to conduct such an audit or investigation;
(ii) no issue has been raised by a federal, state, local, or foreign taxing
authority or other applicable Governmental Body in any current or prior
examination that, by application of the same or similar principles, could
reasonably be expected to result in a proposed deficiency for any subsequent
taxable period; and (iii) there are no Encumbrances for taxes with respect to
any Company Party or any of its Subsidiaries, or with respect to the assets or
business of any Company Party or any of its Subsidiaries, nor is there any such
Encumbrance that is pending or threatened, other than Permitted Encumbrances.

 

(d)                                 None of the tax returns of any Company Party
contain any position that is, or would be, subject to penalties under
Section 6662 of the Code (or any corresponding provisions of state, local or
foreign tax Law).  No Company Party has entered into any “listed transactions”
as defined in Treasury Regulation Section 1.6011-4(b)(2) or comparable provision
of state Law.

 

2.16                        Labor and Employment Compliance.

 

(a)                                 Except as would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, each
Company Party and each of its Subsidiaries is in compliance with all applicable
Laws or Orders respecting employment and employment practices, including all
Laws and Orders regulating the terms and conditions of employment, wages and
hours, fair labor standards, workers compensation, disability, immigration,
labor and equal employment opportunity.

 

(b)                                 There is no material Proceeding pending
before any Governmental Body or, to the Knowledge of Monitronics, threatened
against any Company Party or any of its Subsidiaries alleging any
employment-related claim, including unfair labor practices, employment
discrimination, harassment, retaliation, equal pay, wage and hour or any other
employment related matter arising under applicable Laws or Orders.

 

(c)                                  Neither the Company Parties nor any of
their Subsidiaries is a party to or bound by any material labor agreement, union
contract or collective bargaining agreement

 

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respecting the employees of the Company Parties or any of its Subsidiaries;
there is no material union organizing, labor strike, dispute, slow-down or work
stoppage actually pending or, to the Knowledge of Monitronics, threatened
against or involving any employees of any Company Party or any of its
Subsidiaries.  None of the employees of any Company Party or any of its
Subsidiaries is covered by any collective bargaining agreement, and no
collective bargaining agreement is currently being negotiated by any Company
Party or any of its Subsidiaries.

 

(d)                                 Each individual currently providing services
to any of the Company Parties or their Subsidiaries, or who have provided
services to the Company Parties or any of their Subsidiaries in the preceding
three years have been properly classified as an employee or an independent
contractor, except as would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.  The Company Parties and their
Affiliates have no direct or indirect material liability, whether absolute or
contingent, with respect to any misclassification of any person as an
independent contractor rather than as an employee, or with respect to any
employee leased from another employer.

 

(e)                                  Except as provided on Schedule
2.16(e) hereto, neither the Company Parties nor any of their Subsidiaries have
effectuated an event giving rise to a notice obligation including a “plant
closing” or “mass layoff,” as those terms are defined in the WARN Act, or any
analogous state or local Law, affecting, in whole or in part, any site of
employment, facility or operating unit of the Company Parties or any of their
Subsidiaries.

 

(f)                                   Except as would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, to the
Knowledge of Monitronics, no employees of the Company Party or any of its
Subsidiaries are, in any material respect, in violation of any term of any
employment contract, non-disclosure agreement, or non-competition agreement with
the Company Party or any of its Subsidiaries.  To the Knowledge of Monitronics,
no employee of the Company Party or any of its Subsidiaries is, in any material
respect, in violation of the terms of any restrictive covenant with any third
party, including any former employer relating to the right of any such employee
to be employed by the Company Party or any of its Subsidiaries or to the use of
trade secrets or proprietary information of others and, to the Knowledge of
Monitronics, no such claims are threatened, except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

 

2.17                        Product Liability.  Neither any Company Party nor
any of its Subsidiaries has received any notice relating to any claim involving
use of or exposure to any of the products (or any part or component) designed,
manufactured, serviced or sold, or services performed, by such Company Party or
any of its Subsidiaries, including for negligence, strict liability, design or
manufacturing defect, conspiracy, failure to warn, or breach of express or
implied warranties of merchantability or fitness for any purpose of use, or from
any alleged breach of implied warranties or representations, or any alleged
noncompliance with any applicable Laws pertaining to products liability matters,
other than any such notice relating to claim that would not, individually or in
the aggregate with other notices of claims, reasonably be expected to have a
Material Adverse Effect.

 

2.18                        Company SEC Documents.  Since December 31, 2018,
each of Ascent and Monitronics has filed all required reports, schedules, forms
and statements with the SEC.  As

 

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of their respective dates, and giving effect to any amendments or supplements
thereto filed prior to the date of this Agreement, each of the Company SEC
Documents that have been filed as of the date of this Agreement complied in all
material respects with the requirements of the Securities Act or the Exchange
Act applicable to such Company SEC Documents.  Each of Ascent and Monitronics
has filed with the SEC all Material Contracts that are required to be filed as
exhibits to the Company SEC Documents that have been filed as of the date of
this Agreement.  No Company SEC Document that has been filed prior to the date
of this Agreement, after giving effect to any amendments or supplements thereto
and to any subsequently filed Company SEC Documents, in each case filed prior to
the date of this Agreement, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

 

2.19                        Internal Control Over Financial Reporting.  Except
as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, each of Ascent and Monitronics has established and
maintains a system of internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act) that complies
with the requirements of the Exchange Act and has been designed to provide
reasonable assurances regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
GAAP and to the Knowledge of Monitronics, there are no weaknesses in the
Ascent’s or Monitronics’ internal control over financial reporting as of the
date hereof.

 

2.20                        Disclosure Controls and Procedures.  Except as would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, each of Ascent and Monitronics maintains disclosure controls and
procedures (within the meaning of Rules 13a-15(e) and 15d-15(e) promulgated
under the Exchange Act) designed to ensure that information required to be
disclosed by Ascent or Monitronics in the reports that it files and submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the SEC’s rules and forms, including that
information required to be disclosed by Ascent or Monitronics in the reports
that it files and submits under the Exchange Act is accumulated and communicated
to management of Ascent or Monitronics as appropriate to allow timely decisions
regarding required disclosure.

 

2.21                        Compliance with Money Laundering Laws.  The
operations of the Company Parties are and, since December 31, 2018 have been at
all times, conducted in compliance in all material respects with applicable
financial recordkeeping and reporting requirements of the U.S. Currency and
Foreign Transactions Reporting Act of 1970, the money laundering statutes of all
jurisdictions in which the Company Parties operate (and the rules and
regulations promulgated thereunder) and any related or similar Laws
(collectively, the “Money Laundering Laws”) and no material Legal Proceeding by
or before any Governmental Body or any arbitrator involving any of the Company
Parties with respect to Money Laundering Laws, which is (or would be) reasonably
expected to have a Material Adverse Effect, is pending or, to the Knowledge of
Monitronics, threatened.

 

2.22                        Compliance with Sanctions Laws.  None of the Company
Parties nor, to the Knowledge of Monitronics, any of their respective directors,
officers, employees or other

 

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Persons acting on their behalf with express authority to so act is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department.  The Company Parties will not directly
or indirectly use the proceeds of the Rights Offering, or lend, contribute or
otherwise make available such proceeds to any other Company Party, joint venture
partner or other Person, for the purpose of financing the activities of any
Person that, to the Knowledge of Monitronics, is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department.

 

2.23                        Investment Company Act.  None of the Company Parties
is an “investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended (the “Investment Company Act”), and
this conclusion is based on one or more bases or exclusions other than Sections
3(c)(1) and 3(c)(7) of the Investment Company Act, including that none of the
Company Parties comes within the basic definition of ‘investment company’ under
section 3(a)(1) of the Investment Company Act.

 

2.24                        Arm’s Length.  Each Company Party acknowledges and
agrees that the Commitment Parties are acting solely in the capacity of arm’s
length contractual counterparties to the Company Parties with respect to the
transactions contemplated hereby (including in connection with determining the
terms of the Rights Offering) and not as financial advisors or fiduciaries to,
or agents of, the Company Parties or any other Person.  Additionally, the
Commitment Parties are not advising the Company Parties or any other Person as
to any legal, tax, investment, accounting or regulatory matters in any
jurisdiction.  Each Company Party shall consult with its own advisors concerning
such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby and the
other Contemplated Transactions, and the Commitment Parties shall have no
responsibility or liability to any Company Party with respect thereto.  Any
review by the Commitment Parties of the Company Parties, the Contemplated
Transactions or other matters relating to the Contemplated Transactions will be
performed solely for the benefit of the Commitment Parties and shall not be on
behalf of the Company Parties.

 

3.                                      Representations and Warranties of the
Commitment Parties.  Each Commitment Party, in each case severally and not
jointly and solely with respect to itself, hereby represents and warrants to the
Company Parties as set forth below.  Except for representations and warranties
that are expressly limited as to a particular date, each representation and
warranty is made as of the date hereof and as of the Plan Effective Date:

 

3.1                               Organization of Such Commitment Party.  Such
Commitment Party is duly organized or formed (as applicable), validly existing
and in good standing under the Laws of its jurisdiction of incorporation or
formation (as applicable), with full corporate, partnership or limited liability
company (as applicable) power and authority to conduct its business as it is now
conducted.

 

3.2                               Authority; No Conflict.

 

(a)                                 Such Commitment Party (i) has the requisite
corporate, partnership or limited liability company (as applicable) power and
authority (A) to enter into, execute and deliver this Agreement, and (B) to
perform and consummate the transactions contemplated

 

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hereby, and (ii) has taken all necessary corporate, partnership or limited
liability company (as applicable) action required for (A) the due authorization,
execution and delivery of this Agreement and (B) the performance and
consummation of the transactions contemplated hereby.  This Agreement has been
duly executed and delivered by such Commitment Party.  This Agreement
constitutes the legal, valid and binding obligation of such Commitment Party,
enforceable against such Commitment Party, as applicable, in accordance with its
terms.

 

(b)                                 Neither the execution and delivery by such
Commitment Party of this Agreement nor the performance or consummation by such
Commitment Party, of any of the transactions contemplated hereby will, directly
or indirectly (with or without notice or lapse of time or both):

 

(i)                                     contravene, conflict with, or result in
a violation of any provision of the Organizational Documents of such Commitment
Party;

 

(ii)                                  contravene, conflict with, or result in a
violation of, any pending or existing Law or Order to which such Commitment
Party, or any of the properties, assets, rights or interests owned or used by
such Commitment Party may be subject; or

 

(iii)                               contravene, conflict with or result in a
violation or breach of any provision of, or give rise to any right of
termination, acceleration or cancellation under, any Contract to which such
Commitment Party is a party or which any of such Commitment Party’s properties,
assets, rights or interests are bound;

 

except, in the case of clauses (ii) and (iii) above, where such occurrence,
event or result would not reasonably be expected to prohibit, materially delay
or materially and adversely impact such Commitment Party’s performance or
consummation of its obligations under this Agreement.

 

Except (x) for Consents which have been obtained, notices which have been given
and filings which have been made and (y) where the failure to give any notice,
obtain any Consent or make any filing would not reasonably be expected to
prevent or materially delay the consummation of any of the transactions
contemplated by this Agreement, such Commitment Party is not and will not be
required to give any notice to, make any filing with or obtain any Consent from,
any Person in connection with the execution and delivery by such Commitment
Party of this Agreement or the consummation or performance by such Commitment
Party of any of the transactions contemplated hereby or thereby.

 

3.3                               Backstop Shares and Equity Commitment Shares
Not Registered.  Such Commitment Party understands that the Backstop Shares or
the Equity Commitment Shares, as applicable, have not been registered under the
Securities Act.  Such Commitment Party also understands that the Backstop Shares
and the Equity Commitment Shares are being offered and sold pursuant to an
exemption from registration provided under Section 4(a)(2) of the Securities Act
or Regulation D promulgated thereunder and/or Regulation S promulgated under the
Securities Act, based in part upon such Commitment Party’s representations
contained

 

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in this Agreement and cannot be sold unless subsequently registered under the
Securities Act or an exemption from registration is available.

 

3.4                               Acquisition for Own Account.  Such Commitment
Party is acquiring the Backstop Shares or Equity Commitment Shares, as
applicable, for its own account (or for the accounts for which it is acting as
investment advisor or manager) for investment and not with a present view toward
distribution, within the meaning of the Securities Act.

 

3.5                               Accredited Investor or Qualified Institutional
Buyer.  Such Commitment Party is (a) an “accredited investor” (as defined in
Regulation D promulgated under the Securities Act), “qualified institutional
buyer” (as defined in Rule 144A under the Securities Act), or “a non-U.S.
person” (as defined in Regulation S promulgated under the Securities Act) and is
not participating on behalf or on account of a U.S. person and (b) has such
knowledge and experience in financial and business matters that such Commitment
Party is capable of evaluating the merits and risks of its investment in the
Backstop Shares or Equity Commitment Shares, as applicable.  Such Commitment
Party understands and is able to bear any economic risks of such investment.

 

3.6                               Access to Information.  Such Commitment Party
acknowledges that it has been afforded the opportunity to ask questions and
receive answers concerning the Debtors and to obtain additional information that
it has requested to verify the accuracy of the information contained herein.

 

3.7                               Brokers or Finders.  Such Commitment Party has
not, and its Representatives have not, incurred any obligation or liability,
contingent or otherwise, for brokerage or finders’ fees or agents’ commissions
or other similar payments in connection with this Agreement, for which the
Debtors may be liable.

 

3.8                               Proceedings.  There is no pending, outstanding
or, to the knowledge of such Commitment Party threatened Proceedings against
such Commitment Party that challenges, or that may have the effect of
preventing, delaying, making illegal or otherwise interfering with, any of the
transactions contemplated by this Agreement, which, if adversely determined,
would reasonably be expected to have a material adverse effect on the ability of
such Commitment Party to consummate the transactions contemplated by this
Agreement.

 

3.9                               Sufficiency of Funds, Contributed Term Loans. 
On the Plan Effective Date, (a) such Backstop Commitment Party will have
available funds sufficient to pay the aggregate Exercise Price for the Backstop
Commitment Shares to be purchased by such Backstop Commitment Party hereunder
and (b) such Equity Commitment Party will have available Contributed Term Loans
sufficient to exchange for the Equity Commitment Shares to be received by such
Equity Commitment Party hereunder at the aggregate Exercise Price therefor.

 

3.10                        Arm’s Length.  Each Commitment Party acknowledges
and agrees that the Debtors are acting solely in the capacity of arm’s length
contractual counterparties to the Commitment Parties, with respect to the
transactions contemplated hereby (including in connection with determining the
terms of the Rights Offering) and not as financial advisors or

 

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fiduciaries to, or agents of, the Commitment Parties, or any other Person. 
Additionally, the Debtors are not advising the Commitment Parties or any other
Person as to any legal, tax, investment, accounting or regulatory matters in any
jurisdiction.  The Commitment Parties shall consult with their own advisors
concerning such matters and shall be responsible for making their own
independent investigation and appraisal of the transactions contemplated hereby
and the other Contemplated Transactions, and, except for the indemnification
provisions set forth in Section 8 hereof, the Debtors shall have no
responsibility or liability to the Commitment Parties with respect thereto.  Any
review by the Debtors of the Contemplated Transactions or other matters relating
to the Contemplated Transactions will be performed solely for the benefit of the
Debtors and shall not be on behalf of the Commitment Parties.

 

Anything herein to the contrary notwithstanding, nothing contained in any of the
representations, warranties or acknowledgments made by any Commitment Party in
this Section 3 or elsewhere in this Agreement will operate to modify or limit in
any respect the representations and warranties of the Debtors or to relieve the
Debtors from any obligations to the Commitment Parties for breach thereof or the
making of misleading statements or the omission of material facts in connection
with the transactions contemplated herein.

 

4.                                      Covenants of the Company Parties.  Each
of the Company Parties hereby, jointly and severally, covenants and agrees with
the each of the Commitment Parties as set forth in this Section 4.

 

4.1                               Agreement Motion and Agreement Order.  On the
Petition Date, the Debtors shall file a motion and supporting papers (the
“Agreement Motion”) seeking an order of the Bankruptcy Court which, for the
avoidance of doubt, may be the same order as the Confirmation Order, in form and
substance acceptable to each of the Commitment Parties, approving the Debtors’
execution and delivery of this Agreement , the Debtors’ assumption of this
Agreement pursuant to Section 365 of the Bankruptcy Code, and the consummation
of the transactions contemplated hereby and thereby (the “Agreement Order”),
including the Rights Offering, the Rights Offering Procedures, and the payment
by the Debtors of the Put Option Premium and the Transaction Expenses on the
terms set forth herein and therein, and the indemnification provisions in favor
of the Indemnified Parties set forth herein and therein; provided, that the
signature pages, exhibits and schedules to any copy of this Agreement that is
filed with the Bankruptcy Court shall, subject to Bankruptcy Court approval, be
subject to redaction as the Commitment Parties determine to be reasonably
necessary and appropriate, including redacting the names of the Commitment
Parties, the Backstop Commitment and the Backstop Commitment Percentage of each
Backstop Commitment Party and the Equity Commitment Percentage of each Equity
Commitment Party; provided, further, however, the Debtors shall be permitted,
subject to Section 12.13, to disclose unredacted signature pages, exhibits and
schedules of this Agreement to the extent required by the Bankruptcy Court, but
with respect to any Backstop Commitment Percentages, Equity Commitment
Percentages and Commitment amounts, the Debtors shall use reasonable best
efforts to limit any such disclosure to filing such information under seal with
the Bankruptcy Court or otherwise providing for it to be disclosed in a manner
that does not result in its becoming publicly available.  The Debtors shall
provide drafts of the Agreement Motion to the Commitment Parties for their
review and comment at least five (5) days prior to the Petition Date.  The
Debtors agree that they shall use their commercially reasonable efforts to
(a) obtain a waiver of Bankruptcy Rule 6004(h) and

 

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request that the Agreement Order be effective immediately upon its entry by the
Bankruptcy Court, which Agreement Order shall not be revised, modified, or
amended by the Confirmation Order or any other further order of the Bankruptcy
Court, (b) fully support the Agreement Motion and any application seeking
Bankruptcy Court approval and authorization to pay the fees and expenses under
this Agreement, including the Transaction Expenses, as an administrative expense
of the Debtors’ estates, and (c) obtain approval of the Agreement Order, which,
for the avoidance of doubt, may be the same order as the Confirmation Order, as
soon as practicable after the Petition Date.

 

4.2                               Rights Offering.  The Debtors shall promptly
(and in any event, at least five (5) days prior to the Petition Date) provide
copies of all documents, instruments, agreements and other materials to be
entered into, delivered, distributed or otherwise used in connection with the
Rights Offering, including the Rights Offering Procedures (collectively, the
“Rights Offering Documentation”) for review and comment by the Backstop
Commitment Parties and all such Rights Offering Documentation shall be in form
and substance consistent with this Agreement and the Restructuring Support
Agreement and otherwise reasonably acceptable to the Requisite Commitment
Parties.

 

4.3                               Conditions Precedent.  The Debtors shall use
their commercially reasonable efforts to satisfy or cause to be satisfied all
the conditions precedent set forth in Section 6.1 hereof (including procuring
and obtaining all Consents, authorizations and waivers of, making all filings
with, and giving all notices to, third parties (including Governmental Bodies)
which may be necessary or required on its part in order to effect the
transactions contemplated herein).

 

4.4                               Notification.  The Debtors shall: (a) on
request by any of the Backstop Commitment Parties, notify such Backstop
Commitment Party, or cause the applicable subscription agent for the Rights
Offering (the “Subscription Agent”) to notify such Backstop Commitment Party, of
the aggregate number of Rights known by the Debtors or the Subscription Agent to
have been exercised pursuant to the Rights Offering as of the close of business
on the preceding Business Day or the most recent practicable time before such
request, as the case may be, and (b) following the Rights Offering Expiration
Time, timely comply with its obligations under Section 1.1(c) hereof.

 

4.5                               Use of Proceeds.  The Debtors shall use the
Proceeds received from the Commitment Parties to, among other things, fund the
payment of distributions to be made on the Plan Effective Date pursuant to the
Plan and in accordance with the Restructuring Support Agreement and the Term
Sheets.

 

4.6                               Access.  Promptly following the Execution
Date, each of the Debtors will, and will use commercially reasonable efforts to
cause its employees, officers, directors, accountants, attorneys and other
advisors (collectively, “Representatives”) to, provide each of the Commitment
Parties and its Representatives with reasonable access, upon reasonable prior
notice, during normal business hours, and without any material disruption to the
conduct of the Debtors’ business, to officers, management and key employees and
other Representatives of any of the Debtors and to assets, properties,
contracts, books, records and any other information

 

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concerning the business and operations of any of the Debtors as any of the
Commitment Parties or any of its Representatives may reasonably request.

 

4.7                               DIP Facility.  The Debtors shall promptly
provide copies of all drafts and final execution copies of all DIP
Documentation, if any, for review and comment by the Commitment Parties and the
Consenting Creditors.  Any comments received by the Debtors from the Commitment
Parties, the Consenting Creditors, or their respective Representatives with
respect to the DIP Documentation shall be considered by them in good faith and,
to the extent the Debtors disagree with any such comments, they shall inform the
Commitment Parties and the Consenting Creditors thereof and discuss the same
with the Commitment Parties and the Consenting Creditors prior to entering into,
delivering or using any such DIP Documentation.  The Debtors shall not file with
the Bankruptcy Court or enter into any DIP Documentation unless such DIP
Documentation is consistent in all material respects with the DIP/Exit Facility
Commitment and otherwise reasonably acceptable to the Requisite Commitment
Parties, the Required Consenting Noteholders and the Required Consenting Term
Lenders.  The Debtors shall comply, in a timely manner, with all of the terms,
conditions and covenants contained in the DIP Documentation.

 

4.8                               Exit Facilities.  The Debtors shall promptly
provide copies of all drafts and final execution copies of all documents,
instruments, agreements and other materials to be entered into, delivered or
otherwise used in connection with the Exit Facilities (the “Exit Facility
Documentation”) for review and comment by the Commitment Parties and the
Consenting Creditors.  Any comments received by the Debtors from the Commitment
Parties, the Consenting Creditors or their respective Representatives with
respect to the Exit Facility Documentation shall be considered by them in good
faith and, to the extent the Debtors disagree with any such comments, they shall
inform the Commitment Parties and the Consenting Creditors thereof and discuss
the same with the Commitment Parties and the Consenting Creditors prior to
entering into, delivering or using any such Exit Facility Documentation.  The
Debtors shall not file with the Bankruptcy Court or enter into any Exit Facility
Documentation unless such Exit Facility Documentation is reasonably acceptable
to the Requisite Commitment Parties, the Required Consenting Noteholders and the
Required Consenting Term Lenders.  The Debtors shall comply, in a timely manner,
with all of the terms, conditions and covenants contained in the Exit Facility
Documentation.

 

4.9                               Specified Issuances.  The Debtors shall
(a) consult with Stroock with respect to the steps (the “Specified Issuance
Steps”) to be taken by the Debtors to ensure that (i) each of the Specified
Issuances described in clauses (a) and (b)(i) of the definition of Specified
Issuances are exempt from the registration and prospectus delivery requirements
of Section 5 of the Securities Act pursuant to Section 1145, (ii) the Specified
Issuances described in clauses (c) through (f) of the definition of Specified
Issuances are exempt from the registration and prospectus delivery requirements
of Section 5 of the Securities Act pursuant to (x) Section 4(a)(2) of the
Securities Act or Regulation D promulgated thereunder or (y) Regulation S
promulgated under the Securities Act, and (iii) the Specified Issuances
described in clause (b)(ii) of the definition of Specified Issuances are exempt
from the registration and prospectus delivery requirements of Section 5 of the
Securities Act pursuant to Section 1145, Section 4(a)(2) of the Securities Act
or Regulation D promulgated thereunder, and/or Regulation S promulgated under
the Securities Act and (b) promptly provide copies of all documents,
instruments, questionnaires,

 

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agreements and other materials to be entered into, delivered, distributed or
otherwise used in connection with the Specified Issuances (the “Specified
Issuance Documentation”) for review and comment by the Commitment Parties.  Any
comments received by the Debtors from the Commitment Parties or their respective
Representatives with respect to the Specified Issuance Steps or the Specified
Issuance Documentation shall be considered by them in good faith and, to the
extent the Debtors disagree with any such comments, they shall inform the
Commitment Parties thereof and discuss the same with the Commitment Parties
prior to taking such Specified Issuance Steps or entering into, delivering,
distributing or using any such Specified Issuance Documentation.  The Debtors
shall not file with the Bankruptcy Court or enter into any Specified Issuance
Documentation without the prior written consent of the Requisite Commitment
Parties.

 

4.10                        Blue Sky; Form D.  The Company Parties shall, on or
before the Closing, take such action as the Company Parties shall reasonably
determine is necessary in order to obtain an exemption for, or to qualify the
Backstop Shares and Equity Commitment Shares issued hereunder for, sale to the
Commitment Parties at the Closing pursuant to this Agreement under applicable
securities and “Blue Sky” Laws of the states of the United States (or to obtain
an exemption from such qualification) and any applicable foreign jurisdictions,
and shall provide evidence of any such action so taken to the Commitment Parties
on or prior to the Closing. The Company Parties shall timely make all filings
and reports relating to the offer and sale of the Backstop Shares and Equity
Commitment Shares issued hereunder required under applicable securities and
“Blue Sky” Laws of the states of the United States following the Closing.
Following the Closing, the Company Parties shall timely file a Form D with the
SEC with respect to the Backstop Shares and Equity Commitment Shares issued
hereunder to the extent required under Regulation D of the Securities Act and
shall provide, upon request, a copy thereof to each Commitment Party. The
Company Parties shall pay all fees and expenses in connection with satisfying
their obligations under this Section 4.10.

 

4.11                        Share Legend.  Except for any Backstop Shares being
issued pursuant to Section 1145, if any, each certificate evidencing Backstop
Shares or Equity Commitment Shares issued hereunder, and each certificate
evidencing Rights Offering Shares that were not pursuant to Section 1145, and
each certificate issued in exchange for or upon the Transfer of any such shares,
shall be stamped or otherwise imprinted with a legend (the “Legend”) in
substantially the following form:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON [DATE
OF ISSUANCE], HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”), OR ANY OTHER APPLICABLE STATE SECURITIES LAWS, AND
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR AN AVAILABLE EXEMPTION FROM REGISTRATION THEREUNDER.”

 

In the event that any such shares are uncertificated, such shares shall be
subject to a restrictive notation substantially similar to the Legend in the
stock ledger or other appropriate records maintained by Monitronics or its
transfer agent and the term “Legend” shall include such restrictive notation.
Monitronics shall remove the Legend (or restrictive notation, as applicable) set
forth above from the certificates evidencing any such shares (or the share
register or other

 

27

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appropriate Monitronics records, in the case of uncertificated shares), upon
request, at any time after the restrictions described in such Legend cease to be
applicable, including, as applicable, when such shares may be sold under
Rule 144 of the Securities Act. Monitronics may reasonably request such
opinions, certificates or other evidence that such restrictions no longer apply
as a condition to removing the Legend.

 

4.12                        Registration Rights Agreement.  The Plan shall
provide that from and after the Closing each Commitment Party (or any Affiliate
or Related Fund thereof) that receives shares of New Common Stock pursuant to
the Restructuring and that are “control” or “restricted” securities shall be
entitled to registration rights pursuant to a registration rights agreement with
Reorganized Monitronics, which agreement shall be consistent with the terms set
forth in the “Registration Rights” section of the Rights Offering Term Sheet and
otherwise be in form and substance reasonably acceptable to the Requisite
Commitment Parties and Monitronics (the “Registration Rights Agreement”). A form
of the Registration Rights Agreement shall be filed with the Bankruptcy Court as
part of the Plan or an amendment or supplement thereto.

 

4.13                        Reorganized Company.

 

(a)                                 If the Non-Ascent Restructuring Toggle shall
not have occurred and the Merger is consummated on or prior to the Plan
Effective Date, the Company Parties shall cause the New Common Stock to be
registered under Section 12(g) of the Exchange Act as promptly as practicable
after the Closing (including, if the Registration Statement is then effective,
by filing a Form 8-A with the SEC on the Plan Effective Date).  If the
Non-Ascent Restructuring Toggle occurs, the Company Parties shall, if requested
in writing by the Requisite Commitment Parties, cause the New Common Stock to be
registered under Section 12(g) of the Exchange Act as promptly as practicable
after the Closing.

 

(b)                                 The Company Parties shall cause all shares
of New Common Stock that are issued pursuant to this Agreement or the Plan or
that are issued in the Rights Offering (excluding shares that require or are
subject to the Legend) to be eligible for deposit with The Depository Trust
Company (“DTC”) and issued through the facilities of DTC on the Plan Effective
Date or as promptly as practicable thereafter.  With respect to any Backstop
Shares, Equity Commitment Shares or Rights Offering Shares that were issued with
the Legend and are owned by a Commitment Party or any of its Affiliates or
Related Funds, Monitronics shall, upon request, in connection with the removal
of the Legend or at any time thereafter, provide such cooperation as may be
reasonably requested by the Commitment Party (or Affiliate or Related Fund, as
applicable) in connection with having such shares registered in the name of
Cede & Co., as DTC’s nominee, and evidenced by shares held on behalf of a DTC
participant as nominee for such Commitment Party (or Affiliate or Related Fund,
as applicable).

 

(c)                                  The Company Parties shall cause Reorganized
Monitronics to be redomiciled as a Delaware corporation, pursuant to a statutory
conversion or otherwise, on the Plan Effective Date (or prior to the Plan
Effective Date if mutually agreed by the Debtors and the Requisite Commitment
Parties) prior to the issuance of the New Common Stock.

 

5.                                      Covenants of the Commitment Parties. 
Each of the Commitment Parties hereby agrees, severally and not jointly, with
the Debtors that it shall use its commercially

 

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reasonable efforts to satisfy or cause to be satisfied all the conditions
precedent applicable to such Commitment Party set forth in Section 6.2 hereof;
provided, however, that nothing contained in this Section 5 shall obligate the
Commitment Parties to waive any right or condition under this Agreement.

 

6.                                      Conditions to Closing.

 

6.1                               Conditions Precedent to Obligations of the
Commitment Parties.  The obligations of the Backstop Commitment Parties to
exercise their Required Rights pursuant to their respective Primary Commitments
and to purchase Backstop Shares pursuant to their respective Backstop
Commitments, and the obligations of the Equity Commitment Parties to exchange
their Contributed Term Loans for Equity Commitment Shares are, in each case,
subject to the satisfaction (or waiver by the Requisite Commitment Parties) of
each of the following conditions prior to or on the Plan Effective Date:

 

(a)                                 Restructuring Support Agreement.  The
Restructuring Support Agreement shall not have been terminated.

 

(b)                                 Plan.  The Plan, as confirmed by the
Bankruptcy Court, shall be consistent in all material respects with the
Restructuring Support Agreement and otherwise reasonably acceptable to the
Requisite Commitment Parties.

 

(c)                                  Disclosure Statement.  The Disclosure
Statement shall be consistent in all material respects with the Restructuring
Support Agreement and otherwise reasonably acceptable to the Requisite
Commitment Parties.

 

(d)                                 Disclosure Statement Order.  The Bankruptcy
Court shall have entered the Disclosure Statement Order, the Disclosure
Statement Order shall be in form and substance reasonably acceptable to the
Requisite Commitment Parties, and the Disclosure Statement Order shall be a
Final Order.

 

(e)                                  Agreement Order.  The Bankruptcy Court
shall have entered the Agreement Order, the Agreement Order shall be consistent
with this Agreement and otherwise be in form and substance reasonably acceptable
to the Requisite Commitment Parties, and the Agreement Order shall be a Final
Order.

 

(f)                                   Confirmation Order.  The Bankruptcy Court
shall have entered the Confirmation Order, the Confirmation Order shall be in
form and substance consistent with this Agreement, the Restructuring Support
Agreement and the Plan and otherwise reasonably acceptable to the Requisite
Commitment Parties, and the Confirmation Order shall be a Final Order.

 

(g)                                  Conditions to Confirmation.  The conditions
to confirmation of the Plan and the conditions to the Plan Effective Date set
forth in the Plan shall have been satisfied (or waived with the prior written
consent of the Requisite Commitment Parties) in accordance with the Plan, and
the Plan Effective Date shall have occurred or shall occur simultaneously with
the Closing.

 

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(h)                                 Rights Offering.  All conditions to
consummation of the Rights Offering set forth in the Rights Offering Procedures
shall have been satisfied and the Rights Offering shall have been conducted and
consummated in accordance with the Plan, the Rights Offering Procedures and this
Agreement.

 

(i)                                     Definitive Documents.  All Definitive
Documents (including the Governance Documents, the Registration Rights
Agreement, and all documents relating to the Exit Facilities) shall have been
duly approved and adopted and, as applicable, duly executed and delivered by the
parties thereto, and such Definitive Documents shall be materially consistent
with the terms set forth in this Agreement and the Restructuring Support
Agreement and otherwise reasonably acceptable to the Requisite Commitment
Parties and shall  be in full force and effect.

 

(j)                                    No Injunctions or Restraints;
Illegality.  No temporary restraining order, preliminary or permanent
injunction, judgment or other Order preventing the consummation of the
transactions contemplated by this Agreement or any of the other Contemplated
Transactions shall have been entered, issued, rendered or made, nor shall any
Proceeding seeking any of the foregoing be commenced, pending or threatened; nor
shall there be any Law promulgated, enacted, entered, enforced or deemed
applicable to the Commitment Parties or the Debtors which prevents, prohibits or
otherwise makes illegal the consummation of the transactions contemplated by
this Agreement or any of the other Contemplated Transactions.

 

(k)                                 Notices and Consents.  All governmental and
third party notifications, filings, waivers, authorizations and Consents
necessary or required for the consummation of the transactions contemplated by
this Agreement or any of the other Contemplated Transactions, if any, shall have
been made or received and shall be in full force and effect.

 

(l)                                     Representations and Warranties. 
(i) Each of the representations and warranties of the Debtors in this Agreement,
the Backstop Escrow Agreement and the Restructuring Support Agreement, and if
the Non-Ascent Restructuring Toggle has not occurred, each of the
representations of Ascent in the Restructuring Support Agreement,  shall be true
and correct in all material respects (other than those representations and
warranties that are qualified by “materiality” or “Material Adverse Effect”,
which shall be true and correct in all respects) at and as of the Execution Date
(or the date of the Backstop Escrow Agreement or the Restructuring Support
Agreement) (except for representations and warranties expressly made as of a
specified date, which shall be true and correct only as of the specified date)
and (ii) each of (A) the representations and warranties of the Debtors in
Sections 2.1, 2.2(a), 2.4 and 2.5 hereof shall be true and correct in all
material respects (other than those representations and warranties that are
qualified by “materiality” or “Material Adverse Effect”, which shall be true and
correct in all respects) and (B) the other representations and warranties of the
Debtors in this Agreement, the Backstop Escrow Agreement and the Restructuring
Support Agreement, and if the Non-Ascent Restructuring Toggle has not occurred,
the representations of Ascent in the Restructuring Support Agreement, shall be
true and correct in all respects (without regard for any “materiality” or
“Material Adverse Effect” qualifiers set forth therein) except where the failure
of such representations and warranties referred to in this clause (B) to be so
true and correct would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, in each case of clauses (A) and (B),
at and as of the Plan Effective Date as if made at and as of the

 

30

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Plan Effective Date (except for representations and warranties expressly made as
of a specified date, which shall be true and correct only as of the specified
date).

 

(m)                             Covenants.  Each of the Debtors shall have
complied in all material respects with all covenants in this Agreement, the
Backstop Escrow Agreement and the Restructuring Support Agreement and, if the
Non-Ascent Restructuring Toggle has not occurred, Ascent shall have complied in
all material respects with all covenants in the Restructuring Support Agreement.

 

(n)                                 Transaction Expenses.  The Debtors shall
have paid all Transaction Expenses that have accrued and been invoiced in
accordance with Section 1.7 and remain unpaid as of the Plan Effective Date in
accordance with the terms of this Agreement, and no Transaction Expenses shall
be required to be repaid or otherwise disgorged to the Debtors or any other
Person.

 

(o)                                 Material Adverse Effect.  Since March 31,
2019, there shall not have occurred any event, change, effect, occurrence,
development, circumstance or change of fact that has had, or would reasonably be
expected to have, a Material Adverse Effect.

 

(p)                                 Purchase Notices.  Each of the Backstop
Commitment Parties shall have received a Backstop Purchase Notice in accordance
with Section 1.1(c) hereof, certifying as to the number of Backstop Commitment
Shares to be purchased by such Backstop Commitment Party, and the Backstop
Commitment Share Purchase Price therefor, pursuant to Section 1.3(a) hereof, and
each of the Equity Commitment Parties shall have received an Equity Commitment
Purchase Notice in accordance with Section 1.1(d) hereof, certifying as to the
number of Equity Commitment Shares to be purchased by such Equity Commitment
Party, and the Equity Commitment Share Purchase Price therefor.

 

(q)                                 Net Cash Amount.  If a Non-Ascent
Restructuring Toggle has not occurred, Ascent shall have delivered or shall
cause to be delivered the Net Cash Certificate to Monitronics, the Subscription
Agent and each of the Commitment Parties in accordance with
Section 1.1(b) hereof.

 

(r)                                    No Registration; Compliance with
Securities Laws.  No Proceeding shall be pending or threatened by any
Governmental Body or other Person that alleges that (i) any of the Specified
Issuances is not exempt from the registration requirements of Section 5 of the
Securities Act or (ii) the offer and sale of shares in the Ascent Share
Distribution does not comply with the registration requirements of Section 5 of
the Securities Act; provided that clause (ii) shall not apply if the Non-Ascent
Restructuring Toggle has occurred.

 

(s)                                   Officer’s Certificate.  The Commitment
Parties shall have received on and as of the Plan Effective Date (i) a
certificate of the chief financial officer or chief executive officer of
Monitronics confirming that the conditions set forth in Sections 6.1(l),
6.1(m) and 6.1(o) hereof have been satisfied and (ii) if a Non-Ascent
Restructuring Toggle has not occurred,  a certificate of the chief financial
officer or chief executive officer of Ascent confirming that, solely with
respect to Ascent,  the conditions set forth in Sections 6.1(l), 6.1(m) and
6.1(o) hereof have been satisfied.

 

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(t)                                    Exit Facilities.  The Debtors shall have
entered into and consummated the transactions contemplated by the Exit
Facilities and the Exit Facility Documentation shall contain terms and
conditions materially consistent with the terms and conditions set forth in
Exhibits C and D attached to the Restructuring Support Agreement and shall
otherwise be in form and substance reasonably satisfactory to the Requisite
Commitment Parties.

 

(u)                                 Assumption of Contracts.  The assumption or
rejection and/or amendment of certain material contracts and the liability of
the Debtors with respect to such contracts shall be reasonably satisfactory to
the Requisite Commitment Parties.

 

(v)                                 Backstop Escrow Agreement.  The Debtors
shall have executed and delivered to the Backstop Commitment Parties the
Backstop Escrow Agreement and each certificate, agreement or document (other
than this Agreement) that any Debtor is required to execute and/or deliver
pursuant to the terms of this Agreement, the Backstop Escrow Agreement or the
Restructuring Support Agreement, and the Backstop Escrow Agreement and each such
certificate, agreement or document shall be materially consistent with this
Agreement and the Restructuring Support Agreement (including the Term Sheets)
and otherwise reasonably acceptable to each of the Backstop Commitment Parties.

 

(w)                               Merger Conditions.  Either (i) the Non-Ascent
Restructuring Toggle shall have occurred or (ii) if the Non-Ascent Restructuring
Toggle shall not have occurred, then either (A) the Merger shall have been
consummated or (B) all closing conditions set forth in the Merger Agreement
(other than conditions that by their nature are to be satisfied at closing)
shall have been satisfied or waived in accordance with the Merger Agreement.

 

(x)                                 Interest on Contributed Term Loans.  With
respect to the Equity Commitment Parties, such parties shall have received
payment of all accrued and unpaid interest, at the applicable rate, on such
Contributed Term Loans as of the Plan Effective Date in full in cash pursuant to
the Plan.

 

6.2                               Conditions Precedent to Obligations of
Monitronics.  The obligations of Monitronics to issue and sell the Backstop
Shares to each of the Backstop Commitment Parties pursuant to
Section 1.3(d) hereof and issue the Equity Commitment Shares in exchange for the
Contributed Term Loans of the Equity Commitment Parties are subject to the
following conditions precedent, each of which may be waived in writing by
Monitronics:

 

(a)                                 Confirmation Order.  The Bankruptcy Court
shall have entered the Confirmation Order and the Confirmation Order shall be a
Final Order.

 

(b)                                 Agreement Order.  The Bankruptcy Court shall
have entered the Agreement Order and the Agreement Order shall be a Final Order.

 

(c)                                  Conditions to Confirmation.  The conditions
to confirmation of the Plan and the conditions to the Plan Effective Date set
forth in the Plan shall have been satisfied or waived in accordance with the
Plan, and the Plan Effective Date shall have occurred or shall occur
simultaneously with the Closing.

 

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(d)                                 Rights Offering.  The Rights Offering shall
have been consummated or shall be consummated simultaneously with the Closing in
accordance with its terms and the Rights Offering Procedures.

 

(e)                                  No Injunctions or Restraints; Illegality. 
No temporary restraining order, preliminary or permanent injunction, judgment or
other Order restraining, enjoining or otherwise prohibiting any of the
Contemplated Transactions shall have been entered, issued, rendered or made, nor
shall any Proceeding seeking any of the foregoing be commenced, pending or
threatened in writing; nor shall there be any Law in effect which makes
consummation of the Contemplated Transactions illegal or otherwise prohibits or
prevents the consummation of the Contemplated Transactions.

 

(f)                                   Representations and Warranties and
Covenants.  (i) Each of the representations and warranties of each of the
Commitment Parties in this Agreement shall be true and correct in all material
respects at and as of the Execution Date and as of the Plan Effective Date as if
made at and as of the Plan Effective Date (except for representations and
warranties made as of a specified date, which shall be true and correct only as
of the specified date) and (ii) each of the Commitment Parties shall have
complied in all material respects with all covenants in this Agreement, except,
in each case, to the extent that Non-Defaulting Backstop Commitment Parties
purchase any Default Shares as a result of any breach of representations,
warranties or covenants by a Defaulting Backstop Commitment Party pursuant to
Section 1.3(c) hereof.

 

7.                                      Termination.

 

(a)                                 Unless earlier terminated in accordance with
the terms of this Agreement, this Agreement and the Commitments contemplated
hereby shall terminate automatically and immediately, without a need for any
further action on the part of (or notice provided to) any Person, upon the
earliest to occur of:

 

(i)                                     September 20, 2019 (the “Termination
Date”);

 

(ii)                                  the termination of the Restructuring
Support Agreement; and

 

(iii)                               the Bankruptcy Court enters an order
converting the Chapter 11 Cases to cases under Chapter 7 of the Bankruptcy Code,
appointing a trustee or custodian for any of the Debtors or dismissing the
Chapter 11 Cases.

 

(b)                                 This Agreement and the Commitments
contemplated hereby may be terminated and the transactions contemplated hereby
may be abandoned at any time by the Requisite Commitment Parties upon written
notice to the Company Parties upon or at any time after the existence or
occurrence of any of the following:

 

(i)                                     if the Company does not file with the
Bankruptcy Court (x) an executed copy of this Agreement, together with all of
the exhibits and schedules hereto  and (y) the Agreement Motion within one
(1) calendar day of the Petition Date;

 

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(ii)                                  a material breach by any Debtor of any of
its other obligations under this Agreement which (x) is not capable of being
cured prior to the Termination Date or (y) if curable, remains uncured for five
(5) Business Days following written notice from the Commitment Parties or their
counsel;

 

(iii)                               if a court of competent jurisdiction or
other Governmental Body shall have issued  or entered a final non-appealable
Order permanently restraining, enjoining or otherwise prohibiting any of the
Contemplated Transactions, or any Law shall be in effect that makes consummation
of the Contemplated Transactions illegal or otherwise prohibits or prevents the
consummation of the Contemplated Transactions;

 

(iv)                              any of the conditions set forth in Section 6.1
hereof become incapable of fulfillment prior to the Termination Date (other than
through the failure of the Backstop Commitment Parties to comply with their
obligations under this Agreement or the Restructuring Support Agreement); or

 

(v)                                 the occurrence of any of the termination
events set forth in Section 15.01 the Restructuring Support Agreement (the
“Noteholder Termination Events”) without giving effect to any waivers of a
Noteholder Termination Event provided under the Restructuring Support Agreement
(all such Noteholder Termination Events being incorporated herein by reference
with full force and effect as if fully set forth herein by applying the
provisions thereof mutatis mutandis (such that all changes and modifications to
the defined terms and other terminology used in the Noteholder Termination
Events shall be made so that the Noteholder Termination Events can be applied in
a logical manner in this Agreement)).

 

(c)                                  This Agreement and the Commitments
contemplated hereby may be terminated at any time by written consent of the
Debtors and the Requisite Commitment Parties.

 

(d)                                 Except as otherwise provided herein, upon
any termination of this Agreement in accordance with this Section 7, this
Agreement and the Commitments hereunder shall forthwith become void and of no
further force and effect and there shall be no further obligations or
liabilities hereunder on the part of any of the Parties; provided, however,
that, (i) the obligations of the Debtors to pay or reimburse, as the case may
be, the Transaction Expenses pursuant to and in accordance with Section 1.7 and
to satisfy their indemnification obligations pursuant to and in accordance with
Section 8 shall survive the termination of this Agreement and shall remain in
full force and effect, in each case, until such obligations have been satisfied
in full, (ii) the provisions set forth in this Section 7(d) and Sections 1.3,
1.4, 1.5, 10, 11, 12 and 13 hereof (and any defined terms used in any such
Sections) shall survive the termination of this Agreement in accordance with
their terms, and (iv) nothing in this Section 7(d) shall relieve any Party from
liability for any willful or intentional breach of this Agreement prior to such
termination, which shall in each case expressly survive any such termination. 
For purposes of this Agreement, “willful or intentional breach” shall mean a
breach of this Agreement that is a consequence of an act undertaken by the
breaching party with the knowledge that the taking of such act would, or would
reasonably be expected to, cause a breach of this Agreement.

 

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(e)                                  Each Debtor hereby acknowledges and agrees
and shall not dispute that after the Petition Date, the giving of notice of
termination by the Commitment Parties pursuant to this Agreement shall not be a
violation of the automatic stay of section 362 of the Bankruptcy Code (and each
Debtor hereby waives, to the greatest extent possible, the applicability of the
automatic stay to the giving of such notice).

 

(f)                                   In the event of a termination of this
Agreement in accordance with this Section 7 at a time after all or any portion
of the purchase price for any Backstop Shares has been deposited with the Escrow
Agent by any of the Backstop Commitment Parties, the Backstop Commitment Parties
that have deposited such funds shall be entitled to the return of such funds. 
In such a case, the Backstop Commitment Parties and the Debtors hereby agree to
execute and deliver to the Escrow Agent, promptly after the effective date of
any such termination (but in any event no later than two (2) Business Days after
any such effective date), a letter instructing the Escrow Agent to pay to each
applicable Backstop Commitment Party, by wire transfer of immediately available
funds to an account designated by such Backstop Commitment Party, the funds that
such Backstop Commitment Party is entitled to receive pursuant to this
Section 7(f).

 

8.                                      Indemnification.

 

(a)                                 The Debtors hereby agree, jointly and
severally, to indemnify and hold harmless each of the Commitment Parties and
each of their respective Affiliates, stockholders, equity holders, members,
partners, managers, officers, directors, employees, attorneys, accountants,
financial advisors, consultants, agents, advisors and controlling persons (each,
in such capacity, an “Indemnified Party”) from and against any and all losses,
claims, damages, liabilities and expenses, joint or several, imposed on,
sustained, incurred or suffered by, or asserted against, any Indemnified Party
as a result of or arising out of or related to this Agreement, the Commitments,
the Plan, the Rights Offering and/or any of the transactions contemplated by
this Agreement, the Commitments, or the Rights Offering, or any breach by any
Debtor of any of its representations, warranties and/or covenants set forth in
this Agreement, or any claim, litigation, investigation or Proceeding relating
to any of the foregoing, regardless of whether any such Indemnified Party is a
party thereto, and to reimburse each such Indemnified Party for the reasonable
and documented legal or other out-of-pocket costs and expenses as they are
incurred in connection with investigating, monitoring, responding to or
defending any of the foregoing; provided, that the foregoing indemnification
will not, as to any Indemnified Party, apply to (i) losses, claims, damages,
liabilities or expenses to the extent that they result from a material breach by
the Commitment Parties of the Commitment Parties’ obligations under this
Agreement, or any act by the Commitment Parties of bad faith, gross negligence
or willful misconduct, each as determined by a final, non-appealable decision by
a court of competent jurisdiction, and (ii) any punitive, exemplary or special
damages unless such Indemnified Party is required to pay such damages to a third
party, as determined by a final, non-appealable decision by a court of competent
jurisdiction.  The terms set forth in this Section 8 shall survive termination
of this Agreement and shall remain in full force and effect regardless of
whether the transactions contemplated by this Agreement or any of the other
Contemplated Transactions are consummated.  The indemnity and reimbursement
obligations of the Debtors under this Section 8 are in addition to, and do not
limit, the Debtors’ obligations under Sections 1.4, and 1.5 hereof.

 

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(b)                                 Promptly after receipt by an Indemnified
Party of notice of the commencement of any claim, litigation, investigation,
Proceeding or other action with respect to which such Indemnified Party may be
entitled to indemnification hereunder (“Actions”), such Indemnified Party will,
if a claim is to be made hereunder against the Debtors in respect thereof,
notify the Debtors in writing of the commencement thereof; provided, that
(i) the omission so to notify the Debtors will not relieve the Debtors from any
liability that they may have hereunder except to the extent they have been
actually and materially prejudiced by such failure and (ii) the omission so to
notify the Debtors will not relieve the Debtors from any liability that they may
have to an Indemnified Party otherwise than on account of this Section 8.  In
case any such Actions are brought against any Indemnified Party and such
Indemnified Party notifies the Debtors of the commencement thereof, the Debtors
will be entitled to participate in such Actions, and, to the extent that Debtors
elect by written notice delivered to such Indemnified Party, to assume the
defense thereof, with counsel satisfactory to such Indemnified Party, provided,
that (i) if the defendants in any such Actions include both such Indemnified
Party and the Debtors and such Indemnified Party shall have concluded that there
may be legal defenses available to it that are different from or additional to
those available to the Debtors, such Indemnified Party shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such Actions on behalf of such Indemnified Party
and (ii) if multiple Indemnified Parties have different legal defenses, each one
shall be entitled to separate counsel at the expense of the Debtors.  Following
the date of receipt of such indemnification commitment from the Debtors and
notice from the Debtors to such Indemnified Party of its election so to assume
the defense of such Actions and approval by such Indemnified Party of counsel,
the Debtors shall not be liable to such Indemnified Party for expenses incurred
by such Indemnified Party in connection with the defense thereof after such date
(other than reasonable costs of investigation and monitoring) unless (x) such
Indemnified Party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the immediately
preceding sentence or (y) the Debtors shall have authorized in writing the
employment of counsel for such Indemnified Party.

 

(c)                                  The Debtors shall not, without the prior
written consent of an Indemnified Party, effect any settlement of any pending or
threatened Actions in respect of which indemnity has been sought hereunder by
such Indemnified Party unless (i) such settlement includes an unconditional
release of such Indemnified Party in form and substance satisfactory to such
Indemnified Party from all liability on the claims that are the subject matter
of such Actions and (ii) does not include any statement as to or any admission
of fault, culpability or a failure to act by or on behalf of any Indemnified
Party.

 

9.                                      Survival of Representations and
Warranties.  Notwithstanding any investigation at any time made by or on behalf
of any party hereto with respect to, or any knowledge acquired (or capable of
being acquired) about, the accuracy or inaccuracy of or compliance with, any
representation or warranty made by or on behalf of any party hereto, all
representations and warranties contained in this Agreement and in the
certificate delivered pursuant to Section 6.1(u) hereof shall survive the
execution, delivery and performance of this Agreement.

 

10.                               Amendments and Waivers.  Any term of this
Agreement may be amended or modified and the compliance with any term of this
Agreement may be waived (either generally

 

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or in a particular instance and either retroactively or prospectively) only if
such amendment, modification or waiver is signed, in the case of an amendment or
modification, by the Requisite Commitment Parties and the Debtors, or in the
case of a waiver, by the party waiving compliance; provided, however, that
(i) the Backstop Commitment Schedule may be amended in accordance with the terms
of Sections 1.3(e) and 12.1 hereof; (ii) the Equity Commitment Schedule may be
amended in accordance with the terms of Section 12.1 hereof; (iii) any amendment
or modification to this Agreement that would have the effect of changing the
Backstop Commitment Percentage of any Non-Defaulting Backstop Commitment Party
shall require the prior written consent of such Non-Defaulting Backstop
Commitment Party unless otherwise expressly contemplated by this Agreement;
(iv) any amendment or modification to this Agreement that would have the effect
of changing the Equity Commitment Percentage of any Equity Commitment Party
shall require the prior written consent of such Equity Commitment Party unless
otherwise expressly contemplated by this Agreement; (v) any amendment or
modification to (x) the definition of “Exercise Price” or (y) the allocation of
the Put Option Premium Shares among the Commitment Parties as set forth in
Section 1.6 shall require the prior written consent of each Backstop Commitment
Party adversely affected thereby; (vi) any amendment, modification or waiver to
this Agreement that would materially adversely affect the rights or increase the
obligations of any Backstop Commitment Party under this Agreement in a manner
that is disproportionate in any material respect to the comparable rights and
obligations of the Requisite Commitment Parties under this Agreement shall
require the prior written consent of such Backstop Commitment Party; and
(vii) any amendment, modification or waiver to this Agreement that would
materially adversely affect the rights or increase the obligations of any Equity
Commitment Party under this Agreement in a manner that is disproportionate in
any material respect to the comparable rights and obligations of the Requisite
Commitment Parties under this Agreement shall require the prior written consent
of such Equity Commitment Party.  No delay on the part of any party in
exercising any right, power or privilege pursuant to this Agreement will operate
as a waiver thereof, nor will any waiver on the part of any party of any right,
power or privilege pursuant to this Agreement, or any single or partial exercise
of any right, power or privilege pursuant to this Agreement, preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege pursuant to this Agreement.  The rights and remedies provided pursuant
to this Agreement are cumulative and are not exclusive of any rights or remedies
which any party otherwise may have at law or in equity.

 

11.                               Notices, etc.  Except as otherwise provided in
this Agreement, all notices, demands and other communications hereunder shall be
in writing or by written telecommunication (including by facsimile), and shall
be deemed to have been duly given or provided if delivered personally or if
mailed by certified mail, return receipt requested, postage prepaid, or if sent
by overnight courier, or sent by written telecommunication (including by
facsimile transmission), as follows:

 

(a)                                 if to a Commitment Party, to the mailing
address, facsimile number or e-mail address set forth on the Backstop Commitment
Schedule or the Equity Commitment Schedule, as applicable, or to such other
mailing address, facsimile number or e-mail address as such Commitment Party
shall have furnished to the Debtors in writing,

 

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with a copy to:

 

Stroock & Stroock & Lavan LLP

180 Maiden Lane

New York, NY  10038

 

Attention:                                         Kristopher M. Hansen, Esq.

Sayan Bhattacharyya, Esq.

-and-

Samantha L. Martin, Esq.

Fax:                                                                       (212)
806-6006

Email:                                                           
khansen@stroock.com

                                                                                               
sbhattacharyya@stroock.com

                                                                                               
smartin@stroock.com

 

(b)                                 If to the Debtors at:

 

Monitronics International, Inc.

1990 Wittington Place

Farmers Branch, TX 75234

 

Attention:                                         William E. Niles

-and-

Fred Graffam

 

Fax:                      

Email:                                                           
wniles@ascentcapitalgroupinc.com

                                                                                               
fgraffam@brinkshome.com

 

with a copy to:

 

Latham & Watkins LLP

885 Third Avenue

New York, New York 10022

 

Attention:                                         David A. Hammerman, Esq.

-and-

David J. Miller, Esq.

Fax:                      

Email:                                                           
David.Hammerman@lw.com

                                                                                               
David.Miller@lw.com

 

(c)                                  If to Ascent at:

 

Ascent Capital Group, Inc.

5251 DTC Parkway, Suite 1000

Greenwood Village, Colorado 80111

 

Attention:                                         William E. Niles

 

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Fax:

 

Email:

wniles@ascentcapitalgroupinc.com

 

fgraffam@brinkshome.com

with a copy to:

 

 

 

Baker Botts L.L.P.

30 Rockefeller Plaza

New York, New York 10112

 

 

Attention:

Renee L. Wilm, Esq.

 

-and-

 

Emanuel. Grillo, Esq.

 

Any such notice, demand or other communication shall be effective (i) if
delivered personally, when received, (ii) if sent by overnight courier, when
receipted for, (iii) if mailed, three (3) days after being mailed as described
above, and (iv) if sent by written telecommunication (including by facsimile
transmission), when dispatched.

 

12.                               Miscellaneous.

 

12.1                        Assignments.  This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.  Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, delegated or
transferred, in whole or in part, by any of the parties (whether by operation of
Law or otherwise) without the prior written consent of the other parties. 
Notwithstanding the immediately preceding sentence, any Commitment Party’s
rights, obligations or interests hereunder may be freely assigned, delegated or
transferred, in whole or in part, by such Commitment Party, with prior written
notice given to (but not the consent of) the Debtors and the Commitment Party
Professionals, to (a) any other Commitment Party, (b) any controlled Affiliate
of a Commitment Party (other than a portfolio company of such Commitment Party
or any of its Affiliates or Related Funds) or (c) any Related Fund of a
Commitment Party; provided, that any such assignee expressly assumes the
obligations of the assigning Commitment Party hereunder and agrees in writing
prior to such assignment to be fully bound as a Commitment Party by the terms of
this Agreement in the same manner and to the same extent as the assigning
Commitment Party with respect to such rights, obligations and interests;
provided, further, that unless otherwise agreed in any instance by the Debtors
and the Requisite Commitment Parties, no such assignment, delegation or transfer
by a Commitment Party to any controlled Affiliate or Related Funds of such
Commitment Party will relieve the assigning Commitment Party of its obligations
hereunder if such controlled Affiliate or Related Fund fails to perform such
obligations.  Following any assignment, delegation or transfer described in the
immediately preceding sentence, the Backstop Commitment Schedule or the Equity
Commitment Schedule, as applicable, shall be updated by the Debtors (in
consultation with the assigning Commitment Party and the assignee) solely to
reflect the name and address of the applicable assignee or assignees and the
Commitment Percentage that shall apply to such assignee or assignees, and any
changes to the Commitment Percentage applicable to the assigning Commitment
Party.  Any

 

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update to the Backstop Commitment Schedule or the Equity Commitment Schedule
described in the immediately preceding sentence shall not be deemed an amendment
to this Agreement.  Other than as set forth in this Section 12.1 and in
Section 1.2(b), no Commitment Party shall be permitted to assign, delegate or
transfer all or any portion of its Commitment without the prior written consent
of the Company and the Requisite Commitment Parties, which consent shall not be
unreasonably withheld, conditioned or delayed.

 

12.2                        Severability.  If any provision of this Agreement,
or the application of any such provision to any person or circumstance, shall be
held invalid or unenforceable in whole or in part, such invalidity or
unenforceability shall attach only to such provision or part thereof and the
remaining part of such provision and this Agreement shall continue in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party hereto.  Upon any such determination of invalidity, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a reasonably acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.

 

12.3                        Entire Agreement.  Except as expressly set forth
herein, this Agreement and the Restructuring Support Agreement (including the
Term Sheets) constitute the entire understanding among the parties hereto with
respect to the subject matter hereof and replaces and supersedes all prior
agreements and understandings, both written and oral, among the parties hereto
with respect to the subject matter hereof.

 

12.4                        Counterparts.  This Agreement may be executed in any
number of counterparts, each of which will be an original, and all of which,
when taken together, will constitute one agreement.  Delivery of an executed
counterpart of this Agreement by facsimile or portable document format (PDF)
will be effective as delivery of a manually executed counterpart of this
Agreement.

 

12.5                        Governing Law.  THIS AGREEMENT SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES HERETO SHALL BE
GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF THAT WOULD RESULT IN APPLICATION OF THE LAW
OF ANY OTHER JURISDICTION.

 

12.6                        Submission to Jurisdiction.  Each party to this
Agreement hereby (a) consents to submit itself to the personal jurisdiction of
the federal court of the Southern District of New York or any state court
located in New York County, State of New York in the event any dispute arises
out of or relates to this Agreement or any of the transactions contemplated by
this Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
including, without limitation, a motion to dismiss on the grounds of forum non
conveniens, and (c) agrees that it will not bring any action arising out of or
relating to this Agreement or any of the transactions contemplated by this
Agreement in any court other than the federal court of the Southern District of
New York or any state court located in New York County, State of New York;
provided,

 

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however, that during the pendency of the Chapter 11 Cases, all such actions
shall be brought in the Bankruptcy Court.

 

12.7                        Waiver of Trial by Jury; Waiver of Certain Damages. 
EACH PARTY HERETO HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY SUCH RIGHTS OR
OBLIGATIONS.  Except as prohibited by Law, each party hereto hereby waives any
right which it may have to claim or recover in any action or claim referred to
in the immediately preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages unless such party is required to pay such damages to a third party. 
Each of the Debtors (a) certifies that none of the Commitment Parties nor any
Representative of any of the Commitment Parties has represented, expressly or
otherwise, that the Commitment Parties would not, in the event of litigation,
seek to enforce the foregoing waivers and (b) acknowledges that, in entering
into this Agreement, the Commitment Parties are relying upon, among other
things, the waivers and certifications contained in this Section 12.7.

 

12.8                        Further Assurances.  From time to time after the
Execution Date, the parties hereto will execute, acknowledge and deliver to the
other parties hereto such other documents, instruments and certificates, and
will take such other actions, as any other party hereto may reasonably request
in order to consummate the transactions contemplated by this Agreement.

 

12.9                        Specific Performance.  The Company Parties and the
Commitment Parties acknowledge and agree that (a) irreparable damage would occur
in the event that any of the provisions of this Agreement are not performed in
accordance with their specific terms or are otherwise breached, and (b) remedies
at law would not be adequate to compensate the non-breaching party. 
Accordingly, the Company Parties and the Commitment Parties agree that each of
them shall have the right, in addition to any other rights and remedies existing
in its favor, to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce its rights and obligations hereunder
not only by an action or actions for damages but also by an action or actions
for specific performance, injunctive and/or other equitable relief.  The right
to equitable relief, including specific performance or injunctive relief, shall
exist notwithstanding, and shall not be limited by, any other provision of this
Agreement.  Each of the Company Parties and the Commitment Parties hereby waives
any defense that a remedy at law is adequate and any requirement to post bond or
other security in connection with actions instituted for injunctive relief,
specific performance or other equitable remedies.

 

12.10                 Headings.  The headings in this Agreement are for
reference purposes only and will not in any way affect the meaning or
interpretation of this Agreement.

 

12.11                 Interpretation; Rules of Construction.  When a reference
is made in this Agreement to an Article, Section, Exhibit or Schedule, such
reference is to an Article or Section of, or Exhibit or Schedule to, this
Agreement unless otherwise indicated.  Unless the context of this Agreement
otherwise requires, (a) words of any gender include each other gender; (b) words
using the singular or plural number also include the plural or singular number,
respectively;

 

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(c) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer
to this entire Agreement; and (d) the words “include”, “includes” and
“including” when used herein shall be deemed in each case to be followed by the
words “without limitation”.  The parties hereto agree that they have been
represented by legal counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any regulation, holding, 
rule of construction or Law providing that ambiguities in an agreement or other
document shall be construed against the party drafting such agreement or
document.

 

12.12                 Several, Not Joint, Obligations.  The representations,
warranties, covenants and other obligations of the Commitment Parties under this
Agreement are, in all respects, several and not joint or joint and several, such
that no Commitment Party shall be liable or otherwise responsible for any
representations, warranties, covenants or other obligations of any other
Commitment Party, or any breach or violation thereof.

 

12.13                 Confidentiality and Publicity.  Unless otherwise required
by the Bankruptcy Court or applicable Law, the Company Parties shall  not,
without the prior written consent of such Commitment Party, disclose to any
Person (including for the avoidance of doubt, any other Commitment Party), other
than the Commitment Party Professionals and legal, accounting, financial and
other advisors to the Company Parties (who are under obligations of
confidentiality to the Company Parties with respect to such disclosure, and
whose compliance with such obligations the Company Parties shall be responsible
for), any of the information set forth on the Backstop Commitment Schedule or
the Equity Commitment Schedule with respect to any Commitment Party or the name
or the  principal amount or percentage of the Company Claims held by such
Commitment Party or any of its respective Affiliates or Related Funds).
Notwithstanding the foregoing, the Commitment Parties hereby consent to the
disclosure of the execution, terms and contents of this Agreement by the Company
Parties in the Definitive Documents or as otherwise required by Law; provided,
however, that (i) if any of the Company Parties determines that they are
required to attach a copy of this Agreement, any Joinder or Transfer Agreement
to any Definitive Documents or any other filing or similar document relating to
the transactions contemplated hereby, they will omit the Backstop Commitment
Schedule and the Equity Commitment Schedule and redact any reference to or
identifying information concerning a specific Commitment Party and such
Commitment Party’s holdings (including before any filing thereof with the SEC or
the Bankruptcy Court) and (ii) if disclosure of additional identifying
information of any Commitment Party is required by the Bankruptcy Court or
applicable Law, advance notice of the intent to disclose, if permitted by the
Bankruptcy Court or applicable Law, shall be given by the disclosing Party to
each Commitment Party (who shall have the right to seek a protective order prior
to disclosure). The Company Parties further agree that such information shall be
redacted from “closing sets” or other representations of the fully executed
Agreement, any Joinder or Transfer Agreement. Notwithstanding the foregoing, the
Company Parties will submit to the Commitment Party Professionals all press
releases, public filings, public announcements or other communications with any
news media, in each case, to be made by the Company Parties relating to this
Agreement or the transactions contemplated hereby and any amendments thereof at
least one (1) Business Day (it being understood that such period may be
shortened to the extent there are exigent circumstances that require such public
communication to be made to comply with the Bankruptcy Court or applicable law)
in advance of release and will take such counsel’s view with respect to such
communications into account.  Notwithstanding the foregoing, each Commitment
Party hereby

 

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agrees to permit disclosure in the Disclosure Statement and any filings by the
Company Parties with the Bankruptcy Court regarding the aggregate amounts of the
Backstop Commitments and the Equity Commitments, and the total principal amount
(and percentage of the total outstanding) of the Notes held by all Commitment
Parties on an aggregate basis.

 

12.14                 No Recourse Party.  Notwithstanding anything that may be
expressed or implied in this Agreement, and notwithstanding the fact that
certain of the Commitment Parties and the Debtors may be partnerships or limited
liability companies, the Debtors and the Commitment Parties covenant, agree and
acknowledge that no recourse under this Agreement shall be had against any
former, current or future directors, officers, agents, Affiliates, limited
partners, general partners (other than general partners, if any, of the
Commitment Parties, but not any other general partner of any other Person),
members, managers, employees, stockholders or equity holders of any Commitment
Party or the Debtors, or any former, current or future directors, officers,
agents, Affiliates, employees, general or limited partners, members, managers,
employees, stockholders or equity holders of any of the foregoing, as such (any
such Person, a “No Recourse Party”), whether by the enforcement of any
assessment or by any legal or equitable proceeding, or by virtue of any statute,
regulation or other applicable Law, it being expressly agreed and acknowledged
that no liability whatsoever shall attach to, be imposed on or otherwise be
incurred by any No Recourse Party for any obligation of any Commitment Party or
any Debtor under this Agreement for any claim based on, in respect of or by
reason of such obligations or their creation; provided, that nothing in this
Section 12.14 shall relieve the Debtors or the Commitment Parties of their
obligations under this Agreement.

 

12.15                 Settlement Discussions.  Nothing herein shall be deemed an
admission of any kind.  Pursuant to Federal Rule of Evidence 408 and any
applicable state rules of evidence, this Agreement and all negotiations relating
hereto shall not be admissible into evidence in any Proceeding other than a
Proceeding to enforce the terms of this Agreement.

 

12.16                 No Third Party Beneficiaries.  This Agreement is intended
to be solely for the benefit of the parties hereto and is not intended to confer
any benefits upon, or create any rights in favor of, any Person other than the
parties hereto and other than (a) the Indemnified Parties with respect to
Section 8 hereof and (b) the No Recourse Parties with respect to Section 12.14
hereof.

 

12.17                 Relationship Among Parties.  Notwithstanding anything to
the contrary herein, the duties and obligations of the Commitment Parties under
this Agreement shall be several, not joint. None of the Commitment Parties shall
have any fiduciary duty, any duty of trust or confidence in any form, or other
duties or responsibilities to each other, any Commitment Party, any Debtor, or
any of the Debtors’ respective creditors or other stakeholders, and there are no
commitments among or between the Commitment Parties, in each case except as
expressly set forth in this Agreement. No prior history, pattern or practice of
sharing confidence among or between any of the Commitment Parties and/or the
Debtors shall in any way affect or negate this understanding and agreement. The
Parties have no agreement, arrangement or understanding with respect to acting
together for the purpose of acquiring, holding, voting or disposing of any
securities of any of the Company Parties and do not constitute a “group” within
the meaning of Section 13(d)(3) of the Exchange Act or Rule 13d-5 promulgated
thereunder. For the avoidance of doubt: (a) each Commitment Party is entering
into this Agreement directly with the Debtors

 

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and not with any other Commitment Party, (b) no other Commitment Party shall
have any right to bring any action against any other Commitment Party with
respect to this Agreement (or any breach thereof) and (c) no Commitment Party
shall, nor shall any action taken by a Commitment Party pursuant to this
Agreement, be deemed to be acting in concert or as any group with any other
Commitment Party with respect to the obligations under this Agreement nor shall
this Agreement create a presumption that the Commitment Parties are in any way
acting as a group. All rights under this Agreement are separately granted to
each Commitment Party by the Debtors and vice versa, and the use of a single
document is for the convenience of the Debtors. The decision to commit to enter
into the transactions contemplated by this Agreement has been made
independently.

 

13.                               Definitions.

 

13.1                        Certain Defined Terms.  As used in this Agreement
the following terms have the following respective meanings:

 

Accredited Noteholder:  means each Rights Offering Participant who certifies in
the Questionnaire that it is an “accredited investor” (as defined in Regulation
D of the Securities Act), a non US person (as defined in Regulation S of the
Securities Act) and not participating on behalf or on account of a US person, or
a “qualified institutional buyer” (as defined in Rule 144A of the Securities
Act).

 

Actions:  has the meaning given to such term in Section 8(b) hereof.

 

Additional Backstop Note Party:  has the meaning given to such term in
Section 1.3(e) hereof.

 

Additional Backstop Notes:  has the meaning given to such term in
Section 1.3(e) hereof.

 

Additional Shares:  has the meaning given to such term in Section 1.3(c) hereof.

 

Adjusted Commitment Percentage:  means, with respect to any Non-Defaulting
Backstop Commitment Party that elects to purchase Backstop Commitment Shares not
purchased by Defaulting Backstop Commitment Parties, a fraction, expressed as a
percentage, the numerator of which is the Backstop Commitment, of such
Non-Defaulting Backstop Commitment Party and the denominator of which is the
aggregate Backstop Commitments of all Non-Defaulting Backstop Commitment Parties
that elect to purchase Backstop Commitment Shares not purchased by Defaulting
Backstop Commitment Parties.

 

Affiliate:  means, with respect to any Person, any other Person that directly or
indirectly controls, or is under common control with, or is controlled by, such
Person.  As used in this definition, “control” (including with its correlative
meanings, “controlled by” and “under common control with”) shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person (whether through ownership
of securities or partnership or other ownership interests, by Contract or
otherwise).

 

Affiliated Group:  has the meaning given to such term in Section 1504(a) of the
Code.

 

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Aggregate Rights Offering Amount:  has the meaning given to such term in the
recitals hereof.

 

Agreement:  has the meaning given to such term in the preamble hereof.

 

Agreement Motion:  has the meaning given to such term in Section 4.1 hereof.

 

Agreement Order:  has the meaning given to such term in Section 4.1 hereof.

 

Approvals:  means all approvals and authorizations that are required under the
Bankruptcy Code for the Debtors to take corporate action.

 

Ascent:  has the meaning given to such term in the preamble hereof.

 

Ascent Cash Amount:  has the meaning given to such term in the Restructuring
Support Agreement.

 

Ascent Share Distribution:  means the issuance of shares of New Common Stock on
the Plan Effective Date pursuant to the Merger, whereby the holders of Ascent’s
issued and outstanding shares of common stock (including equity compensation
award holders whose awards are accelerated and settled in such common stock)
shall receive, in the aggregate, approximately 5.82% of the total shares of New
Common Stock (assuming the Net Cash Amount is $23 million and the Ascent Share
Distribution shall be adjusted to reflect the actual Net Cash Amount of up to
$23 million at the Plan Effective Time by dividing the Net Cash Amount by
$395,111,580) to be issued and outstanding as of the Plan Effective Date,
subject to dilution by the Post-Emergence Incentive Plan with such shares to be
allocated pro rata among such Ascent stockholders and equity compensation award
holders pursuant to the Registration Statement.

 

Ascent Default Amount:  means an amount equal to the product of the Ascent
Default Shares and the Exercise Price.

 

Ascent Default Shares:  has the meaning given to such term in Section 1.3(a).

 

Ascent Stockholder Meeting:  means a meeting or meetings of the Ascent
stockholders of record entitled to vote upon the Merger.

 

Backstop Commitment:  means, with respect to any Backstop Commitment Party, the
commitment of such Backstop Commitment Party, subject to the terms and
conditions set forth in this Agreement, to purchase Backstop Commitment Shares
pursuant to, and on the terms set forth in, Section 1.3(a) hereof.

 

Backstop Commitment Percentage:  means, with respect to any Backstop Commitment
Party, the percentage set forth opposite the name of such Backstop Commitment
Party under the heading “Backstop Commitment Percentage” on the Backstop
Commitment Schedule, as such percentages may be modified from time to time in
accordance with the terms hereof.

 

Backstop Commitment Schedule:  means Schedule 1.1 hereto, as such schedule may
be modified from time to time in accordance with the terms hereof.

 

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Backstop Commitment Shares:  has the meaning given to such term in
Section 1.3(a) hereof.

 

Backstop Commitment Share Purchase Price:  has the meaning given to such term in
Section 1.1(c) hereof.

 

Backstop Default:  has the meaning given to such term in Section 1.3(c) hereof.

 

Backstop Commitment Party(ies):  has the meaning given to such term in the
preamble hereof.

 

Backstop Escrow Account:  has the meaning given to such term in
Section 1.3(b) hereof.

 

Backstop Escrow Agent:  has the meaning given to such term in
Section 1.3(b) hereof.

 

Backstop Escrow Agreement:  has the meaning given to such term in
Section 1.3(b) hereof.

 

Backstop Purchase Notice:  has the meaning given to such term in
Section 1.1(c) hereof.

 

Backstop Put Option Premium:  has the meaning given to such term in Section 1.6
hereof.

 

Backstop Put Option Premium Shares:  has the meaning given to such term in
Section 1.6 hereof.

 

Backstop Shares:  has the meaning given to such term in Section 1.3(c) hereof.

 

Bankruptcy Code:  has the meaning given to such term in the recitals hereof.

 

Bankruptcy Court:  has the meaning given to such term in the recitals hereof.

 

Bankruptcy Rules:  means the Federal Rules of Bankruptcy Procedure, as
promulgated by the United States Supreme Court under section 2075 of title 28 of
the United States Code, as amended from time to time, applicable to the Chapter
11 Cases and/or the transactions contemplated by this Agreement, and any Local
Rules of the Bankruptcy Court.

 

Benefit Plan(s):  has the meaning given to such term in Section 2.11(a) hereof.

 

Business Day:  means any day other than a Saturday, Sunday or other day on which
commercial banks in New York City, New York are authorized or required by Law to
be closed.

 

Cash Opt Out Noteholder:  has the meaning given to such term in the
Restructuring Support Agreement.

 

Chapter 11 Cases:  has the meaning given to such term in the recitals hereof.

 

Closing:  has the meaning given to such term in Section 1.5 hereof.

 

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Code:  has the meaning given to such term in Section 2.11 hereof.

 

Commitment Party(ies):  has the meaning given to such term in the preamble
hereof.

 

Commitment Party Professionals:  means Stroock, Houlihan Lokey, Inc. and Mike R
Meyers LLC, as advisors to the Commitment Parties.

 

Commitments:  means, collectively, the Primary Commitments, the Backstop
Commitments and the Equity Commitments.

 

Company Parties:  means, each of Ascent, the Debtors and Reorganized
Monitronics.

 

Company SEC Documents:  means all of the reports, schedules, forms, statements
and other documents (including exhibits and other information incorporated
therein) filed with the SEC by the Ascent and Monitronics.

 

Confirmation Order:  has the meaning given to such term in the Restructuring
Support Agreement.

 

Consent:  means any consent, waiver, approval, order or authorization of, or
registration, declaration or filing with or notice to, any Governmental Body or
other Person.

 

Consenting Creditors:  has the meaning given to such term in the Restructuring
Support Agreement.

 

Contemplated Transactions:  means the transactions contemplated by this
Agreement and the Restructuring Support Agreement (including the Term Sheets).

 

Contract:  means any agreement, contract or instrument, including any loan,
note, bond, mortgage, indenture, guarantee, deed of trust, license, franchise,
commitment, lease, franchise agreement, letter of intent, memorandum of
understanding or other obligation, and any amendments thereto, whether written
or oral, but excluding the Plan.

 

Contributed Term Loan Exchange Documentation:  has the meaning given to such
term in Section 1.1(d) hereof.

 

Contributed Term Loans:  has the meaning given to such term in
Section 1.4(a) hereof.

 

Debtor(s):  has the meaning given to such term in the preamble hereof.  For the
avoidance of doubt, Reorganized Monitronics shall be a Debtor for all purposes
under this Agreement.

 

Default Purchase Right:  has the meaning given to such term in
Section 1.3(c) hereof.

 

Default Shares:  has the meaning given to such term in Section 1.3(c) hereof.

 

Defaulting Backstop Commitment Party:  has the meaning given to such term in
Section 1.3(c) hereof.

 

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Definitive Documents:  has the meaning given to such term in the Restructuring
Support Agreement.

 

Deposit Deadline: has the meaning given to such term in Section 1.3(b) hereof.

 

DIP Documentation:  has the meaning given to such term in the Restructuring
Support Agreement.

 

DIP/Exit Facility Commitment:  has the meaning given to such term in the
recitals hereof.

 

DIP Facility:  has the meaning given to such term in the Restructuring Term
Sheet.

 

Disclosure Statement:  has the meaning given to such term in the Restructuring
Support Agreement.

 

Disclosure Statement Order:  has the meaning given to such term in the
Restructuring Support Agreement.

 

DTC:  has the meaning given to such term in Section 4.11 hereof.

 

Effective Date Pay Down:  has the meaning given to such term in the
Restructuring Term Sheet.

 

Encumbrance:  means any charge, claim, community property interest, condition,
equitable interest, lien, option, pledge, security interest, right of first
refusal or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income or exercise of any other attribute of ownership.

 

Equity Commitment:  means, with respect to any Equity Commitment Party, the
commitment of such Equity Commitment Party, subject to the terms and conditions
set forth in this Agreement, to exchange Contributed Term Loans for Equity
Commitment Shares pursuant to, and on the terms set forth in,
Section 1.4(a) hereof.

 

Equity Commitment Amount:  means $100.0 million.

 

Equity Commitment Party(ies):  has the meaning given to such term in the
preamble hereof.

 

Equity Commitment Percentage:  means, with respect to any Equity Commitment
Party, the percentage set forth opposite the name of such Equity Commitment
Party under the heading “Equity Commitment Percentage” on the Equity Commitment
Schedule, as such percentage may be modified from time to time in accordance
with the terms hereof.

 

Equity Commitment Purchase Notice:  has the meaning given to such term in
Section 1.1(d) hereof.

 

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Equity Commitment Schedule:  means Schedule 1.2 hereto, as such schedule may be
modified from time to time in accordance with the terms hereof.

 

Equity Commitment Shares:  means 25.31% of the total shares of New Common Stock
to be issued as of the Plan Effective Date, subject to dilution by the
Post-Emergence Incentive Plan.

 

Equity Commitment Share Purchase Price:  has the meaning given to such term in
Section 1.1(d) hereof.

 

Equity Put Option Premium:  has the meaning given to such term in Section 1.6
hereof.

 

Equity Put Option Premium Shares:  has the meaning given to such term in
Section 1.6 hereof.

 

Equity Securities:  means any common stock, other equity securities or voting
interests in Monitronics.

 

ERISA:  means the Employee Retirement Income Security Act of 1974, as amended.

 

ERISA Affiliate(s):  means any entity which is a member of any Company Parties
or its Subsidiaries’ controlled group, or under common control with any Company
Parties or its Subsidiaries, within the meaning of Section 414 of the Code or is
treated as a single employer with the foregoing under ERISA.

 

Exchange Act:  means the Securities Exchange Act of 1934, as amended.

 

Execution Date:  has the meaning given to such term in the preamble hereof.

 

Exercise Price:  means $17.56 per share of New Common Stock, which shall also be
the per-share purchase price at which the Rights Offering Shares are offered in
the Rights Offering.

 

Exit Facilities:  means the Exit Revolving Facility and the Exit Term Loan
Facility.

 

Exit Facility Documentation:  has the meaning given to such term in Section 4.8
hereof.

 

Exit Revolving Facility:  has the meaning given to such term in the
Restructuring Term Sheet.

 

Exit Term Loan Facility:  has the meaning given to such term in the
Restructuring Term Sheet.

 

Final Order:  means an Order issued by the Bankruptcy Court in the Chapter 11
Cases which (a) is in full force and effect, (b) is not stayed, and (c) is no
longer subject to review, reversal, modification or amendment, by appeal or writ
of certiorari or otherwise; provided, however, that the possibility that a
motion under Rule 50 or 60 of the Federal Rules of Civil Procedure, or any
analogous rule under the Federal Rules of Civil Procedure or Bankruptcy Rules,
may be filed relating to such Order shall not cause such Order not to be deemed
a Final Order.

 

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Financial Statements:  has the meaning given to such term in Section 2.14
hereof.

 

First Lien Term Lender:  has the meaning given to such term in the Restructuring
Support Agreement.

 

Forbearance Agreements:  means the Lender Forbearance Agreement and the
Noteholder Forbearance Agreement (each, as defined in the Restructuring Support
Agreement).

 

GAAP:  has the meaning given to such term in Section 2.14 hereof.

 

Governance Documents:  has the meaning given to such term in the Restructuring
Support Agreement.

 

Governance Term Sheet:  has the meaning given to such term in the recitals
hereof.

 

Governmental Body:  means any federal, national, supranational, foreign, state,
provincial, local, county, municipal or other government, any governmental,
regulatory or administrative authority, agency, department, bureau, board,
commission or official or any quasi-governmental or private body exercising any
regulatory, taxing, importing or other governmental or quasi-governmental
authority, or any court, tribunal, judicial or arbitral body.

 

Indemnified Party:  has the meaning given to such term in Section 8(a) hereof.

 

Initial Backstop Notes:  has the meaning given to such term in
Section 1.3(e) hereof.

 

Initial Transaction Expenses:  has the meaning given to such term in Section 1.7
hereof.

 

Investment Company Act:  has the meaning given to such term in Section 2.24
hereof.

 

IP Rights:  has the meaning given to such term in Section 2.8 hereof.

 

IRS:  means the Internal Revenue Service and any Governmental Body succeeding to
the functions thereof.

 

Knowledge of Monitronics:  means the actual knowledge, after reasonable inquiry
of their direct reports, of the chief executive officer, chief financial
officer, chief operating officer and general counsel of Monitronics (or of
Ascent, with respect to the applicable representations and warranties by Ascent
with respect to itself).  As used herein, “actual knowledge” means information
that is personally known by the listed individual(s).

 

Law:  means any federal, national, supranational, foreign, state, provincial,
local, county, municipal or similar statute, law, common law, writ, injunction,
decree, guideline, policy, ordinance, regulation, rule, code, Order,
constitution, treaty, requirement, judgment or judicial or administrative
doctrines enacted, promulgated, issued, enforced or entered by any Governmental
Body.

 

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Legal Proceeding:  means any legal, governmental, administrative, judicial or
regulatory investigations, audits, actions, suits, claims, arbitrations,
demands, demand letters, claims, notices of noncompliance or violations, or
proceedings.

 

Legend:  has the meaning given to such term in Section 4.10 hereof.

 

Material Adverse Effect:  means any event, change, effect, occurrence,
development, circumstance or change of fact occurring after the date hereof that
has had, or would reasonably be expected to have, a material adverse effect on
the business, results of operations, condition (financial or otherwise), assets
or liabilities of the Debtors (or, if the Non-Ascent Restructuring Toggle has
not occurred, the Company Parties), taken as a whole; provided, however, that
“Material Adverse Effect” shall not include any event, change, effect,
occurrence, development, circumstance or change of fact the occurrence of which
is expressly disclosed in the Company SEC Documents prior to the RSA Effective
Date, or any event, change, effect, occurrence, development, circumstance or
change of fact to the extent arising out of or resulting from (a) conditions or
effects that generally affect Persons engaged in the industries and markets in
which the Debtors or Company Parties, as applicable, operate, (b) general
economic conditions in the United States or globally, (c) national or
international political or social conditions, including the engagement by the
United States in hostilities, whether or not pursuant to the declaration of a
national emergency or war, or the occurrence of any military or terrorist attack
upon the U.S., or any of its territories, possessions, or diplomatic or consular
offices or upon any military installation, equipment or personnel of the U.S.,
(d) financial, banking, securities, credit or commodities markets, prevailing
interest rates, or general capital markets conditions in the United States or
globally, (e) changes in U.S. generally accepted accounting principles,
(f) changes in laws, rules, regulations, orders, or other binding directives
issued by any Governmental Body, (g) the taking of any action (including
consummation of the transactions contemplated hereby and thereby) expressly
contemplated by this Agreement and the Restructuring Support Agreement,
including the filing and pendency of the Chapter 11 Cases, (h) changes in the
market price or trading volume of the claims or equity or debt securities of the
Company Parties (but not the underlying facts giving rise to such changes unless
such facts are otherwise excluded pursuant to the clauses contained in this
definition), or (i) the departure of officers or directors of any of the Company
Parties not in contravention of the terms and conditions of the Definitive
Documents (but not the underlying facts giving rise to such departure unless
such facts are otherwise excluded pursuant to the clauses contained in this
definition), except in each of clauses (a), (b), (c) and (d) above, if any of
the Debtors or Company Parties, as the case may be, is disproportionately
affected thereby relative to other Persons engaged in the industry in which such
Debtor or Company Party operates.

 

Material Contracts:  means (a) all “plans of acquisition, reorganization,
arrangement, liquidation or succession” and “material contracts” (as such terms
are defined in Items 601(b)(2) and 601(b)(10) of Regulation S-K under the
Exchange Act) to which Ascent, Monitronics or any of their Subsidiaries is a
party and (b) any Contracts to which the Ascent, Monitronics or any of their
Subsidiaries is a party that is likely to reasonably involve consideration of
more than $5,000,000, in the aggregate, over a twelve-month period.

 

Merger:  means the merger of Ascent with and into Monitronics, with Monitronics
as the surviving corporation, as a result of which all assets of Ascent at the
time of the Merger

 

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(including the Ascent Cash Amount) shall become assets of Reorganized
Monitronics and the holders of Ascent’s common stock shall receive New Common
Stock in the amount of the Ascent Share Distribution on the terms and conditions
set forth in the Restructuring Term Sheet.

 

Merger Agreement:  means the Agreement and Plan of Merger, dated as of May 24,
2019, by and between Ascent and Monitronics, that sets forth the terms and
conditions of the Merger.

 

Merger Approvals:  means all requisite approvals to consummate the Merger
(including, for the avoidance of doubt, all third-party and regulatory approvals
required to consummate the Merger, including approvals from the SEC and
stockholder approvals).

 

Money Laundering Laws:  has the meaning given to such term in Section 2.23
hereof.

 

Monitronics:  has the meaning given to such term in the preamble hereof.

 

New Common Stock:  has the meaning given to such term in the Restructuring
Support Agreement.

 

Net Cash Amount:  has the meaning given to such term in the Restructuring
Support Agreement.

 

Net Cash Certificate:  has the meaning given to such term in
Section 1.1(b) hereof.

 

Net Cash Shortfall Amount:  means an amount equal to the product of the Net Cash
Shortfall Shares and the Exercise Price.

 

Net Cash Shortfall Shares:  has the meaning given to such term in
Section 1.3(a) hereof.

 

No Recourse Party:  has the meaning given to such term in Section 12.14 hereof.

 

Non-Accredited Noteholder:  means each Rights Offering Participant who certifies
in the Questionnaire that it is not an Accredited Noteholder.

 

Non-Ascent Restructuring Toggle:  has the meaning given to such term in the
Restructuring Support Agreement.

 

Non-Defaulting Backstop Commitment Party:  has the meaning given to such term in
Section 1.3(c) hereof.

 

Note Claims:  has the meaning given to such term in the Restructuring Term
Sheet.

 

Noteholder Termination Events:  has the meaning given to such term in
Section 7(b)(v) hereof.

 

Notes:  has the meaning given to such term in the Restructuring Support
Agreement.

 

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Order:  means any order, writ, judgment, injunction, decree, rule, ruling,
directive, stipulation, determination or award made, issued or entered by or
with any Governmental Body, whether preliminary, interlocutory or final.

 

Organizational Documents:  means, with respect to any Person other than a
natural person, the documents by which such Person was organized (such as a
certificate of incorporation, certificate of formation, certificate of limited
partnership or articles of organization, and including, without limitation, any
certificates of designation for preferred stock or other forms of preferred
equity) or which relate to the internal governance of such Person (such as
by-laws, a partnership agreement or an operating, limited liability or members
agreement).

 

Party(ies):  has the meaning given to such term in the preamble hereof.

 

Permitted Encumbrances:  means (a) Encumbrances for utilities and current taxes
not yet due and payable or that are due but may not be paid as a result of the
commencement of the Chapter 11 Cases, (b) easements, rights of way, restrictive
covenants, encroachments and similar non-monetary encumbrances or non-monetary
impediments against any of the purchased assets which do not, individually or in
the aggregate, adversely affect the operation of the business, (c) applicable
zoning Laws, building codes, land use restrictions and other similar
restrictions imposed by Law (but not restrictions arising from a violation of
any such Law), (d) materialmans’, mechanics’, artisans’, shippers’,
warehousemans’ or other similar common law or statutory liens incurred in the
ordinary course of business for sums not yet due and payable or that are due but
may not be paid as a result of the commencement of the Chapter 11 Cases and do
not result from a breach, default or violation by a Company Party or any of its
Subsidiaries of any Contract or Law, (e) such other Encumbrance or title
exceptions as the Commitment Parties may approve in writing in their sole
discretion or which do not, individually or in the aggregate, materially
adversely affect the operation of the business in any material respect and
(f) any obligations, liabilities or duties created by this Agreement.

 

Person:  means an individual, a partnership, a joint venture, a corporation, a
limited liability company, a trust, an unincorporated organization or a
Governmental Body.

 

Petition Date:  has the meaning given to such term in the Restructuring Support
Agreement.

 

Plan:  has the meaning given to such term in the Restructuring Support
Agreement.

 

Plan Effective Date:  has the meaning given to such term in the Restructuring
Support Agreement.

 

Post-Emergence Incentive Plan:  has the meaning given to such term in the
Restructuring Term Sheet.

 

Primary Commitment:  means, with respect to any Backstop Commitment Party, the
commitment of such Backstop Commitment Party, subject to the terms and
conditions set forth in this Agreement, to fully exercise its Required Rights
pursuant to, and on the terms set forth in, Section 1.2 hereof.

 

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Proceeds:  means the net cash proceeds from the sale of the Rights Offering
Shares from the Rights Offering pursuant to this Agreement.

 

Proceeding:  means any action, arbitration, audit, change, hearing,
investigation, inquiry, litigation or suit (whether civil, criminal,
administrative, investigative or informal) commenced, brought, conducted or
heard by or before, or otherwise involving, any Governmental Body.

 

Purchase Notice:  means any Backstop Purchase Notice or Equity Commitment
Purchase Notice.

 

Put Option:  means the right of Monitronics to sell and cause the Backstop
Commitment Parties to purchase the Backstop  Commitment Shares pursuant to (and
subject to the terms and conditions set forth in) this Agreement.

 

Put Option Premium:  has the meaning given to such term in Section 1.6 hereof.

 

Put Option Premium Shares:  has the meaning given to such term in Section 1.6
hereof.

 

Qualified Market Maker:  has the meaning given to such term in
Section 1.2(b) hereof.

 

Questionnaire:  means the Questionnaire to be included in the Rights Offering
Solicitation Materials, in which each Rights Offering Participant will be
required to certify whether it is an Accredited Noteholder or a Non-Accredited
Noteholder.

 

Registration Rights Agreement:  has the meaning given to such term in
Section 4.12 hereof.

 

Registration Statement:  means the Form S-4 registration statement filed with
the SEC on May 24, 2019 by Monitronics and/or the newly formed Delaware
corporation that that will be surviving entity in the Merger, to register the
Ascent Share Distribution under the Securities Act, as the same may be amended
or supplemented from time to time.

 

Related Fund:  means, with respect to any Commitment Party, any fund, account or
investment vehicle that is controlled or managed by (a) such Commitment Party,
(b) a controlled Affiliate of such Commitment Party or (c) the same investment
manager or advisor as such Commitment Party or an Affiliate of such investment
manager or advisor.

 

Reorganized Monitronics:  has the meaning given to such term in the
Restructuring Support Agreement.

 

Representatives:  has the meaning given to such term in Section 4.6 hereof.

 

Required Consenting Term Lenders:  has the meaning given to such term in the
Restructuring Support Agreement.

 

Required Consenting Noteholders:  has the meaning given to such term in the
Restructuring Support Agreement.

 

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Required Rights:  has the meaning given to such term in in
Section 1.2(a) hereof.

 

Required Rights Joinder:  has the meaning given to such term in
Section 1.2(b) hereof.

 

Required Rights Transferee:  has the meaning given to such term in
Section 1.2(b) hereof.

 

Requisite Commitment Parties:  means, as of any date of determination,
(a) Non-Defaulting Backstop Commitment Parties as of such date whose Backstop
Commitment Percentages constitute more than 50.0% of the Backstop Commitment
Percentages of all Non-Defaulting Backstop Commitment Parties as of such date of
determination and (b) Non-Defaulting Equity Commitment Parties as of such date
whose Equity Commitment Percentages constitute more than 50.0% of the Equity
Commitment Percentages of all Non-Defaulting Equity Commitment Parties as of
such date of determination.

 

Restructuring:  has the meaning given to such term in the Restructuring Support
Agreement.

 

Restructuring Support Agreement:  has the meaning given to such term in the
recitals hereof.

 

Restructuring Term Sheet:  has the meaning given to such term in the recitals
hereof.

 

Rights:  has the meaning given to such term in the recitals hereof.

 

Rights Offering:  has the meaning given to such term in the recitals hereof.

 

Rights Offering Documentation:  has the meaning given to such term in
Section 4.2 hereof.

 

Rights Offering Expiration Time: has the meaning given to such term in the
Rights Offering Procedures.

 

Rights Offering Participants:  means those Cash Opt Out Noteholders who duly
subscribe for Rights Offering Shares in accordance with the Rights Offering
Procedures.

 

Rights Offering Procedures:  has the meaning given to such term in
Section 1.1(a) hereof.

 

Rights Offering Shares:  has the meaning given to such term in the recitals
hereof.

 

Rights Offering Solicitation Materials:  means the offering document for the
Rights Offering (which may be the Disclosure Statement), the Rights Offering
Procedures, together with the subscription form, the Questionnaire and other
documents to be provided to Noteholders in connection with the Rights Offering.

 

Rights Offering Term Sheet:  has the meaning given to such term in the recitals
hereof.

 

RSA Effective Date:  has the meaning ascribed to “Agreement Effective Date” in
the Restructuring Support Agreement.

 

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SEC:  means the U.S. Securities and Exchange Commission.

 

Section 1145:  means Section 1145 of the Bankruptcy Code.

 

Securities Act:  means the Securities Act of 1933, as amended, and the
rules promulgated pursuant thereto.

 

Specified Issuance Documentation:  has the meaning given to such term in
Section 4.9 hereof.

 

Specified Issuance Steps:  has the meaning given to such term in Section 4.9
hereof.

 

Specified Issuances:  means, collectively, (a) the issuance by Reorganized
Monitronics of New Common Stock to Cash Opt Out Noteholders on account of their
Note Claims pursuant to the Plan, (b) the issuance by Monitronics of the Rights
(and the Rights Offering Shares issuable upon the exercise thereof) to (i) the
Rights Offering Participants who are Non-Accredited Noteholders and (ii) the
Rights Offering Participants who are Accredited Noteholders, pursuant to the
Plan and in accordance with the Rights Offering Procedures, (c)  the issuance by
Monitronics of the Backstop Commitment Shares to the Backstop Commitment Parties
pursuant to this Agreement, (d) the issuance by Monitronics of the Equity
Commitment Shares to the Equity Commitment Parties pursuant to this Agreement,
(e) if applicable, the issuance by Monitronics of the Ascent Share Distribution
pursuant to the Plan and the Merger, and (f) the issuance by Monitronics of the
Put Option Premium Shares to the Commitment Parties pursuant to this Agreement.

 

Stroock: means Stroock & Stroock & Lavan LLP, as counsel to the Commitment
Parties.

 

Subsidiary:  means, with respect to any Person (the “Owner”), any corporation or
other Person of which securities or other interests having the power to elect a
majority of that corporation’s or other Person’s board of directors or similar
governing body, or otherwise having the power to direct the business and
policies of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a contingency that has
not occurred), are held by the Owner or one or more of its Subsidiaries.

 

Subscription Agent:  has the meaning given to such term in Section 4.4 hereof.

 

Takeback Term Loan Term Sheet:  has the meaning given to such term in the
recitals hereof.

 

Term Loans:  has the meaning given to such term in the Restructuring Support
Agreement.

 

Term Sheets:  means, collectively, the Restructuring Term Sheet, the Rights
Offering Term Sheet, the DIP/Exit Facility Commitment, the Takeback Term Loan
Term Sheet, and the Governance Term Sheet.

 

Termination Date:  has the meaning given to such term in Section 7(a)(i) hereof.

 

56

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Transaction Expenses:  means the reasonable and documented fees, costs,
expenses, disbursements and charges of the Commitment Party Professionals, in
accordance with their respective engagement letters, incurred in connection with
or relating to the diligence, negotiation, preparation and/or implementation of
the Term Sheets, the Backstop Commitments, the Rights Offering, the Equity
Commitments, this Agreement and/or any of the transactions contemplated by any
of the foregoing or by the Plan, and the enforcement, attempted enforcement or
preservation of any rights or remedies under this Agreement.

 

Transfer:  has the meaning given to such term in the Restructuring Support
Agreement.

 

Unsubscribed Shares:  means any Rights Offering Shares that have not been duly
purchased in the Rights Offering by the Rights Offering Participants.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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SCHEDULE 1.1

 

Backstop Commitment Parties

 

Name of
Backstop Commitment Party

 

Backstop
Commitment
Percentage

 

Mailing Address Fax Number and
E-mail Address

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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SCHEDULE 1.2

 

Equity Commitment Parties

 

Name of
Equity Commitment Party

 

Equity
Commitment
Percentage

 

Mailing Address Fax Number and
E-mail Address

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT A

 

Restructuring Support Agreement

 

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EXHIBIT B

 

Outline of Rights Offering Procedures(1)

 

The Rights Offering Procedures shall:

 

1.                                      contemplate that the Debtors will,
subject to the prior entry of the Agreement Order, commence the Rights Offering
within five (5) Business Days of the Petition Date;

 

2.                                      specify the deadline for exercising
Rights as set forth in the Rights Offering Procedures, which shall be the first
Business Day that is thirty (30) days after the commencement date of the Rights
Offering, subject to extension (the “Rights Offering Exercise Deadline”);

 

3.                                      include a mechanism whereby any Backstop
Commitment Party that is also a First Lien Term Lender will have the ability to
exercise its Rights by (a) (x) exchanging an aggregate principal amount of its
Term Loans (excluding any Contributed Term Loans) in an amount not to exceed its
ratable portion of the Effective Date Pay Down, on a dollar-for-dollar basis and
(y) waiving such amount of its ratable portion of the Effective Date Paydown, in
lieu of submitting cash to pay the Exercise Price for the shares it elects to
purchase pursuant to the exercise of its Rights, and (b) paying cash for the
remainder, if any, of such Exercise Price.  All other Rights Offering
Participants (excluding the Backstop Commitment Parties) must pay the full
amount of their respective aggregate Exercise Price in cash;

 

4.                                      require that each Rights Offering
Participant certify in the Questionnaire that it is either (a) an Accredited
Noteholder (to be defined in the Rights Offering Procedures as including any
noteholder who can qualify as a Qualified Institutional Buyer under Rule 144A
under the Securities Act, a non-U.S. Person, as defined under Regulation S under
the Securities Act or an “accredited investor” as defined under Regulation D of
the Securities Act) or (b) a Non Accredited Noteholder (to be defined in the
Rights Offering Procedure as any noteholder who does not fall under the
definition of “Accredited Investor”);

 

5.                                      provide for the exemptions for the
Rights Offering to the registration requirements of the Securities Act to be
based on Section 1145 and/or Rule 144A, Section 4(a)(2), Regulation D or
Regulation S of the Securities Act (the “Private Placement Exemption”) with
respect to the issuance of Rights (and of the Rights Offering Shares issuable
pursuant to the exercise of such Rights) based on an allocation mechanism that:

 

a.              first, allocates Rights issued under Section 1145 to Rights
Offering Participants who are Non-Accredited Noteholders, on a pro rata basis;
and

 

b.              second, allocates any remaining Rights issued under Section 1145
to Rights Offering Participants that are Accredited Noteholders on a pro rata
basis and, to

 

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(1)  Capitalized terms that are used but not otherwise defined in herein shall
have the meanings given to them in the Put Option Agreement (the “Put Option
Agreement”) to which this Exhibit B is attached.

 

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the extent necessary to preserve the availability of Section 1145 pursuant to
applicable SEC guidance, any remaining Rights will be issued to such Accredited
Noteholders under the Private Placement Exemption;

 

6.                                      provide that there will be no
over-subscription rights associated with the Rights Offering.  Any Unsubscribed
Shares will not be offered to other Rights Offering Participants but, rather,
will be purchased by the Backstop Commitment Parties, subject to the terms and
conditions set forth in the Put Option Agreement, in accordance with their
respective Backstop Commitments;

 

7.                                      contemplate, consistent with the Rights
Offering Term Sheet, that the cash proceeds of the Rights Offering and, to the
extent applicable, the proceeds of the funding of the Backstop Commitments will
be deposited into an escrow account subject to a customary escrow agreement (or
a segregated bank account maintained by the Subscription Agent), with funds
released consistent with this Rights Offering Term Sheet as of the Plan
Effective Date;

 

8.                                      include other terms, conditions and
procedures as are customary for similar rights offerings by a debtor in a
chapter 11 bankruptcy or an out-of-court restructuring where the shares to be
issued in a rights offering are to be issued through the facilities of DTC; and

 

9.                                      provide that the Rights Offering will be
conducted in accordance with the Restructuring Support Agreement, the Term
Sheets and the Put Option Agreement, and shall otherwise be on terms and
conditions acceptable to the Company Parties, the Required Consenting
Noteholders, and the Backstop Commitment Parties, and reasonably acceptable to
the Required Consenting Term Lenders, including with respect to the form and
content of the Rights Offering Solicitation Materials (and the Put Option
Agreement.

 

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EXHIBIT C

 

Form of Required Rights Joinder(2)

 

The undersigned (“Joinder Party”) hereby acknowledges that it is acquiring from
[TRANSFEROR] Rights to subscribe for and purchase in the Rights Offering, in
accordance with the Rights Offering Procedures and subject to the terms and
conditions set forth in the Rights Offering Procedures and the Plan, up to [  ]
shares of Reorganized Monitronics common stock, and that such Rights constitute
“Required Rights” under the Put Option Agreement, dated as of May 28, 2019 (the
“Agreement”) by and among Monitronics International, Inc., (“Monitronics”) and
certain of its subsidiaries bound thereto, Ascent Capital Group, Inc. (“Ascent”)
and the Commitment Parties, and are subject to the provisions of Section 1.2 of
the Put Option Agreement.  The undersigned has read and understand the Put
Option Agreement provisions applicable to Required Rights, including without
limitation Section 1.2(b), and agrees to (i) exercise (or cause to be exercised)
in full all such Required Rights, in accordance with the terms and conditions of
the Rights Offering Procedures, (ii) purchase (or cause to be purchased) all of
the Rights Offering Shares issuable pursuant to the exercise of such Required
Rights in accordance with the terms and conditions of the Rights Offering
Procedures and (iii) fully comply with Section 1.2(b) of the Put Option
Agreement (including the Required Rights Joinder requirements) with respect to
any subsequent Transfer of any such Required Rights.

 

This Joinder shall be governed by and construed in accordance with the internal
laws of the State of New York, without regard to any conflicts of law provisions
which would require the application of the law of any other jurisdiction.

 

All notices and other communications given or made pursuant to the Agreement
shall be sent to the Joinder Party at:

 

 

 

 

 

 

 

Email:

 

 

 

The Joinder Party shall deliver a copy of this Agreement to counsel to the
Debtors, counsel to Ascent, and counsel to the Commitment Parties.

 

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(2)           Capitalized terms not used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Agreement (as defined below).

 

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[NAME]

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

Date:

 

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