Exhibit 10.1

 

AMENDMENT NO. 3 TO FORBEARANCE AGREEMENT

 

This Amendment No. 3 to the Forbearance Agreement (this “Third Amendment”) is
entered into as of April 30, 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, and Amendment No. 2, dated April 24, 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
April 30, 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, April 30, 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 3,
2019 and (2) extend the Outside Date to May 3, 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 Third 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 3, 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 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

 

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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; and

 

(b)                                 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.”

 

(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 3,
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.”

 

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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 Third Amendment shall be construed as
modifying or amending any such terms unless otherwise expressly provided herein.

 

5.                                      Conditions Precedent to Effectiveness. 
This Third Amendment shall become effective on the date (the “Third 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 Third 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 Third
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 Third 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 Third Amendment by telecopy or other
electronic imaging means (including “.pdf”) shall be effective as delivery of a
manually executed counterpart of this Third Amendment.

 

[signature pages follow]

 

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IN WITNESS WHEREOF, the parties have executed this Third 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. 3 to Forbearance Agreement]

 

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[BANK OF AMERICA, N.A.]

 

[Signature page to Amendment No. 3 to Forbearance Agreement]

 

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[CONSENTING LENDER]

 

[Signature page to Amendment No. 4 to Forbearance Agreement]

 

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