Exhibit 10.2

 

AMENDMENT NO. 6 TO FORBEARANCE AGREEMENT

 

This Amendment No. 6 to the Forbearance Agreement (this “Sixth Amendment”) is
entered into as of May 10, 2019 by and between Monitronics International, Inc.,
a Texas corporation (the “Borrower”), each other Loan Party to the Credit
Agreement, Bank of America, N.A., as administrative agent (in such capacity, the
“Administrative Agent”) and certain Lenders party hereto (collectively,
the “Parties”).

 

RECITALS

 

A.            On April 1, 2019, the Parties entered into that certain
Forbearance Agreement (as amended by Amendment No. 1, dated April 12, 2019,
Amendment No. 2, dated April 24, 2019, Amendment No. 3, dated April 30, 2019,
Amendment No. 4, dated May 3, 2019, and Amendment No. 5, dated May 8, 2019
the “Forbearance Agreement”), under which the Required Lenders agreed to
temporarily forbear on enforcement of the Specified Defaults, subject to the
terms and conditions contained in the Forbearance Agreement.

 

B.            The Forbearance Agreement contains a milestone that provides that
no later than 5:00 p.m. (New York Time) on May 10, 2019 (the “RSA Deadline”),
the Borrower shall have entered into a restructuring support agreement
acceptable to holders of at least 50% of the outstanding Term B-2 Loans, in
their sole discretion (the “RSA Milestone”).  In the event that the RSA
Milestone is not satisfied by the RSA Deadline, the Forbearance Period
terminates pursuant to the terms of the Forbearance Agreement.  In addition, the
Forbearance Agreement provides that the Forbearance Termination Date is, among
other things, May 10, 2019 (the “Outside Date”).

 

C.            The Parties hereby desire to (1) further extend the RSA Deadline
to no later than 5:00 p.m. (New York Time) on May 15, 2019 and (2) extend the
Outside Date to May 15, 2019.

 

Now, therefore, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the Administrative
Agent, the Borrower, and the undersigned Lenders hereby acknowledge, agree and
consent to the following:

 

1.             Defined Terms.  Except as defined herein, capitalized terms used
herein shall have the meanings, if any, assigned to such terms in the
Forbearance Agreement.

 

2.             Interpretation.  The rules of interpretation set forth in
Section 1.02 of the Credit Agreement shall be applicable to this Sixth Amendment
and are incorporated herein by this reference.

 

3.             Amendments.

 

(a)           Section 4 of the Forbearance Agreement is replaced in its entirety
and further amended as follows:

 

“4.           Forbearance.  During the period (the “Forbearance Period”)
commencing on the Forbearance Effective Date (as defined herein) and ending on
the date (the “Forbearance Termination Date”) which is the earliest to occur of
(a) May 15, 2019, (b) the failure to meet any Milestone (as defined in Section 8
hereof); (c) the occurrence of any Default or Event of Default under the Credit
Agreement (other than the Specified Defaults), (d) the failure of the Borrower
to comply with any of the requirements of Section 6 or Section 7 hereof, (e) the
acceleration of the 9.125% Senior Notes due 2020 (the “Notes”) issued

 

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pursuant to that certain Indenture dated as of March 23, 2012 (the “Notes
Indenture”) by and among the Borrower, the guarantors party thereto, and U.S.
Bank National Association, as trustee (in such capacity, the “Notes Trustee”),
or (f) any action by the Notes Trustee and/or any holder of Notes to exercise
rights or remedies pursuant to the Notes Indenture after an Event of Default (as
defined in the Notes Indenture), the Required Lenders hereby forbear from
enforcement of:

 

(a)           the requirement of Section 6.01(a) of the Credit Agreement that
the report and opinion of Ernst & Young, KPMG or another independent certified
public accountant of nationally recognized standing reasonably acceptable to the
Required Lenders delivered with respect to the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of the fiscal year ended
December 31, 2018, and the related consolidated statement of income or
operations, and consolidated statement of changes in shareholders’ equity, and
cash flows for such fiscal year, not include an explanatory paragraph expressing
substantial doubt about the ability of the Borrower or any Loan Party to
continue as a going concern or any qualification or exception as to the scope of
such audit;

 

(b)           any Default or Event of Default under Section 8.01(b) of the
Credit Agreement, resulting from the Consolidated Senior Secured Eligible RMR
Leverage Ratio exceeding the limit specified in Section 7.11(c) of the Credit
Agreement as of the fiscal quarter ended March 31, 2019 (the “Financial Covenant
Default”); and

 

(c)           any Default or Event of Default under Section 8.01(e) of the
Credit Agreement, resulting from the Borrower’s failure to make the interest
payment due on April 1, 2019 under the Senior Unsecured Notes.

 

Upon the Forbearance Termination Date, (i) the forbearance set forth in this
Section 4 of this Forbearance shall terminate automatically and be of no further
force or effect, and (ii) subject to the terms of the Loan Documents and
applicable law, the Administrative Agent and each Lender shall be free in its
sole and absolute discretion, without limitation, to proceed to enforce any or
all of its rights and remedies set forth in the Credit Agreement, the other Loan
Documents and applicable law.  In furtherance of the foregoing, and
notwithstanding the occurrence of the Forbearance Effective Date, each Loan
Party acknowledges and confirms that, subject to the Forbearance, all rights and
remedies of the Administrative Agent and the Lenders under the Loan Documents
and applicable law with respect to the Borrower or any other Loan Party shall
continue to be available to the Administrative Agent and the Lenders.  For the
avoidance of doubt, each Loan Party acknowledges and confirms that the agreement
of the Administrative Agent and the Lenders signatory hereto temporarily to
forbear shall not apply to nor preclude any remedy available to the
Administrative Agent or the Lenders in connection with any proceeding commenced
under any bankruptcy or insolvency law, including, without limitation, to any
relief in respect of adequate protection or relief from any stay imposed under
such law.  The parties hereto agree that the running of all statutes of
limitation and the doctrine of laches applicable to all claims or causes of
action that the Administrative Agent or any Lender may be entitled to take or
bring in order to enforce its rights and remedies against the Borrower or any
other Loan Party are, to the fullest extent permitted by law, tolled and
suspended during the Forbearance Period.  For the avoidance of doubt, no grace
period or period required for a Default to mature or become an Event of Default
shall be tolled or suspended by this Forbearance.”

 

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(b)           Section 8(b) of the Forbearance Agreement is replaced in its
entirety and further amended as follows:

 

“(b)         No later than 5:00 p.m. (New York Time) on May 15, 2019, the
Borrower shall have entered into a restructuring support agreement acceptable to
holders of at least 50% of the outstanding Term B-2 Loans, in their sole
discretion.”

 

4.             Other Terms.  Except as expressly set forth herein, all other
terms of the Forbearance Agreement shall remain in full force and effect, and
nothing in this Sixth Amendment shall be construed as modifying or amending any
such terms unless otherwise expressly provided herein.

 

5.             Conditions Precedent to Effectiveness.  This Sixth Amendment
shall become effective on the date (the “Sixth Amendment Effective Date”) upon
which each of the conditions precedent set forth below have been satisfied:

 

(a)           the Administrative Agent (or its counsel) shall have received a
counterpart of this Sixth Amendment signed by each of the Borrower, the
Administrative Agent and the Required Lenders.

 

(b)           after giving effect to the forbearance under the Forbearance
Agreement, the representations and warranties of the Borrower contained in
Article V of the Credit Agreement or any other Loan Document are true and
correct in all material respects (or with respect to representations and
warranties qualified by materiality, in all respects) on and as of the Sixth
Amendment Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be
true and correct as of such earlier date in all material respects (or with
respect to representations and warranties qualified by materiality, in all
respects), except that the representations and warranties contained in Sections
5.05(a) and (b) of the Credit Agreement shall be deemed to refer to the most
recent statements furnished pursuant to Sections 6.01(a) and (b) of the Credit
Agreement, respectively.

 

6.             Counterparts.  This Sixth Amendment may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  Delivery of an executed counterpart of a
signature page of this Sixth Amendment by telecopy or other electronic imaging
means (including “.pdf”) shall be effective as delivery of a manually executed
counterpart of this Sixth Amendment.

 

[signature pages follow]

 

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IN WITNESS WHEREOF, the parties have executed this Sixth Amendment as of the
date and year first above written.

 

 

MONITRONICS INTERNATIONAL, INC.

 

 

 

By:

/s/ William E. Niles

 

 

Name: William E. Niles

 

 

Title: Executive Vice President and Secretary

 

 

[Signature page to Amendment No. 6 to Forbearance Agreement]

 

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[BANK OF AMERICA, N.A.]

 

[Signature page to Amendment No. 6 to Forbearance Agreement]

 

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[CONSENTING LENDER]

 

[Signature page to Amendment No. 6 to Forbearance Agreement]

 

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