Document:

MONITRONICS INTERNATIONAL, INC.

 

________________________

Waiver Agreement

Dated as of March 28, 2006

As To

SUBORDINATED NOTE AND WARRANT PURCHASE AGREEMENT

Dated as of January 18, 2002

________________________

Re:  14.5% Subordinated Notes due March 1, 2010

and

Warrants

 

 

 

Waiver Agreement

This Waiver Agreement (the "Agreement") dated as of March 28, 2006 is made by and between Monitronics International, Inc. (the "Company") and The Northwestern Mutual Life Insurance Company ("NML").

RECITALS:

A.The Company and NML have entered into a Subordinated Note and Warrant Purchase Agreement dated as of January 18, 2002 (as amended, the "Purchase Agreement;" terms defined in the Purchase Agreement which are used herein shall have the same meaning as are set forth in the Purchase Agreement for such terms unless otherwise defined herein).

B.The Company has requested that NML waive certain provisions of the Purchase Agreement and NML is willing to grant such a waiver, but only on the terms set forth in this Agreement.

AGREEMENT:

In consideration of the recitals set forth above, the terms contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Waiver.  NML hereby waives the Company's obligations under Section 7.02(k) of the Purchase Agreement to limit the amount of Capital Expenditures made by the Company and its Subsidiaries during the Company's fiscal year ending June 30, 2006 provided that the aggregate amount of Capital Expenditures made by the Company and its Subsidiaries during the Company's fiscal year ending June 30, 2006 does not exceed $6,500,000 and the Company may carry forward any permitted but unused Capital Expenditures from the fiscal year ended June 30, 2006 to the fiscal year ended June 30, 2007.

2.Consent.  The retirement of James R. Hull as Chief Executive Officer and President of the Company without the appointment of a replacement within 120 days who is satisfactory to NML in its reasonable judgment would constitute a Change in Control resulting in the obligation of the Company to make an offer to prepay the Notes under Section 2.06(a) of the Purchase Agreement.  Subject to the terms and conditions set forth in this Agreement, NML hereby consents to the appointment of Michael R. Haislip as Chief Executive Officer and President of the Company effective as of March 31, 2006.

3.Representations and Warranties.  The Company represents and warrants that: (A) the execution and delivery by the Company of this Agreement (1) are within its corporate powers, (2) have been duly authorized, (3) are not in contravention of the terms of its constitutive documents, or of any contract, instrument, indenture or other agreement or undertaking to which it is a party or by which it or any of its property is bound or any law, judgment, decree or order applicable to it, and (4) do not require any governmental consent, registration or approval or any filing with or notice to any governmental entity or other third party; (B) this Agreement, and the Purchase Agreement as modified hereby, constitute the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by (1) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally and (2) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); (C) since June 30, 2005, there has been no change in the assets or liabilities or in the financial or other condition of the Company or any of its Subsidiaries that could reasonably be expected to have a Material Adverse Effect; and (D) as of the date hereof (and, after giving effect hereto) there exists no Default or Event of Default.

4.Miscellaneous.

4A.Ratification.  The Company each hereby ratifies, approves and reaffirms the provisions set forth in the Purchase Agreement, and, except as expressly modified hereby, the Purchase Agreement remains in full force and effect.

4B.No Further Waiver.  Except as specifically stated herein, the execution, delivery and effectiveness of this Agreement shall not operate as a waiver of any right, power or remedy of NML, nor constitute an amendment or waiver of, or consent to any departure from, any provision of the Purchase Agreement or any other document, instrument or agreement executed or delivered in connection therewith.

4C.Fees.  The Company agrees to pay on demand all costs and expenses of NML in connection with the preparation, execution and delivery of this Agreement and any and all other instruments and documents delivered hereunder.

4D.Governing Law.  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York.

4E.Headings.  Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

4F.Counterparts.  This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery by any party of telecopied copies of executed counterparts hereof shall constitute execution and delivery hereof by such party.

[Signature page follows]

IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year first above written.

Monitronics International, Inc.

 

 

By:

Name:  Michael Meyers

Title:    Vice President and Chief

         Financial Officer

The Northwestern Mutual Life

Insurance Company

 

 

By:

Name:  

Title:  

 

 

 

 

 

 

 

 

 

[Signature Page to Waiver Agreement]Form of Phantom Stock Grant Agreement

 Exhibit 10.1 
 PHANTOM STOCK AWARD AGREEMENT 
 This Phantom Stock Award Agreement (the
“Agreement”) has been made as of                      (the “Date of Grant”) between Duke Energy Corporation,
a Delaware corporation, with its principal offices in Charlotte, North Carolina (the “Corporation”), and             (the “Grantee”). 
 RECITALS 
 Under the
[                    ] as it may, from time to time, be amended (the “Plan”), the Compensation Committee of the Board of Directors of the
Corporation (the “Committee”), or its delegatee, has determined the form of this Agreement and selected the Grantee, as an Employee, to receive the award evidenced by this Agreement (the “Award”) and the Phantom Stock units and
tandem Dividend Equivalents that are subject hereto. The applicable provisions of the Plan are incorporated in this Agreement by reference, including the definitions of terms contained in the Plan (unless such terms are otherwise defined herein).

 AWARD 
 In accordance
with the Plan, the Corporation has made this Award, effective as of the Date of Grant and upon the following terms and conditions: 
 Section 1. Number and Nature of Phantom Stock Units and Tandem Dividend Equivalents. The number of Phantom Stock units and the number of tandem Dividend Equivalents subject to this Award are each
                     (            ). Each Phantom Stock unit, upon becoming
vested before its expiration, represents a right to receive payment in the form of one (1) share of Common Stock. Each tandem Dividend Equivalent represents a right to receive cash payments equivalent to the amount of cash dividends declared
and paid on one (1) share of Common Stock after the Date of Grant and before the Dividend Equivalent expires. Phantom Stock units and Dividend Equivalents are used solely as units of measurement, and are not shares of Common Stock and the
Grantee is not, and has no rights as, a shareholder of the Corporation by virtue of this Award. 

 Section 2. Vesting of Phantom Stock Units. The specified percentage
of the Phantom Stock units subject to this Award, and not previously forfeited, shall vest, with such percentage considered satisfied to the extent such Phantom Stock units have previously vested, as follows: 
 (a) Upon Grantee remaining continuously employed by the Corporation, including Subsidiaries, through the specified anniversary of the Date of Grant,

  

			
	 Vesting Percentage
	  	 Anniversary

  
 For purposes of vesting under this
Section 2(a), if such employment terminates at a time when Grantee is eligible for an immediately payable early or normal retirement benefit under the Duke Energy Retirement Cash Balance Plan or Cinergy Corp. Non-Union Employees’ Pension
Plan, or under another retirement plan of the Corporation or Subsidiary which plan the Committee, or the delegatee, in its sole discretion, determines to be the functional equivalent of the Duke Energy Retirement Cash Balance Plan or Cinergy Corp.
Non-Union Employees’ Pension Plan, Grantee shall be considered to have “retired” and such employment shall be considered to continue, with continued vesting under this Section 2(a), unless the Committee or its delegatee, in its
sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, in which case any such Phantom Stock units not previously vested, or vested by application of the following sentence shall be forfeited, or
unless the Grantee dies, in which case the Phantom Stock units subject to this Award shall vest in accordance with the following sentence. If such employment terminates (i) as the result of Grantee’s death, (ii) as the result of
Grantee’s permanent and total disability within the meaning of Code Section 22(e)(3), (iii) as the result of termination of such employment by the Corporation, or employing Subsidiary, other than for cause, as determined by the
Committee or its delegatee, or (iv) as the direct and sole result, as determined by the Committee or its delegatee, in its sole discretion, of the divestiture of assets, a business or a company, by the Corporation or a Subsidiary, the Phantom
Stock units subject to this Award shall vest at such vesting percentage determined by the Committee or its delegatee, in its sole discretion, by prorating from the above schedule to reflect only that portion of the period beginning on the Date of
Grant and ending with the              anniversary of the Date of Grant during which such employment continued while Grantee was entitled to payment of salary (including any period
that employment was deemed to continue prior to the Grantee’s death as a result of his or her “retirement”), and any such Phantom Stock units not then or previously vested shall be forfeited. 
 In the event that at a time when vesting would otherwise occur under this Section 2(a), Grantee is on an employer-approved, personal leave of absence, then, unless
prohibited by law, vesting shall be postponed and shall not occur unless and until Grantee returns to active service in accordance with the terms of the approved personal leave of absence and before the tenth anniversary of the Date of Grant.

 (b) 100%, if, following the occurrence of a Change in Control and before the
             anniversary of such occurrence, such employment is terminated involuntarily, and not for cause, by the Corporation, or employing Subsidiary, or their successor, as
determined by the Committee or its delegate, or their successor, in its sole discretion, other than under circumstances described in the second sentence of Section 2(a). 

 Section 3. Violation of Grantee Obligation. In consideration of the
continued vesting opportunity provided under Section 2 following the termination of Grantee’s continuous employment by the Corporation, including Subsidiaries, if Grantee is considered “retired”, Grantee agrees that during the
period beginning with such termination of employment and ending with the fifth anniversary of the Date of Grant (“Restricted Period”), Grantee shall not (i) without the prior written consent of the Corporation, or its delegatee,
become employed by, serve as a principal, partner, or member of the board of directors of, or in any similar capacity with, or otherwise provide service to, a competitor, to the detriment, of the Corporation or any Subsidiary, or (ii) violate
any of Grantee’s other noncompetition obligations, or any of Grantee’s nonsolicitation or nondisclosure obligations, to the Corporation or any Subsidiary. The noncompetition obligations of clause (i) of the preceding sentence shall be
limited in scope and shall be effective only to competition with the Corporation or any Subsidiary in the businesses of: production, transmission, distribution, or retail or wholesale marketing or selling of electricity; gathering, processing or
transmission of natural gas, resale or arranging for the purchase or for the resale, brokering, marketing, or trading of natural gas, electricity or derivatives thereof; energy management and the provision of energy solutions; gathering,
compression, treating, processing, fractionation, transportation, trading, marketing of natural gas components, including natural gas liquids; management of land holdings and development of commercial, residential and multi-family real estate
projects; development and management of fiber optic communications systems; development and operation of power generation facilities, and sales and marketing of electric power and natural gas, domestically and abroad; and any other business in which
the Corporation, including Subsidiaries, is engaged at the termination of Grantee’s continuous employment by the Corporation, including Subsidiaries; and within the following geographical areas (i) any country in the world where the
Corporation, including Subsidiaries, has at least US$25 million in capital deployed as of termination of Grantee’s continuous employment by Corporation, including Subsidiaries; (ii) the continent of North America; (iii) the United
States of America and Canada; (iv) the United States of America; (v) the states of North Carolina, South Carolina, Virginia, Georgia, Florida, Texas, California, Massachusetts, Illinois, Michigan, New York, Colorado, Oklahoma and
Louisiana; (vi) the states of North Carolina, South Carolina, Texas and Colorado; (vii) following consummation of the transactions contemplated by the Merger Agreement, the states of Ohio, Colorado, Kentucky, and Indiana; and
(viii) any state or states with respect to which was conducted a business of the Corporation, including Subsidiaries, which business constituted a substantial portion of Grantee’s employment. The Corporation and Grantee intend the above
restrictions on competition in geographical areas to be entirely severable and independent, and any invalidity or enforceability of this provision with respect to any one or more of such restrictions, including areas, shall not render this provision
unenforceable as applied to any one or more of the other restrictions, including areas. If any part of this provision is held to be unenforceable because of the duration, scope or area covered, the Corporation and Grantee agree to modify such part,
or that the court making such holding shall have the power to modify such part, to reduce its duration, scope or area, including deletion of specific words and phrases, i.e., 

 “blue penciling”, and in its modified, reduced or blue pencil form, such part shall become enforceable and
shall be enforced. Nothing in Section 3 shall be construed to prohibit Grantee being retained during the Restricted Period in a capacity as an attorney licensed to practice law, or to restrict Grantee providing advice and counsel in such
capacity, in any jurisdiction where such prohibition or restriction is contrary to law. 
 Section 4.
Forfeiture/Expiration. Any Phantom Stock unit subject to this Award shall be forfeited upon the termination of Grantee’s continuous employment by the Corporation, including Subsidiaries, from the Date of Grant, except to
the extent otherwise provided in Section 2, and, if not previously vested and paid, or deferred, or forfeited, shall expire immediately before the tenth anniversary of the Date of Grant. Any Dividend Equivalent subject to this Award shall
expire at the time the unit of Phantom Stock with respect to which the Dividend Equivalent is in tandem (i) is vested and paid, or deferred, (ii) is forfeited, or (iii) expires. 
 Section 5. Dividend Equivalent Payments. Payments with respect to any Dividend Equivalent subject to this Award
shall be paid in cash to the Grantee as soon as practicable following any time cash dividends are declared and paid with respect to the Common Stock on or after the Date of Grant and before the Dividend Equivalent expires. However, should the timing
of a particular payment under Section 6 to the Grantee in shares of Common Stock in conjunction with the timing of a particular cash dividend declared and paid on Common Stock be such that the Grantee receives such shares without the right to
receive such dividend and the Grantee would not otherwise be entitled to payment under the expiring Dividend Equivalent with respect to such dividend, the Grantee, nevertheless, shall be entitled to such payment. Dividend Equivalent payments shall
be subject to withholding for taxes. 
 Section 6. Payment of Phantom Stock Units. Payment of Phantom
Stock units subject to this Award shall be made to the Grantee as soon as practicable following the time such units become vested in accordance with Section 2 prior to their expiration but in no event later than 30 days following such vesting,
except to the extent deferred by Grantee in accordance with such procedure as the Committee, or its delegatee, may prescribe. Payment shall be subject to withholding for taxes. Payment shall be in the form of one (1) share of Common Stock for
each full vested unit of Phantom Stock and any fractional vested unit of Phantom Stock shall not be payable unless and until subsequent vesting results in a full unit of Phantom Stock becoming vested. Notwithstanding the foregoing, to the extent
that Grantee fails to timely tender to the Corporation sufficient cash to satisfy withholding for tax requirements, the number of shares of Common Stock that would otherwise be paid (valued at Fair Market Value on the date the respective unit of
Phantom Stock became vested, or if later, payable) shall be reduced by the Committee, or its delegatee, in its sole discretion, to fully satisfy such requirements. In the event that payment, after any such reduction in the number of shares of Common
Stock to satisfy withholding for tax requirements, would be less than ten (10) shares of Common Stock, then, if so determined by the Committee, or its delegatee, in its sole discretion, payment, instead of being made in shares of Common Stock,
shall be made in a cash amount equal in value to the shares of Common Stock that would otherwise be paid, valued at Fair Market Value on the date the respective Phantom Stock units became vested, or if later, payable. 

 Section 7. No Employment Rights. Nothing in this Agreement or in the
Plan shall confer upon the Grantee the right to continued employment by the Corporation or any Subsidiary, or affect the right of the Corporation or any Subsidiary to terminate the employment or service of the Grantee at any time for any reason.

 Section 8. Nonalienation. The Phantom Stock units and Dividend Equivalents subject to this Award are
not assignable or transferable by the Grantee. Upon any attempt to transfer, assign, pledge, hypothecate, sell or otherwise dispose of any such Phantom Stock unit or Dividend Equivalent, or of any right or privilege conferred hereby, or upon the
levy of any attachment or similar process upon such Phantom Stock unit or Dividend Equivalent, or upon such right or privilege, such Phantom Stock unit or Dividend Equivalent or right or privilege, shall immediately become null and void. 

Section 9. Determinations. Determinations by the Committee, or its delegatee, shall be final and conclusive with
respect to the interpretation of the Plan and this Agreement. 
 Section 10. Governing Law. The
validity and construction of this Agreement shall be governed by the laws of the state of Delaware applicable to transactions taking place entirely within that state. 
 Section 11. Certain Definitions. The following shall apply notwithstanding anything in this Agreement or the Plan to the contrary. The term “Change in Control” has the
meaning given such term in Section 12.2 of the Duke Energy Corporation 1998 Long-Term Incentive Plan, as amended; provided, however, that no Change in Control shall be deemed to occur in respect of any transactions or events
resulting from the separation of the Corporation’s gas and electric businesses. The term “Merger Agreement” shall mean the Agreement and Plan of Merger dated as of May 8, 2005 by and among the Duke Energy Corporation, Cinergy
Corp., Deer Holding Corp., Deer Acquisition Corp. and Cougar Acquisition Corp., as it may be amended. The term “Subsidiaries” shall mean any entity that is wholly owned, directly or indirectly, by the Corporation, or any other affiliate of
the Corporation that is so designated, from time to time, by the Committee. For purposes of this Agreement, the Grantee shall be considered to be eligible for an early retirement benefit under the Cinergy Corp. Non-Union Employees’ Pension Plan
only if the Grantee has attained age 55 and satisfied all other applicable requirements of such plan. 
 Section 12.
Conflicts with Plan, Correction of Errors, and Grantee’s Consent. In the event that any provision of this Agreement conflicts in any way with a provision of the Plan, such Plan provision shall be controlling and the
applicable provision of this Agreement shall be without force and effect to the extent necessary to cause such Plan provision to be controlling. In the event that, due to administrative error, this Agreement does not accurately reflect a Phantom
Stock Award properly granted to Grantee 

 pursuant to the Plan, the Corporation, acting through its Executive Compensation and Benefits Department, reserves the
right to cancel any erroneous document and, if appropriate, to replace the cancelled document with a corrected document. It is the intention of the Corporation and the Grantee that this Award not result in unfavorable tax consequences to Grantee
under Code Section 409A. Accordingly, Grantee consents to such amendment of this Agreement as the Corporation may reasonably make in furtherance of such intention, and the Corporation shall promptly provide, or make available to, Grantee a copy
of any such amendment. 
 Notwithstanding the foregoing, this Award is subject to cancellation by the Corporation in its sole discretion
unless the Grantee, by not later than                              , has signed a
duplicate of this Agreement, in the space provided below, and returned the signed duplicate to the Executive Compensation and Benefits Department - Phantom Stock [(ST05F)], Duke Energy Corporation, P. O. Box 1007, Charlotte, NC 28201-1007,
which, if, and to the extent, permitted by the Executive Compensation and Benefits Department, may be accomplished by electronic means. 
 IN
WITNESS WHEREOF, the Corporation has caused this Agreement to be executed and granted in Charlotte, North Carolina, to be effective as of the Date of Grant. 
  

							
	ATTEST:	 	DUKE ENERGY CORPORATION
				
	By:	  	  
	 	By:	 	  

		  	Corporate Secretary	 	Its:	 	Chief Executive Officer

 Acceptance of Phantom Stock Award 
 IN WITNESS OF Grantee’s acceptance of this Award and Grantee’s agreement to be bound by the provisions of this Agreement and the Plan, Grantee
has signed this Agreement this          day of                     . 
  

	
	  

	Grantee’s Signature
	  
  

	(print name)
	  
  

	(social security number)
	  
  

	(address)

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