Document:

WELLS FARGO & COMPANY 8-K

 

Exhibit 4.2

 

[Face of Note]

 

Unless this certificate
is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”),
to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as requested by an authorized representative of DTC (and any payment is made to Cede
& Co. or such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

	CUSIP NO. 95001D3A6	PRINCIPAL AMOUNT:  $___________
	REGISTERED NO. ______	 

 

 

WELLS FARGO & COMPANY

 

MEDIUM-TERM NOTE, SERIES T

 

Due Nine Months or More From Date of Issue

 

Notes due October 30, 2023

 

WELLS FARGO & COMPANY,
a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the “Company,”
which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises
to pay to CEDE & Co., or registered assigns, the principal sum of ___________________________ ($__________) on October 30,
2023 (the “Stated Maturity Date”) and to pay interest thereon from October 30, 2018 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for semi-annually on each April 30 and October 30,
commencing April 30, 2019, and at Maturity (each, an “Interest Payment Date”), at the rate per annum specified
below until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest next preceding
such Interest Payment Date. The Regular Record Date for an Interest Payment Date shall be one Business Day prior to such Interest
Payment Date. If an Interest Payment Date is not a Business Day, interest on this Security shall be payable on the next day that
is a Business Day, with the same force and effect as if made on such Interest Payment Date, and without any interest or other payment
with respect to the delay. “Business Day” shall mean a day, other than a Saturday or Sunday, that is neither
a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in New York, New
York.

 

Except as described below
for the first Interest Period, on each Interest Payment Date, interest will be paid for the period commencing on and including
the immediately preceding Interest Payment Date and ending on and including the day immediately preceding that Interest Payment
Date. This period is referred to as an “Interest Period.” The first Interest Period will

 

    	 

    	 

    

commence on and include October 30, 2018
and end on and include April 29, 2019. Interest on this Security will be computed on the basis of a 360-day year of twelve
30-day months.

 

The interest rate on this
Security that will apply during an Interest Period will be as follows:

 

	 	
        Commencing October 30, 2018 and

        ending October 29, 2021
	 	3.50% per annum
	 	
        Commencing October 30, 2021 and

        ending October 29, 2022
	 	4.00% per annum
	 	
        Commencing October 30, 2022 and

        ending October 29, 2023
	 	5.00% per annum
	 	 	 	 

Any interest not
punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either
be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may
be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

Payment of interest
on this Security will be made in immediately available funds at the office or agency of the Company maintained for that purpose
in the City of Minneapolis, Minnesota in such coin or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that, at the option of the Company, payment of interest may
be paid by check mailed to the Person entitled thereto at such Person’s last address as it appears in the Security Register
or by wire transfer to such account as may have been designated by such Person. Payment of principal of and interest on this Security
at Maturity will be made against presentation of this Security at the office or agency of the Company maintained for that purpose
in the City of Minneapolis, Minnesota. Notwithstanding the foregoing, for so long as this Security is a Global Security registered
in the name of the Depositary, payments of principal and interest on this Security will be made to the Depositary by wire transfer
of immediately available funds.

This
Security is redeemable at the option of the Company, in whole but not in part, on any Optional Redemption Date at a Redemption
Price equal to 100% of the principal amount of this Security to be redeemed, plus any accrued but unpaid interest to, but excluding,
the Redemption Date. The “Optional Redemption Dates” are quarterly on the 30th day of each January,
April, July and October, commencing October 30, 2020 and ending July 30, 2023. Notice of any redemption will be mailed
at least 5 but not more than 30 days before the applicable Redemption Date to the Holder hereof. Unless the Company defaults in
the payment of the Redemption Price, on or after the Redemption Date, interest will cease to accrue on this Security or the portion
hereof called for redemption.

This
Security is not subject to repayment at the option of the Holder hereof prior to October 30, 2023. This Security is not entitled
to any sinking fund.

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Reference
is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.

Unless the certificate
of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature or its duly authorized
agent under the Indenture referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

 

 

[The remainder of this page has
been left intentionally blank]

 

    	 	3	 

    	 

    

IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

DATED:  ______________________________

 

	 	WELLS FARGO & COMPANY
	 	 	 
	 	 	 
	 	By:	 
	 	 	 
	 	 	Its:  	 
	 	 	 
	 	 	 
	 	Attest:	 
	 	 	 
	 	 	Its:  	

 

 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

This is one of the Securities of the

series designated therein described

in the within-mentioned Indenture.

 

	CITIBANK, N.A.,	 
	 	as Trustee	 
	 	 	 
	By:	 	 
	 	Authorized Signature	 
	 	 	 
	OR	 
	 	 	 
	WELLS FARGO BANK, N.A.,	 
	 	as Authenticating Agent for the Trustee	 
	 	 	 
	By:	 	 
	 	Authorized Signature	 

 

 

    	 	4	 

    	 

    

[Reverse of Note]

 

 

WELLS FARGO & COMPANY

 

MEDIUM-TERM NOTE, SERIES T

 

Due Nine Months or More From Date of Issue

 

Notes due October 30, 2023

 

This Security is
one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to
be issued in one or more series under an indenture dated as of February 21, 2017, as amended or supplemented from time to
time (herein called the “Indenture”), between the Company and Citibank, N.A., as Trustee (herein called the
“Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are
to be, authenticated and delivered. This Security is one of the series of the Securities designated as Medium-Term Notes, Series T,
of the Company. The Securities of this series will bear interest at a fixed rate or a floating rate. The Securities of this series
may mature at different times, be redeemable at different times or not at all, be repayable at the option of the Holder at different
times or not at all and be denominated in different currencies.

The Securities are
issuable only in registered form without coupons and will be either (a) book-entry securities represented by one or more
Global Securities recorded in the book-entry system maintained by the Depositary or (b) certificated securities issued to and
registered in the names of, the beneficial owners or their nominees.

The Company agrees,
to the extent permitted by law, not to voluntarily claim the benefits of any laws concerning usurious rates of interest against
a Holder of this Security.

Modification and Waivers 

The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company
and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of all
series to be affected, acting together as a class. The Indenture also contains provisions permitting the Holders of a majority
in principal amount of the Securities of all series at the time Outstanding affected by certain provisions of the Indenture, acting
together as a class, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with those provisions
of the Indenture. Certain past defaults under the Indenture and their consequences may be waived under the Indenture by the Holders
of a majority in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities
of such series. Any such consent or waiver by the Holder of this Security shall be conclusive and binding

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upon such Holder and upon all future
Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this Security.

Defeasance

Section 403
and Article Fifteen of the Indenture and the provisions of clause (ii) of Section 401(1)(B) of the Indenture, relating
to defeasance at any time of (a) the entire indebtedness on this Security and (b) certain restrictive covenants, upon
compliance by the Company with certain conditions set forth therein, shall not apply to this Security. The remaining provisions
of Section 401 of the Indenture shall apply to this Security.

Authorized Denominations

This Security is
issuable only in registered form without coupons in denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000.

Registration of Transfer

Upon due presentment
for registration of transfer of this Security at the office or agency of the Company in the City of Minneapolis, Minnesota, a new
Security or Securities of this series, with the same terms as this Security, in authorized denominations for an equal aggregate
principal amount will be issued to the transferee in exchange herefor, as provided in the Indenture and subject to the limitations
provided therein and to the limitations described below, without charge except for any tax or other governmental charge imposed
in connection therewith.

This Security is
exchangeable for definitive Securities in registered form only if (x) the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary for this Security or if at any time the Depositary ceases to be a clearing agency registered
under the Securities Exchange Act of 1934, as amended, and a successor depositary is not appointed within 90 days after the
Company receives such notice or becomes aware of such ineligibility, (y) the Company in its sole discretion determines that
this Security shall be exchangeable for definitive Securities in registered form and notifies the Trustee thereof or (z) an Event
of Default with respect to the Securities represented hereby has occurred and is continuing. If this Security is exchangeable pursuant
to the preceding sentence, it shall be exchangeable for definitive Securities in registered form, bearing interest at the same
rate, having the same date of issuance, Stated Maturity Date and other terms and of authorized denominations aggregating a like
amount.

This Security may
not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor of the Depositary or a
nominee of such successor. Except as provided above, owners of beneficial interests in this Global Security will not be entitled
to receive physical delivery of Securities in definitive form and will not be considered the Holders hereof for any purpose under
the Indenture.

Prior to due presentment
of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this

    	 	6	 

    	 

    

Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.

Obligation of the Company Absolute

No reference herein
to the Indenture and no provision of this Security or the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and interest on this Security at the times, place and rate, and in the coin
or currency, herein prescribed, except as otherwise provided in this Security.

No Personal Recourse

No recourse shall
be had for the payment of the principal of or the interest on this Security, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder,
officer or director, as such, past, present or future, of the Company or any successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly waived and released.

Defined Terms

All terms used in
this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture unless otherwise defined
in this Security.

Governing Law

This Security shall
be governed by and construed in accordance with the law of the State of New York, without regard to principles of conflicts of
laws.

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ABBREVIATIONS

 

 

The
following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written
out in full according to applicable laws or regulations:

 

	TEN COM	--	as tenants in common
	 	 	 
	TEN ENT	--	as tenants by the entireties
	 	 	 
	JT TEN	--	as joint tenants with right
	 	 	of survivorship and not
	 	 	as tenants in common

 

	UNIF GIFT MIN ACT --	 	 Custodian 	 
	 	(Cust)	 	(Minor)

 

	Under Uniform Gifts to Minors Act	 
	 	 
	 	 
	(State)	 

 

Additional abbreviations
may also be used though not in the above list.

 

FOR VALUE RECEIVED,
the undersigned hereby sell(s) and transfer(s) unto

 

	Please Insert Social Security or	 
	Other Identifying Number of Assignee
	 	 
	 	 

 

 

	 
	 
	 

(Please
print or type name and address including postal zip code of Assignee)

 

 

    	 	8	 

    	 

    

the within Security of WELLS FARGO & COMPANY
and does hereby irrevocably constitute and appoint __________________ attorney to transfer the said Security on the books of the
Company, with full power of substitution in the premises.

 

 

	Dated:  	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

 

 

NOTICE: The signature to this assignment must
correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement
or any change whatever.

 

 

    	 	9Exhibit 10.1

 

Execution Version

 

AMENDED AND RESTATED

TRANSACTION SUPPORT AGREEMENT

 

This Amended and Restated Transaction Support Agreement (together with the exhibits and schedules attached hereto, which include, without limitation, the Term Sheet (as defined below),(1) as each may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof, this “Amended Agreement”), dated as of October 30, 2018, is entered into by and among:  (i) Ascent Capital Group, Inc. (“Ascent”) and Monitronics International, Inc. (together with its subsidiaries, “Monitronics”); (ii)  the beneficial owners (or nominees, investment managers, advisors or subadvisors for the beneficial owners) (each, a “Noteholder”) of the 9.125% Senior Notes due 2020 (the “Notes”) issued pursuant to that certain Indenture dated as of March 23, 2012 (as amended, restated, modified, supplemented, or replaced from time to time in accordance with the terms thereof, the “Notes Indenture”), by and among Monitronics, the guarantors named thereunder, and U.S. Bank National Association, as trustee, that are (and any Noteholder that may become a Consenting Noteholder in accordance with Section 14(a) hereof) signatories hereto (each, a “Consenting Noteholder” and collectively, the “Consenting Noteholders”); and (iii) the lenders for the Term B-2 Loans under the Credit Agreement (each, a “Term B-2 Lender”) that are (and any Term B-2 Lender that may become a Consenting Term B-2 Lender in accordance with Section 14(b)) signatories hereto (each, a “Consenting Term B-2 Lender” and collectively, the “Consenting Term B-2 Lenders”).  This Amended Agreement collectively refers to Ascent, Monitronics, the Consenting Noteholders, and the Consenting Term B-2 Lenders as the “Parties” and each individually as a “Party.”

 

RECITALS

 

WHEREAS, Ascent, Monitronics, and the Consenting Noteholders entered into (i) that certain Transaction Support Agreement, dated as of September 24, 2018, and (ii) that certain First Amendment to Transaction Support Agreement, dated as of October 16, 2018;

 

WHEREAS, each of Ascent, Monitronics and the Requisite Consenting Noteholders agreed to further amend the Transaction Support Agreement and to have the Consenting Term B-2 Lenders join this Amended Agreement in accordance with and subject to the terms hereof;

 

WHEREAS, the Parties have engaged in good faith, arm’s-length negotiations and agreed to enter into certain transactions pursuant to the terms and conditions set forth in this Amended Agreement and in the term sheet attached hereto as Exhibit A (the “Term Sheet”) incorporated herein by reference pursuant to Section 2 hereof;

 

WHEREAS, as of the date hereof, the Consenting Noteholders, in the aggregate, hold approximately 66% of the aggregate outstanding principal amount of the Notes;

 

WHEREAS, as of the date hereof, the Consenting Term B-2 Lenders in the aggregate, hold not less than 50.1% of the aggregate outstanding principal amount of the Term B-2 Loans.

 

(1)         Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the Term Sheet.

 

 

NOW, THEREFORE, in consideration of the promises, mutual covenants, and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Parties, intending to be legally bound, hereby agrees as follows:

 

AGREEMENT

 

1.                                      TSA Effective Date.  This Amended Agreement shall become effective, and the obligations contained herein shall become binding upon the Parties, upon the first date (such date, the “TSA Effective Date”) that this Amended Agreement has been executed by all of the following:  (i) Ascent; (ii) Monitronics; (iii) Requisite Consenting Noteholders to provide the requisite consent for all Consenting Noteholders holding, in the aggregate, at least 65% in principal amount outstanding of all Notes; and (iv) Consenting Term B-2 Lenders holding in the aggregate at least 50.1% in principal amount outstanding of the Term B-2 Loans.  With respect to any Consenting Noteholder or any Consenting Term B-2 Lender that becomes a party to this Amended Agreement pursuant to Section 14 hereof, this Amended Agreement shall become effective as to such Consenting Noteholder or Consenting Term B-2 Lender, as applicable, at the time it executes and delivers a Transferee Joinder or Loan Transferee Joinder in accordance with Section 14 hereof.

 

2.                                      Exhibits and Schedules Incorporated by Reference.  Each of the exhibits attached hereto (including the Term Sheet) and any schedules to such exhibits (collectively, the “Exhibits”) is expressly incorporated herein and made a part of this Amended Agreement, and all references to this Amended Agreement shall include the Exhibits.  In the event of any inconsistency between this Amended Agreement (without reference to the Term Sheet) and the Term Sheet, the Term Sheet shall govern.

 

3.                                      Certain Defined Terms.  As used in this Amended Agreement:

 

(a)                                 “Aggregate Backstop Amount” shall mean a dollar amount (rounded down to the nearest dollar) equal to the quotient of (a)(i) $100,000,000 minus (ii) the product of (x) the Dutch Auction Price divided by 1,000 times (y) the aggregate principal amount of all Tendered Notes, divided by (b) 0.875, which amount shall not be less than zero.

 

(b)                                 “Backstop Amount” shall mean, with respect to any Consenting Noteholder, a dollar amount (rounded down to the nearest $1,000) equal to (x) such Consenting Holder’s Backstop Percentage times (y) the Aggregate Backstop Amount.”

 

(c)                                  “Backstop Percentage” shall mean, with respect to any Consenting Noteholder, the quotient, expressed as a percentage, of (x) the aggregate principal amount of Notes that such Consenting Noteholder tenders in the Unsecured Exchange (without giving effect to Section 8 of this Amended Agreement), divided by (y) the aggregate principal amount of all Notes that all Consenting Noteholders tender in the Unsecured Exchange (without giving effect to Section 8 of this Amended Agreement).

 

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(d)                                 “Credit Agreement” shall mean that certain Amended and Restated Credit Agreement, dated as of March 23, 2012 (as amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms thereof), by and among Monitronics, as borrower, the guarantors party thereto, Bank of America, N.A., as administrative agent, and the lenders from time to time party thereto.

 

(e)                                  “Dutch Auction” shall mean a modified ‘Dutch Auction’ tender offer conducted by Ascent pursuant to (and consistent in all material respects with) the Unsecured Exchange Term Sheet.

 

(f)                                   “Dutch Auction Price” shall mean the dollar amount per $1,000 in principal amount of Notes at which Ascent is required to accept and purchase the Tendered Notes, as determined pursuant to the terms and conditions of the Dutch Auction, which amount shall not be less than $750 nor more than $875.

 

(g)                                  “Requisite Consenting Noteholders” shall mean, as of any date of determination on or after the TSA Effective Date, Consenting Noteholders holding at least 66-2/3% of the outstanding Notes held by all Consenting Noteholders as of such date of determination.

 

(h)                                 “Requisite Consenting Term B-2 Lenders” shall mean, as of any date of determination on or after the TSA Effective Date, Consenting Term B-2 Lenders holding at least 66-2/3% of the outstanding Term B-2 Loans held by all Consenting Term B-2 Lenders as of such date of determination.

 

(i)                                     “Second Lien Exchange Transaction” shall mean transactions consistent in all material respects with the Second Lien Term Sheet.

 

(j)                                    “Second Lien Term Sheet” shall mean the ‘Second Lien Transactions Overview’ set forth in the Term Sheet.

 

(k)                                 “SUN Exchange Offer” shall mean an offer to exchange the Notes for New Second Lien Notes to be issued by Monitronics as contemplated by the Second Lien Term Sheet (a “Second Lien Exchange”); provided, that if on or prior to the Toggle Trigger Time, Monitronics has not obtained the requisite consents to the Bank Amendments, following the Toggle Trigger Time, a “SUN Exchange Offer” shall mean an offer to exchange the Notes for cash and new unsecured notes of Monitronics as contemplated by the Unsecured Exchange Term Sheet.  For the avoidance of doubt, if on or prior to the Toggle Trigger Time Monitronics obtains the requisite consents to the Bank Amendments, “SUN Exchange Offer” shall at all times mean a Second Lien Exchange.

 

(l)                                     “Tendered Notes” shall mean all Notes that are validly tendered (and not validly withdrawn) in the Dutch Auction as of the expiration thereof and that Ascent is (pursuant to the terms and conditions thereof, without giving effect to Section 8 of this Amended Agreement) required to accept for purchase therein.

 

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(m)                             “Toggle Trigger Time” shall mean 11:59 p.m. prevailing Eastern time on November 2, 2018.

 

(n)                                 “Transactions” shall mean a Second Lien Exchange Transaction; provided, that if on or prior to the Toggle Trigger Time Monitronics has not obtained the requisite consents to the Bank Amendments, following the Toggle Trigger Time, “Transactions” shall mean an Unsecured Exchange Transaction.  For the avoidance of doubt, if on or prior to the Toggle Trigger Time Monitronics obtains the requisite consents to the Bank Amendments, “Transactions” shall at all times mean a Second Lien Exchange Transaction.

 

(o)                                 “Unsecured Exchange” shall mean the SUN Exchange Offer (excluding the Dutch Auction component thereof), on the terms and conditions applicable thereto from and after the Toggle Trigger Time, if applicable, conducted pursuant to (and consistent in all material respects with) the Unsecured Exchange Term Sheet.

 

(p)                                 “Unsecured Exchange Term Sheet” shall mean the ‘Unsecured Exchange Transaction Overview’ set forth in the Term Sheet.

 

(q)                                 “Unsecured Exchange Transaction” shall mean transactions consistent in all material respects with the Unsecured Exchange Term Sheet.

 

4.                                      Definitive Documentation.  The definitive documents and agreements (the “Definitive Documentation”) governing the Transactions shall include, but not be limited to, any offering memoranda prepared in connection with the Transactions, any indenture and security documents with respect to the New Senior Unsecured Notes and the New Second Lien Notes, as applicable, any supplemental indenture in respect of the Notes, any amendments, waivers and/or consents with respect to the Notes or the Credit Agreement, including the Bank Amendments, all related transactional or corporate documents, including the intercreditor agreement, and any other documents or agreements executed, delivered and/or filed in connection with the Transactions.  The Definitive Documentation (including any amendment, supplement or modification thereto) identified in the foregoing sentence remains subject to negotiation and shall, upon completion, contain terms, conditions, representations, warranties, and covenants consistent with the terms of this Amended Agreement and shall otherwise be in form and substance reasonably satisfactory to Ascent, Monitronics, the Requisite Consenting Noteholders, and the Requisite Consenting Term B-2 Lenders.

 

5.                                      Commitment of Consenting Noteholders.  Each Consenting Noteholder shall (severally and not jointly), solely for so long as it remains a Noteholder, from the TSA Effective Date until the occurrence of the Termination Date (as defined below) and subject to Section 14 hereto:

 

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(a)                                 subject to such Consenting Noteholder’s receipt of the offering memorandum prepared in connection with the Transactions, tender or cause to be tendered all Notes (other than Notes in denominations of less than $1,000, if applicable) held by such Consenting Noteholder and provide any consents in respect of the Notes, in each case, in accordance with the terms and conditions of this Amended Agreement prior to the tender time with respect to the SUN Exchange Offer; provided, that such Consenting Noteholder may withdraw its Notes from the SUN Exchange Offer in accordance with the terms and conditions of the SUN Exchange Offer in order to effect a Transfer (as defined below) of such Notes in compliance with Section 14 hereof;

 

(b)                                 not withdraw or revoke its tender, consent and/or vote with respect to the SUN Exchange Offer, except as otherwise expressly permitted pursuant to this Amended Agreement;

 

(c)                                  take all commercially reasonable actions, and support and cooperate with Ascent and Monitronics to take all commercially reasonable actions, necessary to consummate the Transactions in accordance with the terms and conditions of this Amended Agreement, including without limitation to vote in favor of, or otherwise support, the Transactions with respect to any debt or other securities of Ascent or Monitronics that such Consenting Noteholder may hold; provided that (i) the foregoing shall not limit or restrict, in any respect, any consent or approval rights provided under this Amended Agreement or the Definitive Documentation and (ii) no Consenting Noteholder shall be obligated to waive (to the extent waivable by such Consenting Noteholder) any condition to the consummation of any part of the Transactions set forth in any Definitive Documentation;

 

(d)                                 not directly or indirectly object to, delay, impede, or take any other action to interfere with the Transactions;

 

(e)                                  not take any action (or encourage or instruct any other party including any agent or indenture trustee to take any action) in respect of any potential, actual, or alleged occurrence of any “Default” or “Event of Default” under the Notes Indenture that is triggered or that would be triggered as a result of the execution of this Amended Agreement or the undertaking of Ascent or Monitronics hereunder to implement the Transactions; and

 

(f)                                   not take any other action that is materially inconsistent with its obligations under this Amended Agreement.

 

Notwithstanding the foregoing, nothing in this Amended Agreement shall (u) be construed to prohibit any Consenting Noteholder from contesting whether any matter, fact, or thing is a breach of, or is inconsistent with, this Amended Agreement or the Definitive Documentation, (v) affect the ability of any Consenting Noteholder to consult with other Consenting Noteholders or Ascent or Monitronics, (w) impair or waive the rights of any Consenting Noteholder to

 

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enforce this Amended Agreement against Ascent, Monitronics, any other Consenting Noteholder or any Consenting Term B-2 Lender, (x) limit (i) the rights of a Consenting Noteholder in any applicable bankruptcy, insolvency, foreclosure or similar proceeding, including appearing as a party in interest in any matter to be adjudicated in order to be heard concerning any matter arising in any chapter 11 case of any of Ascent or Monitronics or any of their material subsidiaries, (ii) the ability of a Consenting Noteholder to purchase or sell the Notes or any other claims or interests against any of Ascent, Monitronics or any of their respective subsidiaries, subject in all such cases to the terms hereof, (iii) except to the extent any such right or remedy would conflict or be inconsistent with this Amended Agreement, any right or remedy of any Consenting Noteholder under, as applicable, (A)  any of the documents governing the Notes, and (B) any other applicable agreement, instrument or document that gives rise to a Consenting Noteholder’s claims or interests against any of Ascent, Monitronics or any of their respective subsidiaries; (iv) the rights of any Consenting Noteholder to engage in any discussions, enter into any agreements or take any other action after the Termination Date; or (v) the ability of a Consenting Noteholder to enforce any right, remedy, condition, consent or approval requirement under this Amended Agreement or any Definitive Documentation; (y) constitute a waiver or amendment of any term or provision of (i) any of the Notes Indenture or any other document governing the Notes, or (ii) any other agreement, instrument or document that gives rise to a Consenting Noteholder’s claims or interests against any of Ascent, Monitronics or any of their respective subsidiaries; or (z) be construed to require any Consenting Noteholder to incur, assume, become liable in respect of or suffer to exist any expenses, liabilities or other obligations, or agree to or become bound by any commitments, undertakings, concessions, indemnities or other arrangements that could result in expenses, liabilities or other obligations to such Consenting Noteholder, other than those set forth in this Amended Agreement.

 

6.                                      Commitment of Consenting Term B-2 Lenders.  Each Consenting Term B-2 Lender shall (severally and not jointly), solely for so long as it remains a Term B-2 Lender, from the TSA Effective Date until the occurrence of the Termination Date (as defined below) and subject to Section 14 hereto:

 

(a)                                 subject to such Consenting Term B-2 Lender’s receipt of the Bank Amendments prepared in connection with the Transactions, timely provide any consents and execute the Bank Amendments in respect of the Term B-2 Loans, in each case, in accordance with the terms and conditions of this Amended Agreement upon presentation by the Administrative Agent of such consent or Bank Amendments;

 

(b)                                 not withdraw or revoke its consent or signature to the Bank Amendments, except as otherwise expressly permitted pursuant to this Amended Agreement;

 

(c)                                  take all commercially reasonable actions, and support and cooperate with Ascent and Monitronics to take all commercially reasonable actions, necessary to consummate the Transactions in accordance with the terms and conditions of this Amended Agreement, including without limitation to vote in favor of, or otherwise support, the Transactions with respect to any debt or other securities of Ascent or Monitronics that such Consenting

 

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Term B-2 Lender may hold; provided that (i) the foregoing shall not limit or restrict, in any respect, any consent or approval rights provided under this Amended Agreement or the Definitive Documentation and (ii) no Consenting Term B-2 Lender shall be obligated to waive (to the extent waivable by such Consenting Term B-2 Lender) any condition to the consummation of any part of the Transactions set forth in any Definitive Documentation;

 

(d)                                 not directly or indirectly object to, delay, impede, or take any other action to interfere with the Transactions;

 

(e)                                  not take any action (or encourage or instruct any other party including any agent or indenture trustee to take any action) in respect of any potential, actual, or alleged occurrence of any “Default” or “Event of Default” under the Credit Agreement that is triggered or that would be triggered as a result of the execution of this Amended Agreement or the undertaking of Ascent or Monitronics hereunder to implement the Transactions; and

 

(f)                                   not take any other action that is materially inconsistent with its obligations under this Amended Agreement.

 

Notwithstanding the foregoing, nothing in this Amended Agreement shall (u) be construed to prohibit any Consenting Term B-2 Lender from contesting whether any matter, fact, or thing is a breach of, or is inconsistent with, this Amended Agreement or the Definitive Documentation, (v) affect the ability of any Consenting Term B-2 Lender to consult with other Consenting Term B-2 Lenders, Ascent or Monitronics, (w) impair or waive the rights of any Consenting Term B-2 Lender to enforce this Amended Agreement against Ascent, Monitronics, any Consenting Noteholder or any other Consenting Term B-2 Lender, (x) limit (i) the rights of a Consenting Term B-2 Lender in any applicable bankruptcy, insolvency, foreclosure or similar proceeding, including appearing as a party in interest in any matter to be adjudicated in order to be heard concerning any matter arising in any chapter 11 case of any of Ascent or Monitronics or any of their material subsidiaries, (ii) the ability of a Consenting Term B-2 Lender, to purchase or sell the Term B-2 Loans or any other claims or interests against any of Ascent, Monitronics or any of their respective subsidiaries, subject in all such cases to the terms hereof, (iii) except to the extent any such right or remedy would conflict or be inconsistent with this Amended Agreement, any right or remedy of any Consenting Term B-2 Lender under, as applicable, (A)  any of the Loan Documents (as defined in the Credit Agreement), and (B) any other applicable agreement, instrument or document that gives rise to a Consenting Term B-2 Lender’s claims or interests against any of Ascent, Monitronics or any of their respective subsidiaries; (iv) the rights of any Consenting Term B-2 Lender to engage in any discussions, enter into any agreements or take any other action after the Termination Date; or (v) the ability of a Consenting Term B-2 Lender to enforce any right, remedy, condition, consent or approval requirement under this Amended Agreement or any Definitive Documentation; (y) constitute a waiver or amendment of any term or provision of (i) the Loan Documents or (ii) any other agreement, instrument or document that gives rise to a Consenting Term B-2 Lender’s claims or interests against any of Ascent, Monitronics or any of their respective subsidiaries; or (z) be construed to require any Consenting Term B-2 Lender to incur, assume, become liable in respect of or suffer to exist any expenses,

 

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liabilities or other obligations, or agree to or become bound by any commitments, undertakings, concessions, indemnities or other arrangements that could result in expenses, liabilities or other obligations to such Consenting Term B-2 Lender, other than those set forth in this Amended Agreement.

 

7.                                      Commitment of Ascent and Monitronics.  Each of Ascent and Monitronics shall (jointly and severally), from the TSA Effective Date until the occurrence of the Termination Date:

 

(a)                                 timely take all commercially reasonable actions necessary or reasonably requested by the Requisite Consenting Noteholders or the Requisite Consenting Term B-2 Lenders to complete the Transactions in accordance with the terms and conditions of this Amended Agreement and the Definitive Documentation; provided, however, that Monitronics shall not accept tenders of Notes or consummate the SUN Exchange Offer unless and until all of the conditions to the closing of the Transactions (including the SUN Exchange Offer) set forth in the offering memorandum, the Bank Amendments, and the other Definitive Documentation have been satisfied or waived (other than conditions that, by their nature, are to be satisfied or waived at the closing of the Transactions, but subject to their being satisfied or waived contemporaneously with such closing) in accordance with the terms of such offering memorandum, Bank Amendments, or other Definitive Documentation, as applicable;

 

(b)                                 (i) negotiate in good faith, execute and deliver, and perform its obligations under this Amended Agreement and the Definitive Documentation to which it is (or will be) a party; provided, however, that (A) the foregoing shall not limit or restrict, in any respect, any consent or approval rights provided under this Amended Agreement or the Definitive Documentation and (B) neither Ascent nor Monitronics shall be obligated to waive (to the extent waivable by such Party) any closing condition set forth in any Definitive Documentation, and (ii) take any and all necessary and appropriate actions in furtherance of this Amended Agreement and the consummation of the Transactions;

 

(c)                                  prior to the Toggle Trigger Time, use good faith efforts customary for transactions similar to the Bank Amendments to obtain the required consents or approvals in connection with the Bank Amendments;

 

(d)                                 comply with each of the following milestones (the “Milestones”), which Milestones may only be extended pursuant to a further written agreement among Ascent, Monitronics, the Requisite Consenting Noteholders and the Requisite Consenting Term B-2 Lenders:

 

(i)                                     launch the SUN Exchange Offer pursuant to Definitive Documentation not later than November 2, 2018;

 

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(ii)                                  commence solicitation with respect to the Bank Amendments pursuant to Definitive Documentation not later than October 30, 2018; and

 

(iii)                               consummate the Transactions on or prior to December 12, 2018;

 

(e)                                  not execute, deliver or file, or solicit consents or tenders pursuant to, any Definitive Documentation that, in whole or in part, is not consistent in all material respects with this Amended Agreement or is not otherwise acceptable to the Requisite Consenting Noteholders, the Requisite Consenting Term B-2 Lenders, Ascent and Monitronics;

 

(f)                                   make commercially reasonable efforts to obtain any and all required regulatory and/or third-party approvals or consents necessary to consummate the Transactions;

 

(g)                                  not directly or indirectly object to, delay, impede, or take any other action to interfere with the Transactions;

 

(h)                                 not seek, solicit, support, encourage, propose, assist, consent to, vote for, enter into, participate in, pursue or consummate (i) any reorganization, merger, consolidation, tender offer, exchange offer, business combination, joint venture, partnership, sale of a material portion of assets, financing (whether debt or equity), recapitalization or restructuring of any of Ascent, Monitronics or any of their respective subsidiaries, other than the Transactions (each, an “Alternative Transaction”) or (ii) any substantive discussions (other than as to respond to any such Person to advise such Person that it does not intend to engage in such discussions), subject to the appropriate exercise of Ascent’s or Monitronics’ fiduciary duties, or any agreement with any individual, partnership, joint venture, limited liability company, corporation, trust, unincorporated organization, group, governmental entity, or legal entity or association (each, a “Person”) regarding an Alternative Transaction; provided, however, that notwithstanding anything to the contrary herein, the Unsecured Exchange Transaction shall constitute an Alternative Transaction prior to the Toggle Trigger Time;

 

(i)                                     if Ascent or Monitronics (or any director, manager, officer, agent or representative thereof, as applicable) receives an unsolicited proposal or expression of interest with respect to any Alternative Transaction, within one (1) business day after the receipt of such proposal or expression of interest, notify the Consenting Noteholder Advisors (as defined below) and the Consenting Term B-2 Lender Advisors (as defined below) of the receipt thereof, with such notice to include the material terms thereof;

 

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(j)                                    not undertake any action materially inconsistent with the consummation and implementation of the Transactions or with its obligations under this Amended Agreement;

 

(k)                                 subject in each case to each of Ascent’s and Monitronics’s compliance with and observation of its fiduciary duties (i) conduct, and shall cause their respective subsidiaries to conduct, their businesses and operations only in the ordinary course in a manner that is consistent with past practices and in compliance with applicable law, (ii) maintain their respective books and records in the ordinary course, in a manner that is consistent with past practices, and in compliance with applicable law, (iii) maintain all insurance policies, or suitable replacements therefor, in full force and effect, in the ordinary course, in a manner that is consistent with past practices, and in compliance with applicable law, and (iv) use commercially reasonable efforts to preserve intact their business organizations and relationships with third parties (including creditors, lessors, licensors, suppliers, distributors and customers) and employees in the ordinary course, in a manner that is consistent with past practices, and in compliance with applicable law; and

 

(l)                                     (i) promptly pay when due the reasonable and documented fees, costs and expenses of Stroock & Stroock & Lavan LLP (“Stroock”) and Houlihan Lokey Capital, Inc., as advisors to that certain ad hoc group of holders of the Notes (together, the “Consenting Noteholder Advisors”) in accordance with the terms and conditions of their executed engagement letters and (ii) promptly (and not later than three business days following the TSA Effective Date with respect to accrued fees as of that date, and no later than upon closing with respect to the balance of the fees and expenses) pay the reasonable and documented fees, costs and expenses of Jones Day (“Jones Day”) and Evercore Inc. as advisors to that certain ad hoc group of Term B-2 Lenders (the “Consenting Term B-2 Lenders Advisors”).

 

8.                                      Backstop Commitments. In the Unsecured Exchange Transaction, in the event the Dutch Auction is conducted and the aggregate purchase price of all Tendered Notes is less than $100,000,000 (such shortfall, a “Dutch Auction Shortfall”), then on and subject to the terms and conditions of this Amended Agreement:

 

(a)                                 Ascent shall provide written notice thereof to each Consenting Noteholder (with a copy to the Consenting Noteholder Advisors) as promptly as practicable (and in no event more than 3 Business Days) after expiration of the Dutch Auction, which notice shall set forth the amount of the Dutch Auction Shortfall, the Aggregate Backstop Amount and such Consenting Noteholder’s Backstop Amount;

 

(b)                                 Each Consenting Noteholder hereby agrees, severally and not jointly, that a portion of the Notes that is tendered into the Unsecured Exchange, in an aggregate principal amount equal to its respective Backstop Amount (the

 

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“Backstop Notes”), shall automatically be deemed, for all purposes of this Amended Agreement, the Dutch Auction, and the Unsecured Exchange, to have been validly tendered by such Consenting Noteholder in the Dutch Auction (in lieu of having been tendered in the Unsecured Exchange) at a purchase price equal to $875 per $1,000 in principal amount of such Notes; provided, however, that such deemed tender shall not affect the calculation of the Dutch Auction Price or the payment thereof for any other Notes that are accepted and purchased by Ascent in the Dutch Auction; and

 

(c)                                  Ascent and Monitronics hereby agree that each Consenting Noteholder’s Backstop Notes shall automatically be deemed, for all purposes of this Amended Agreement, the Dutch Auction and the Unsecured Exchange, to have been validly tendered into the Dutch Auction (in lieu of having been tendered in the Unsecured Exchange) by such Consenting Noteholder, at a purchase price equal to $875 per $1,000 in principal amount of such Notes, and Ascent shall accept and purchase all such Backstop Notes at such price and otherwise pursuant to and in accordance with the terms of the Dutch Auction at such price; provided, however, that such deemed tender shall not affect the calculation of the Dutch Auction Price or the payment thereof for any other Notes that are accepted and purchased by Ascent in the Dutch Auction.

 

Nothing contained in this Section 8 shall in any way restrict or limit any Consenting Noteholder’s right or ability to otherwise participate in the Dutch Auction pursuant to the terms and conditions thereof, at a price equal to $875 per $1,000 in principal amount, or at any lower price.

 

9.                                      Consenting Noteholder Termination Events.  The Requisite Consenting Noteholders, in their sole discretion, may terminate this Amended Agreement with respect to the Consenting Noteholders (a “Consenting Noteholder Termination”) upon or at any time following the occurrence of any of the following events (each, a “Consenting Noteholder Termination Event”), by giving written notice of such termination to each of the other Parties, and such termination shall be effective immediately upon delivery of such written notice to each of the other Parties in accordance with Section 25 hereof, except to the extent that such Consenting Noteholder Termination Event has been waived in writing by the Requisite Consenting Noteholders in their sole discretion:

 

(a)                                 Any of the Definitive Documentation is amended or modified in a manner that is inconsistent with this Amended Agreement, and such amendment or modification has not been revoked or withdrawn within three (3) business days of written notice from the Requisite Consenting Noteholders (which notice may be provided by Stroock at the direction of the Requisite Consenting Noteholders) to the other Parties hereto;

 

(b)                                 the issuance by any governmental authority, any regulatory authority, or any court of competent jurisdiction, of any ruling or order enjoining the

 

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substantial consummation of the Transactions on the terms and conditions set forth in this Amended Agreement, the Term Sheet and the Definitive Documentation; provided, however, that any Party shall have five (5) business days after issuance of such ruling or order to obtain relief that would allow consummation of the Transactions in a manner that (i) does not prevent or diminish in a material way compliance with the terms of this Amended Agreement, and (ii) is acceptable to the Requisite Consenting Noteholders in their reasonable discretion;

 

(c)                                  the breach in any material respect (without giving effect to any “materiality” qualifiers set forth therein) of any of Ascent, Monitronics or one or more of the Consenting Term B-2 Lenders (in the case of the Consenting Term B-2 Lenders, solely to the extent that the non-breaching Consenting Term B-2 Lenders own or control, in the aggregate, 50% or less of the aggregate principal amount of the Term B-2 Loans and solely in the context of the Second Lien Exchange Transaction) of any representation, warranty, or covenant of such Party set forth in this Amended Agreement (it being understood and agreed that any actions required to be taken by any Party that are included in the Term Sheet attached to this Amended Agreement but not in this Amended Agreement are to be considered “covenants” of such Party, and therefore covenants of this Amended Agreement, notwithstanding the failure of any specific provision in the Term Sheet to be re-copied in this Amended Agreement) that (to the extent curable) remains uncured for a period of five (5) business days after the receipt by such breaching Party of written notice of such breach from the Requisite Consenting Noteholders (which notice may be provided by Stroock at the direction of the Requisite Consenting Noteholders in accordance with Section 25);

 

(d)                                 Ascent or Monitronics terminates its respective obligations under and in accordance with Section 11 respectively, of this Amended Agreement;

 

(e)                                  the failure of any Definitive Documentation to comply with the requirements of Section 4 of this Amended Agreement, which non-compliance remains uncured for a period of three (3) business days after the receipt by the other Parties hereto of written notice of such non-compliance from the Requisite Consenting Noteholders (which notice may be provided by Stroock at the direction of the Requisite Consenting Noteholders);

 

(f)                                   the occurrence of any event, change, effect, occurrence, development, circumstance, condition, result, state of fact or change of fact that is not known as of the date hereof (each, an “Event”) that, individually or together with all other Events, has had, or would reasonably be expected to have, a material adverse effect as measured from the date hereof on the business, operations, finances, properties, condition (financial or otherwise), assets or liabilities of Ascent or Monitronics, taken as a whole,

 

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or their ability to perform their respective obligations under, or to consummate the Transactions contemplated by, this Amended Agreement, which material adverse effect remains uncured for a period of three (3) business days after the receipt by Ascent and Monitronics of written notice thereof from the Requisite Consenting Noteholders (which notice may be provided by Stroock at the direction of the Requisite Consenting Noteholders);

 

(g)                                  the occurrence of any “Event of Default” under the Notes Indenture or the Credit Agreement (subject to any applicable right to cure therein upon notice to the Consenting Noteholders or the Consenting Term B-2 Lenders, as applicable); or

 

(h)                                 the occurrence of any other material breach of this Amended Agreement not otherwise covered in the immediately preceding clauses (a) through and including (g) by any of Ascent, Monitronics or one or more of the Consenting Term B-2 Lenders (in the case of the Consenting Term B-2 Lenders, solely to the extent that the non-breaching Consenting Term B-2 Lenders own or control, in the aggregate, 50% or less of the aggregate principal amount of the Term B-2 Loans and solely with respect to the Second Lien Exchange Transaction) that has not been cured (if susceptible to cure) within five (5) business days after the receipt by Ascent,  Monitronics, and the Consenting Term B-2 Lenders of written notice of such breach from the Requisite Consenting Noteholders (which notice may be provided by Stroock at the direction of the Requisite Consenting Noteholders in accordance with Section 25).

 

Notwithstanding the foregoing, upon a Consenting Noteholder Termination pursuant to the foregoing subsections 9(c) or 9(h) resulting from a breach by any of the Consenting Term B-2 Lenders, the Amended Agreement shall not terminate with respect to the Consenting Noteholders; provided however, that the obligations of the Consenting Noteholders hereunder shall thereafter only be with respect to an Unsecured Exchange Transaction.

 

10.                               Consenting Term B-2 Lender Termination Events.  The Requisite Consenting Term B-2 Lenders, in their sole discretion, may terminate this Amended Agreement with respect to the Consenting Term B-2 Lenders (a “Consenting Term B-2 Lender Termination”) upon or at any time following the occurrence of any of the following events (each, a “Consenting Term B-2 Lender Termination Event”), by giving written notice of such termination to each of the other Parties, and such termination shall be effective immediately upon delivery of such written notice to each of the other Parties in accordance with Section 25 hereof, except to the extent that such Consenting Term B-2 Lender Termination Event has been waived in writing by the Requisite Consenting Term B-2 Lenders in their sole discretion:

 

(a)                                 Any of the Definitive Documentation is amended or modified in a manner that is inconsistent with this Amended Agreement, and such amendment or modification has not been revoked or withdrawn within three (3) business days of written notice from the Requisite Consenting Term B-2

 

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Lenders (which notice may be provided by Jones Day at the direction of the Requisite Consenting Term B-2 Lenders) to the other Parties hereto;

 

(b)                                 the issuance by any governmental authority, any regulatory authority, or any court of competent jurisdiction, of any ruling or order enjoining the substantial consummation of the Transactions on the terms and conditions set forth in this Amended Agreement, the Term Sheet and the Definitive Documentation; provided, however, that any Party shall have five (5) business days after issuance of such ruling or order to obtain relief that would allow consummation of the Transactions in a manner that (i) does not prevent or diminish in a material way compliance with the terms of this Amended Agreement, and (ii) is acceptable to the Requisite Consenting Term B-2 Lenders in their reasonable discretion;

 

(c)                                  the breach in any material respect (without giving effect to any “materiality” qualifiers set forth therein) of any of Ascent, Monitronics or one or more of the Consenting Noteholders (in the case of the Consenting Noteholders, solely to the extent that the non-breaching Consenting Noteholders own or control, in the aggregate, 50% or less of the aggregate principal amount of the Notes) of any representation, warranty, or covenant of such Party set forth in this Amended Agreement (it being understood and agreed that any actions required to be taken by any Party that are included in the Term Sheet attached to this Amended Agreement but not in this Amended Agreement are to be considered “covenants” of such Party, and therefore covenants of this Amended Agreement, notwithstanding the failure of any specific provision in the Term Sheet to be re-copied in this Amended Agreement) that (to the extent curable) remains uncured for a period of five (5) business days after the receipt by such breaching Party of written notice of such breach from the Requisite Consenting Term B-2 Lenders (which notice may be provided by Jones Day at the direction of the Requisite Consenting Term B-2 Lenders in accordance with Section 25);

 

(d)                                 Ascent, Monitronics, or the Requisite Consenting Noteholders as a group, terminates its respective obligations under and in accordance with Sections 9 or 11, respectively, of this Amended Agreement;

 

(e)                                  the failure of any Definitive Documentation to comply with the requirements of Section 4 of this Amended Agreement, which non-compliance remains uncured for a period of three (3) business days after the receipt by the other Parties hereto of written notice of such non-compliance from the Requisite Consenting Term B-2 Lenders (which notice may be provided by Jones Day at the direction of the Requisite Consenting Term B-2 Lenders);

 

(f)                                   the occurrence of any event, change, effect, occurrence, development, circumstance, condition, result, state of fact or change of fact that is not

 

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known as of the date hereof (each, an “Event”) that, individually or together with all other Events, has had, or would reasonably be expected to have, a material adverse effect as measured from the date hereof on the business, operations, finances, properties, condition (financial or otherwise), assets or liabilities of Ascent or Monitronics, taken as a whole, or their ability to perform their respective obligations under, or to consummate the Transactions contemplated by, this Amended Agreement, which material adverse effect remains uncured for a period of three (3) business days after the receipt by Ascent and Monitronics of written notice thereof from the Requisite Consenting Term B-2 Lenders (which notice may be provided by Jones Day at the direction of the Requisite Consenting Term B-2 Lenders);

 

(g)                                  the occurrence of any “Event of Default” under the Notes Indenture or the Credit Agreement (subject to any applicable right to cure therein upon notice to the Consenting Noteholders or the Consenting Term B-2 Lenders, as applicable); or

 

(h)                                 the occurrence of any other material breach of this Amended Agreement not otherwise covered in the immediately preceding clauses (a) through and including (g) by any of Ascent, Monitronics or one or more of the Consenting Noteholders (in the case of the Consenting Noteholders, solely to the extent that the non-breaching Consenting Noteholders own or control, in the aggregate, 50% or less of the aggregate principal amount of the Notes) that has not been cured (if susceptible to cure) within five (5) business days after the receipt by Ascent, Monitronics, and the Consenting Noteholders of written notice of such breach from the Requisite Consenting Term B-2 Lenders (which notice may be provided by Jones Day at the direction of the Requisite Consenting Term B-2 Lenders in accordance with Section 25).

 

11.                               Company Termination Events.  Each of Ascent and Monitronics, in its sole discretion, may terminate this Amended Agreement with respect to Ascent or Monitronics (a “Company Termination”) upon or at any time following the occurrence of any of the following events (each a “Company Termination Event”), by giving written notice of such termination to each of the other Parties and such termination shall be effective immediately upon delivery of such written notice to each of the other Parties in accordance with Section 25 hereof, except to the extent that such Company Termination Event has been waived in writing by Ascent and/or Monitronics in its sole discretion:

 

(a)                                 the breach in any material respect (without giving effect to any “materiality” qualifiers set forth therein) by one or more of the Consenting Noteholders or one or more of the Consenting Term B-2 Lenders of any representation, warranty, or covenant of such Consenting Noteholder(s) or Consenting Term B-2 Lender(s), as applicable, set forth in this Amended Agreement such that the non-breaching Consenting Noteholders, or non-breaching Consenting Term B-2 Lenders, as applicable, own or control, in

 

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the aggregate, 50% or less of the aggregate principal amount of the Notes or 50% or less of the aggregate principal amount of the Term B-2 Loans, as applicable that (to the extent curable) remains uncured for a period of five (5) business days after the receipt by such Consenting Noteholder(s) or Consenting Term B-2 Lender(s), as applicable, of written notice and description of such breach from Ascent or Monitronics;

 

(b)                                 the issuance by any governmental authority, any regulatory authority, or any court of competent jurisdiction, of any ruling or order enjoining the consummation of the Transactions on the terms and conditions set forth in this Amended Agreement, the Term Sheet and the Definitive Documentation; provided, however, that Ascent and Monitronics have made commercially reasonable, good faith efforts to cure, vacate, or have overruled such ruling or order prior to terminating this Amended Agreement and such ruling or order shall remain uncured, not vacated or not overruled for a period of at least five (5) business days;

 

(c)                                  the Requisite Consenting Noteholders terminate their obligations under and in accordance with Section 9 of this Amended Agreement (it being understood that termination by the Requisite Consenting Term B-2 Lenders shall not terminate the right and the obligations of the remaining Parties to engage in the Unsecured Exchange Transaction); or

 

(d)                                 the failure of any Definitive Documentation to comply with the requirements of Section 4 of this Amended Agreement, which non-compliance remains uncured for a period of three (3) business days after the receipt by the Consenting Noteholders and the Consenting Term B-2 Lenders of written notice of such non-compliance from Ascent or Monitronics; provided that Ascent and Monitronics have made good faith efforts to negotiate such Definitive Documentation.

 

Notwithstanding the foregoing, upon a Company Termination pursuant to the foregoing subsection 11(a) resulting from a breach by any of the Consenting Term B-2 Lenders, the Amended Agreement shall not terminate with respect to Ascent or Monitronics; provided however, that the obligations of Ascent and Monitronics hereunder shall thereafter only be with respect to an Unsecured Exchange Transaction.

 

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12.          Mutual Termination; Automatic Termination.  This Amended Agreement and the obligations of all Parties hereunder may be terminated by mutual written agreement by and among Ascent, Monitronics, the Requisite Consenting Noteholders, and the Requisite Consenting Term B-2 Lenders.  Notwithstanding anything in this Amended Agreement to the contrary, this Amended Agreement shall terminate automatically (i) only as to the Consenting Term B-2 Lenders, if Monitronics fails to obtain the requisite consents to the Bank Amendments on or prior to the Toggle Trigger Time (as such Toggle Trigger Time may be amended in accordance with the terms of this Amended Agreement), and (ii) as to all Parties, upon the occurrence of any of the following events:

 

(a)                                 any of Ascent, Monitronics or any of their respective subsidiaries (i) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of such entity or any substantial part of the property of such entity, (ii) seeks any arrangement, adjustment, protection, or relief of its debts other than as contemplated by this Amended Agreement, or (iii) makes a general assignment for the benefit of its creditors;

 

(b)                                 any of Ascent, Monitronics or any of their respective subsidiaries commences a voluntary case filed under title 11 of the United States Code, 11 U.S.C. §§ 101, et seq. (as amended, the “Bankruptcy Code”);

 

(c)                                  the commencement of an involuntary case against any of Ascent, Monitronics or any of their respective subsidiaries under the Bankruptcy Code that is not dismissed within thirty (30) days of such filing; or

 

(d)                                 the occurrence of the consummation of the Transactions.

 

13.          Effect of Termination.  The date on which termination of this Amended Agreement as to a Party is effective in accordance with Sections 9, 10, 11 or 12 of this Amended Agreement shall be referred to as a “Termination Date.”  Upon the occurrence of (a) a Consenting Noteholder Termination or a Termination Date pursuant to Sections 12(ii)(a)-(c), Monitronics shall promptly withdraw, and shall not consummate, the SUN Exchange Offer, (b) a Consenting Term B-2 Lender Termination or a Termination Date pursuant to Sections 12(ii)(a)-(c), Monitronics shall promptly withdraw, and shall not consummate, the Bank Amendments, and (c) any Termination Date, (i) the rights and obligations of the terminating Party under this Amended Agreement shall be terminated effective immediately, and (ii) the terminating Party shall be released from all commitments, undertakings, and agreements hereunder; provided however, that each of the following shall survive any such termination:  (A) any claim for breach of this Amended Agreement that occurs prior to such Termination Date, and all rights and remedies with respect to such claims shall not be prejudiced in any way; and (B) Sections 13, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, and 33 hereof.  At any time from and after the Termination Date (except in the case of a Termination Date pursuant to Section 12(ii)(d)), each Consenting Noteholder in its sole discretion may withdraw or revoke its tender, consent and/or vote with respect to the SUN Exchange Offer in accordance with the terms and conditions of the SUN Exchange Offer and each Consenting Term B-2 Lender may withdraw its consent to the Bank Amendments in accordance with the terms thereof.

 

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14.          Transfers of Claims and Interests. (a) Each Consenting Noteholder shall not sell, loan, assign, transfer, hypothecate (other than hypothecations or re-hypothecations in favor of a registered broker-dealer with whom the Notes are held in a prime brokerage account), tender or otherwise dispose of (including by participation), directly or indirectly, its right, title, or interest in any Notes, in whole or in part (such actions are collectively referred to herein as a “Transfer” and the Consenting Noteholder making such Transfer is referred to herein as the “Transferor”), unless such Transfer is to another Consenting Noteholder or any other entity that first agrees in writing to be bound by the terms of this Amended Agreement by executing and delivering to counsel to Ascent and Monitronics and counsel to the Consenting Noteholders, in accordance with Section 25 hereof, a transferee joinder substantially in the form attached hereto as Exhibit B-1 (a “Noteholder Transferee Joinder”); provided, however, that a Consenting Noteholder may permit its prime broker to hold the Notes as part of a custodian arrangement whereby such Consenting Noteholder retains all of its voting rights with respect to such Notes from the TSA Effective Date until the occurrence of the Termination Date.  With respect to any and all Notes held by the relevant transferee upon consummation of a Transfer in accordance herewith, such transferee is deemed to make all of the representations, warranties, and covenants of a Consenting Noteholders, as applicable, set forth in this Amended Agreement and (if not already a Consenting Noteholder) is deemed to be, and shall be, a Consenting Noteholder for all purposes of this Amended Agreement.  Upon compliance with the foregoing, the Transferor shall be deemed to relinquish its rights (and be released from its obligations, except for any claim for breach of this Amended Agreement that occurs prior to such Transfer) under this Amended Agreement to the extent of such transferred rights and obligations.

 

Any Transfer made in violation of this Section 14(a) shall be deemed null and void ab initio and of no force or effect, regardless of any prior notice provided to Ascent, Monitronics, any Consenting Noteholder or Consenting Term B-2 Lender, and shall not create any obligation or liability of Ascent, Monitronics, any Consenting Noteholder or any Consenting Term B-2 Lender to the purported transferee.

 

(b)           Each Consenting Term B-2 Lender shall not sell, loan, assign, transfer, hypothecate, tender or otherwise dispose of (including by participation), directly or indirectly, its right, title, or interest in any Term B-2 Loan, in whole or in part (such actions are collectively referred to herein as a “Loan Transfer” and the Consenting Term B-2 Lender making such Loan Transfer is referred to herein as the “Loan Transferor”), unless such Loan Transfer is to another Consenting Term B-2 Lender or any other entity that first agrees in writing to be bound by the terms of this Amended Agreement by executing and delivering to counsel to Ascent and Monitronics and counsel to the Consenting Term B-2 Lenders, in accordance with Section 25 hereof, a transferee joinder substantially in the form attached hereto as Exhibit B-2 (a “Loan Transferee Joinder”).  With respect to any and all Term B-2 Loans held by the relevant transferee upon consummation of a Loan Transfer in accordance herewith, such transferee is deemed to make all of the representations, warranties, and covenants of a Consenting Term B-2 Lender, as applicable, set forth in this Amended Agreement and (if not already a Consenting Term B-2 Lender is deemed to be, and shall be, a Consenting Term B-2 Lender for all purposes of this Amended Agreement).  Upon compliance with the foregoing, the Loan Transferor shall be deemed to relinquish its rights (and be released from its obligations, except for any claim for breach of this Amended Agreement that occurs prior to such Loan Transfer) under this Amended Agreement to the extent of such transferred rights and obligations.

 

18

 

Any Loan Transfer made in violation of this Section 14(b) shall be deemed null and void ab initio and of no force or effect, regardless of any prior notice provided to Ascent, Monitronics, any Consenting Noteholder or any Consenting Term B-2 Lender, and shall not create any obligation or liability of Ascent, Monitronics, any Consenting Noteholder, or any Consenting Term B-2 Lender to the purported transferee.

 

(c)           Notwithstanding the foregoing, a Qualified Marketmaker (as defined herein), acting solely in its capacity as such, that acquires any Notes or Term B-2 Loans subject to this Amended Agreement shall not be required to execute a counterpart signature page to this Amended Agreement or otherwise agree to be bound by the terms and conditions set forth herein if, and only if, such Qualified Marketmaker sells or assigns such Notes or Term B-2 Loans within five (5) business days of its acquisition and the purchaser or assignee of such Notes or Term B-2 Loans is a Consenting Noteholder or a Consenting Term B-2 Lender, as applicable, or such purchaser or assignee executes and delivers a Transferee Joinder or Loan Transferee Joinder, as applicable, to counsel to Ascent and Monitronics, counsel to the Consenting Noteholders, and counsel to the Consenting Term B-2 Lenders, in accordance with Section 25 hereof; provided that, if a Qualified Marketmaker, acting solely in its capacity as such, acquires Notes or Term B-2 Loans from an entity who is not a Consenting Noteholder with respect to such Notes or is not a Consenting Term B-2 Lender with respect to such Term B-2 Loans (collectively, “Qualified Unrestricted Claims”), such Qualified Marketmaker may Transfer any right, title or interest in such Qualified Unrestricted Claims without the requirement that the transferee execute and deliver a Transferee Joinder or a Loan Transferee Joinder; provided further, that any such Qualified Marketmaker that is a Party to this Amended Agreement shall otherwise be subject to the terms and conditions of this Amended Agreement pending the completion of any such Transfer.  For purposes of this Amended Agreement, a “Qualified Marketmaker” means an entity that holds itself out to the public or applicable private markets as standing ready in the ordinary course of business to purchase from customers and sell to customers Notes and/or Term B-2 Loans of Monitronics, in its capacity as a dealer or market maker in Notes and/or Term B-2 Loans of Monitronics and is not holding such Notes or Term B-2 Loans for its own account.

 

15.          Further Acquisition of Claims or Interests.  Nothing in this Amended Agreement shall be construed as precluding any Consenting Noteholder or any Consenting Term B-2 Lender or any of such party’s affiliates from acquiring additional Notes or Term B-2 Loans; provided, however, that any additional Notes or Term B-2 Loans acquired by any Consenting Noteholder or any Consenting Term B-2 Lender and with respect to which such Consenting Noteholder or such Consenting Term B-2 Lender is the beneficial owner, or the nominee, investment manager, advisor or subadvisor for the beneficial owner with power and/or authority to bind any Notes or Term B-2 Loans held by it shall automatically and immediately be subject to the terms and conditions of this Amended Agreement, except to the extent the additional Notes or additional Term B-2 Loans are acquired by such Consenting Noteholder or Consenting Term B-2 Lender (in its capacity as such a nominee, investment manager, advisor or subadvisor) for the account of a beneficial owner for whom the Consenting Noteholder or Consenting Term B-2 Lender does not currently hold any Notes or Term B-2 Loans that are subject to this Amended Agreement.  Upon any such further acquisition, such Consenting Noteholder or Consenting Term B-2 Lender shall promptly notify counsel to Ascent and Monitronics and counsel to the Consenting

 

19

 

Noteholders or Consenting Term B-2 Lenders as applicable, and the Notes or Term B-2 Loans so acquired shall become subject to the terms of this Amended Agreement.

 

16.          Consents and Acknowledgments.  Each Party irrevocably acknowledges and agrees that this Amended Agreement does not constitute an offer to issue or sell securities to any Person, or the solicitation of an offer to acquire or buy securities, in any jurisdiction where such offer or solicitation would be unlawful.

 

17.          Representations and Warranties.

 

(a)                                 Each Consenting Noteholder hereby represents and warrants on a several and not joint basis for itself and not any other Person that the following statements are true, correct, and complete as of the date hereof:

 

(i)                                     it has the requisite organizational power and authority to enter into this Amended Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Amended Agreement;

 

(ii)                                  the execution and delivery of this Amended Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate or other organizational action on its part;

 

(iii)                               the execution, delivery, and performance by it of this Amended Agreement does not violate any provision of its certificate of incorporation, or bylaws, or other organizational documents;

 

(iv)                              it is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), with sufficient knowledge and experience to evaluate the terms and conditions of this Amended Agreement and to consult with its legal and financial advisors with respect to its investment decision to execute this Amended Agreement, and it has made its own analysis and decision to enter into this Amended Agreement;

 

(v)                                 it has reviewed, or has had the opportunity to review, with the assistance of professional and legal advisors of its choosing, all information it deems necessary and appropriate for it to evaluate the financial risks inherent in the Transactions; and

 

(vi)                              it (A) is the beneficial owner, or the nominee, investment manager, advisor or subadvisor for the beneficial owner with power and/or authority to bind the Notes identified and in the amounts set forth on its signature page hereto (or, in the case of a Consenting Noteholder that becomes a party hereto after the TSA Effective Date, below its name on its signature page to the Transferee

 

20

 

Joinder executed and delivered by such Consenting Noteholder); and (B) does not beneficially own any Notes other than as identified on its signature page hereto (or, in the case of a Consenting Noteholder that becomes a party hereto after the TSA Effective Date, below its name on its signature page to the Transferee Joinder executed and delivered by such Consenting Noteholder).

 

(b)                                 Each Consenting Term B-2 Lender hereby represents and warrants on a several and not joint basis for itself and not any other Person that the following statements are true, correct, and complete as of the date hereof:

 

(i)                                     it has the requisite organizational power and authority to enter into this Amended Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Amended Agreement;

 

(ii)                                  the execution and delivery of this Amended Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate or other organizational action on its part;

 

(iii)                               the execution, delivery, and performance by it of this Amended Agreement does not violate any provision of its certificate of incorporation, or bylaws, or other organizational documents;

 

(iv)                              it is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), with sufficient knowledge and experience to evaluate the terms and conditions of this Amended Agreement and to consult with its legal and financial advisors with respect to its investment decision to execute this Amended Agreement, and it has made its own analysis and decision to enter into this Amended Agreement;

 

(v)                                 it has reviewed, or has had the opportunity to review, with the assistance of professional and legal advisors of its choosing, all information it deems necessary and appropriate for it to evaluate the financial risks inherent in the Transactions; and

 

(vi)                              it (A) is the beneficial owner, or the nominee, investment manager, advisor or subadvisor for the beneficial owner with power and/or authority to bind the Term B-2 Loans identified and in the amounts set forth on its signature page hereto (or, in the case of a Consenting Term B-2 Lender that becomes a party hereto after the TSA Effective Date, below its name on its signature page to the Loan Transferee Joinder executed and delivered by such

 

21

 

Consenting Term B-2 Lender); and (B) does not beneficially own any Term B-2 Loans other than as identified on its signature page hereto (or, in the case of a Consenting Term B-2 Lender that becomes a party hereto after the TSA Effective Date, below its name on its signature page to the Loan Transferee Joinder executed and delivered by such Consenting Term B-2 Lender).

 

(c)                                  Each of Ascent and Monitronics hereby represents and warrants on a joint and several basis (and not for any other Person other than itself) that the following statements are true, correct, and complete as of the date hereof:

 

(i)                                     it has the requisite corporate or other organizational power and authority to enter into this Amended Agreement and to carry out the transactions contemplated by, and perform its respective obligations under, this Amended Agreement;

 

(ii)                                  the execution and delivery of this Amended Agreement and the performance of its obligations hereunder have been duly authorized by all necessary corporate or other organizational action on its part;

 

(iii)                               the execution and delivery by it of this Amended Agreement does not (A) violate its certificates of incorporation, or bylaws, or other organizational documents, or those of any of its affiliates, or (B) result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it or any of its affiliates is a party;

 

(iv)                              the execution and delivery by it of this Amended Agreement does not require any registration or filing with, the consent or approval of, notice to, or any other action with any federal, state, or other governmental authority or regulatory body, other than, for the avoidance of doubt, the actions with governmental authorities or regulatory bodies required in connection with implementation of the Transactions;

 

(v)                                 it has sufficient knowledge and experience to evaluate properly the terms and conditions of this Amended Agreement, and has been afforded the opportunity to consult with its legal and financial advisors with respect to its decision to execute this Amended Agreement, and it has made its own analysis and decision to enter into this Amended Agreement and otherwise investigated this matter to its full satisfaction; and

 

(vi)                              it is not currently engaged in any discussions, negotiations or other arrangements with respect to any Alternative Transaction.

 

22

 

18.          Waiver.  If the Transactions are not consummated, then following the occurrence of the Termination Date, if applicable, nothing herein shall be construed as a waiver by any Party of any or all of such Party’s rights, other than as provided in Section 13 of this Amended Agreement, and the Parties expressly reserve any and all of their respective rights.  The Parties acknowledge that this Amended Agreement and all negotiations relating hereto are part of a proposed settlement of matters that could otherwise be the subject of litigation.  Pursuant to Rule 408 of the Federal Rules of Evidence, any applicable state rules of evidence, and any other applicable law, foreign or domestic, this Amended Agreement, any related documents, and all negotiations relating thereto shall not be admissible into evidence in any proceeding, or used by any party for any reason whatsoever, including in any proceeding, other than a proceeding to enforce its terms.

 

19.          Relationship Among Parties.  Notwithstanding anything herein to the contrary, the duties and obligations of the Consenting Noteholders under this Amended Agreement shall be several, not joint and the duties and obligations of the Consenting Term B-2 Lenders under this Amended Agreement shall be several, not joint.  No Party shall have any responsibility by virtue of this Amended Agreement for any trading by any other entity.  No prior history, pattern, or practice of sharing confidences among or between the Parties shall in any way affect or negate this Amended Agreement.

 

20.          Specific Performance.  It is understood and agreed by the Parties that money damages would be an insufficient remedy for any breach of this Amended Agreement by any Party and each non-breaching Party shall be entitled to seek specific performance and injunctive or other equitable relief as a remedy of any such breach of this Amended Agreement, including, without limitation, an order of a court of competent jurisdiction requiring any Party to comply promptly with any of its obligations hereunder; provided, however, that each Party agrees to waive any requirement for the securing or posting of a bond in connection with such remedy.

 

21.          GOVERNING LAW & JURISDICTION.  THIS AMENDED AGREEMENT 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 PROVISION WHICH WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.  BY ITS EXECUTION AND DELIVERY OF THIS AMENDED AGREEMENT, EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES FOR ITSELF THAT ANY LEGAL ACTION, SUIT OR PROCEEDING AGAINST IT WITH RESPECT TO ANY MATTER UNDER OR ARISING OUT OF OR IN CONNECTION WITH THIS AMENDED AGREEMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT RENDERED IN ANY SUCH ACTION, SUIT OR PROCEEDING, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK, COUNTY OF NEW YORK. BY EXECUTION AND DELIVERY OF THIS AMENDED AGREEMENT, EACH OF THE PARTIES HERETO IRREVOCABLY ACCEPTS AND SUBMITS ITSELF TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS, GENERALLY AND UNCONDITIONALLY, WITH RESPECT TO ANY SUCH ACTION, SUIT OR PROCEEDING, AND WAIVES ANY OBJECTION IT MAY HAVE TO VENUE OR THE CONVENIENCE OF THE FORUM.

 

23

 

22.          WAIVER OF RIGHT TO TRIAL BY JURY.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN ANY OF THE PARTIES ARISING OUT OF, CONNECTED WITH, RELATING TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN ANY OF THEM IN CONNECTION WITH THIS AMENDED AGREEMENT.  INSTEAD, ANY DISPUTES RESOLVED IN COURT SHALL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

 

23.          Successors and Assigns.  Except as otherwise provided in this Amended Agreement, this Amended Agreement is intended to bind and inure to the benefit of each of the Parties and each of their respective permitted successors, assigns, heirs, executors, administrators, and representatives.

 

24.          No Third-Party Beneficiaries.  Unless expressly stated herein, this Amended Agreement shall be solely for the benefit of the Parties and no other Person shall be a third-party beneficiary of this Amended Agreement.

 

25.          Notices.  All notices (including, without limitation, any notice of termination or breach) and other communications from any Party hereunder shall be in writing and shall be deemed to have been duly given if personally delivered by courier service, messenger, email, or facsimile to the other Parties at the applicable addresses below, or such other addresses as may be furnished hereafter by notice in writing.  Any notice of termination or breach shall be delivered to all other Parties.

 

	
 
    	
(a)
    	
If to Ascent or Monitronics:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Ascent   Capital Group, Inc.

5251 DTC Parkway,   Suite 1000

Greenwood Village, CO   80111
    
	
 
    	
 
    	
Attn:
    	
Mr. William   Niles
    
	
 
    	
 
    	
Tel:
    	
303.628.5600
    
	
 
    	
 
    	
Email:
    	
wniles@ascentcapitalgroupinc.com
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
With a copy to:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Baker   Botts L.L.P.
    
	
 
    	
 
    	
30   Rockefeller Plaza
    
	
 
    	
 
    	
New   York, New York 10112
    
	
 
    	
 
    	
Attn:
    	
Renee   L. Wilm, Esq.
    
	
 
    	
 
    	
 
    	
Emanuel C. Grillo, Esq.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Tel: 212.408.2500
    
	
 
    	
 
    	
Fax:   212.408.2501
    
	
 
    	
 
    	
Email:
    	
renee.wilm@bakerbotts.com
    
	
 
    	
 
    	
 
    	
emanuel.grillo@bakerbotts.com
    

 

24

 

	
 
    	
 
    	
and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Latham &   Watkins LLP
    
	
 
    	
 
    	
885   Third Avenue,
    
	
 
    	
 
    	
New   York, New York 10022
    
	
 
    	
 
    	
Attn:
    	
Roger   Schwartz, Esq.
    
	
 
    	
 
    	
 
    	
David   Hammerman, Esq.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Tel:   212.906.1200
    
	
 
    	
 
    	
Fax:   212.751.4864
    
	
 
    	
 
    	
Email:
    	
roger.schwartz@lw.com
    
	
 
    	
 
    	
 
    	
david.hammerman@lw.com
    
	
 
    	
 
    	
 
    
	
 
    	
(b)
    	
Consenting Noteholders:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Stroock &   Stroock & Lavan LLP
    
	
 
    	
 
    	
180   Maiden Lane
    
	
 
    	
 
    	
New   York, New York 10038-4982
    
	
 
    	
 
    	
Attn:
    	
Kristopher   M. Hansen, Esq.
    
	
 
    	
 
    	
 
    	
Sayan Bhattacharyya, Esq.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Tel:
    	
212.806.6056
    
	
 
    	
 
    	
 
    	
212.806.5723
    
	
 
    	
 
    	
Fax:
    	
212.806.6006
    
	
 
    	
 
    	
Email:
    	
khansen@stroock.com
    
	
 
    	
 
    	
 
    	
sbhattacharyya@stroock
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(c)
    	
Consenting Term B-2 Lenders:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Jones   Day LLP
    
	
 
    	
 
    	
250   Vesey Street
    
	
 
    	
 
    	
New   York, New York 10281-1047
    
	
 
    	
 
    	
Attn:   Scott J. Greenberg, Esq.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Tel:   212.326.3939
    
	
 
    	
 
    	
Fax:   212.755.7306
    
	
 
    	
 
    	
Email:   sgreenberg@jonesday.com
    

 

26.          Entire Agreement.  This Amended Agreement (including, for the avoidance of doubt, the Term Sheet and any other Exhibits) constitutes the entire agreement of the Parties with respect to the subject matter of this Amended Agreement, and supersedes all prior negotiations, agreements, and understandings, whether written or oral, among the Parties with respect to the subject matter of this Amended Agreement.

 

27.          Amendments.  Except as otherwise provided herein, this Amended Agreement may not be modified, amended, or supplemented except in a writing executed and delivered by

 

25

 

Ascent, Monitronics, the Requisite Consenting Noteholders and the Requisite Consenting Term B-2 Lenders.

 

28.          Counterparts.  This Amended Agreement may be executed in one or more counterparts, each of which, when so executed, shall be deemed to be an original and shall constitute the same instrument, and the counterparts may be delivered by facsimile transmission or by email in portable document format (.pdf) or other electronic imaging means, which shall be deemed to be an original for the purposes of this Section 28; provided, however, that signature pages executed by each of the Consenting Noteholders or the Consenting Term B-2 Lenders shall be delivered to (a) each of the other Consenting Noteholders, the other Consenting Term B-2 Lenders, counsel to the Consenting Noteholders (solely with respect to the signature pages of Consenting Term B-2 Lenders) and counsel to the Consenting Term B-2 Lenders (solely with respect to the signature pages of Consenting Noteholders) in a redacted form that removes such Consenting Noteholder’s or Consenting Term B-2 Lender’s holdings of Notes or Term B-2 Loans (as applicable), and (b) Ascent and Monitronics in an unredacted form.

 

29.          Public Disclosure and Press Releases.  This Amended Agreement, as well as its terms, its existence, and the details regarding the negotiation of its terms are expressly subject to any existing confidentiality agreements executed by and among any of the Parties as of the date hereof.  Notwithstanding the foregoing, Ascent and Monitronics may make any public disclosure or filing with respect to the subject matter of this Amended Agreement, including, without limitation, the existence of, or the terms of, this Amended Agreement or any other material term of the Transactions, that, based upon the advice of counsel, is required to be made (i) by applicable law or regulation or (ii) pursuant to any rules or regulations of NASDAQ, without the express written consent of the other Parties; provided, that Ascent and Monitronics shall consult with the Consenting Noteholder Advisors and the Consenting Term B-2 Lender Advisors before issuing any such press release or making any such filing and shall submit drafts to the Consenting Noteholder Advisors and the Consenting Term B-2 Lender Advisors of any such press releases or filing as soon as reasonably practicable prior to making any such disclosure, and shall afford the Consenting Noteholder Advisors and the Consenting Term B-2 Lender Advisors an opportunity to comment on such documents and disclosures, and such documents and disclosures shall be in form and substance reasonably acceptable to the Consenting Noteholder Advisors and the Consenting Term B-2 Lender Advisors.  Each Party to this Amended Agreement shall have the right, at any time, to know the identities of every other Party to this Amended Agreement, but must keep such information confidential and may not disclose such information to any Person except to the extent such Party believes, upon the advice of counsel, that it is legally required to do so.  Notwithstanding anything to the contrary in this Amended Agreement, Ascent and Monitronics shall not disclose to any Person (and shall redact all such information in any public filing) the identities and holdings information (including the amounts or percentages of Notes held) of any Consenting Noteholders and the identities and holdings information (including the amounts or percentages of Term B-2 Loans held) of any the Consenting Term B-2 Lenders as of the date hereof or at any time hereafter, except to the extent compelled to disclose such information by a court of competent jurisdiction, in which event Ascent and Monitronics shall (a) take all reasonable measures to limit the scope of such disclosure and (b) give the affected Consenting Noteholder(s) and the Consenting Noteholder Advisors (who shall have the right to seek a protective order prior to disclosure) or the affected Consenting Term B-2 Lender(s) and the Consenting Term B-2 Lender Advisors, in each case as

 

26

 

applicable, prior written notice of such disclosure and a reasonable opportunity to review and comment in advance of such disclosure or filing; provided, however, that the foregoing shall not prohibit the disclosure of the aggregate percentage or aggregate principal amount of Notes held by all Consenting Noteholders, collectively or the aggregate percentage or aggregate principal amount of Term B-2 Loans held by all Consenting Term B-2 Lenders.

 

30.          Headings.  The section headings of this Amended Agreement are for convenience of reference only and shall not, for any purpose, be deemed a part of this Amended Agreement.

 

31.          Interpretation.  This Amended Agreement is the product of negotiations among the Parties, and the enforcement or interpretation hereof is to be interpreted in a neutral manner, and any presumption with regard to interpretation for or against any Party by reason of that Party having drafted or caused to be drafted this Amended Agreement or any portion hereof, shall not be effective in regard to the interpretation hereof.

 

32.          Representation by Counsel.  Each Party hereto acknowledges that it has been represented by, or has been provided a reasonable period of time to obtain access to and advice by, counsel with respect to this Amended Agreement and the Transactions contemplated hereby.  Accordingly, any rule of law or any legal decision that would provide any Party with a defense to the enforcement of the terms of this Amended Agreement against such Party based upon lack of legal counsel shall have no application and is expressly waived.

 

33.          Severability.  If any provision of this Amended 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 Amended Agreement shall continue in full force and effect; provided, however, that nothing in this Section 33 shall be deemed to amend, supplement or otherwise modify, or constitute a waiver of, any Termination Event.  Upon any such determination of invalidity, the Parties shall negotiate in good faith to modify this Amended Agreement so as to effect the original intent of the Parties as closely as possible, in a reasonably acceptable manner, such that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

 

[Signatures and exhibits follow.]

 

27

 

IN WITNESS WHEREOF, the Parties hereto have caused this Amended Agreement to be executed and delivered by their respective duly authorized officers, solely in their respective capacity as officers of the undersigned and not in any other capacity, as of the date first set forth above.

 

 

	
 
    	
 
    	
ASCENT   CAPITAL GROUP, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   William Niles
    
	
 
    	
 
    	
 
    	
Name:
    	
William   Niles
    
	
 
    	
 
    	
 
    	
Title:
    	
Chief   Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
MONITRONICS   INTERNATIONAL, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   William Niles
    
	
 
    	
 
    	
 
    	
Name:
    	
William   Niles
    
	
 
    	
 
    	
 
    	
Title:
    	
Executive   Vice President
    

 

 

	
 
    	
[CONSENTING NOTEHOLDERS]
    

 

 

	
 
    	
[CONSENTING TERM B-2 LENDERS]
    

 

 

Exhibit A to the Amended and Restated Transaction Support Agreement

 

Term Sheet

 

 

Execution Version

 

ASCENT CAPITAL GROUP, INC.

MONITRONICS INTERNATIONAL, INC.

(COLLECTIVELY, THE “COMPANY”)

 

TERM SHEET

 

OCTOBER 30, 2018

 

This Term Sheet sets forth the principal terms of the Transactions.  Capitalized terms used herein and not otherwise defined shall have the meanings given them in that certain Amended and Restated Transaction Support Agreement dated as of October 30, 2018, to which this Term Sheet is an exhibit (the “Amended Agreement”).

 

THIS TERM SHEET DOES NOT CONSTITUTE (NOR SHALL IT BE CONSTRUED AS) AN OFFER TO BUY, SELL OR EXCHANGE ANY OF THE SECURITIES OR INSTRUMENTS DESCRIBED HEREIN, IT BEING UNDERSTOOD THAT SUCH A SOLICITATION, IF ANY, ONLY WILL BE MADE IN COMPLIANCE WITH APPLICABLE PROVISIONS OF ALL APPLICABLE LAWS. THIS TERM SHEET DOES NOT ADDRESS ALL TERMS THAT WOULD BE REQUIRED IN CONNECTION WITH THE TRANSACTIONS AND ENTRY INTO OR THE CREATION OF ANY BINDING AGREEMENT IS SUBJECT TO THE NEGOTIATION AND EXECUTION OF DEFINITIVE DOCUMENTATION, AS CONTEMPLATED BY THE AMENDED AGREEMENT.

 

	
Second Lien   Transactions Overview
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Second Lien Exchange:
    	
 
    	
Monitronics shall offer to exchange (the “Second   Lien Exchange”), and the Consenting Noteholders shall exchange, the Notes   for the New Second Lien Notes (as defined below) on the following basis:

 

(i)                                     on or prior to   the early tender date, the Notes shall be exchanged on a par value basis such   that for each $1,000 aggregate principal amount of Notes tendered, the holder   shall receive $1,000 aggregate principal amount of New Second Lien Notes; and

 

(ii)                                  after the early   tender date, but on or before the expiration date of the Second Lien   Exchange, the Notes shall be exchanged such that for each $1,000 aggregate   principal amount of Notes tendered, the holder shall receive $950 aggregate   principal amount of New Second Lien Notes. 
    
	
 
    	
 
    	
 
    
	
New Second Lien Notes of Monitronics (“New   Second Lien Notes”)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Interest Rate: 
    	
 
    	
Monitronics shall pay interest on the New Second Lien Notes,   semi-annually, (a) in cash at a rate per annum equal to 5.5%; plus   (b) in kind (PIK) at a rate per annum equal to 6.5%.
    
	
 
    	
 
    	
 
    
	
Guarantees/Collateral/Security:
    	
 
    	
The New Second Lien Notes shall be guaranteed by each subsidiary of   Monitronics that guarantees the obligations under the Credit Agreement 
    

 

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(the “Guarantors”).    Monitronics and the Guarantors shall grant to the collateral trustee   for the New Second Lien Notes for the benefit of the holders of the New   Second Lien Notes second priority security interests in, and liens upon the   same collateral presently pledged as security for the Credit Agreement,   including the existing parent pledge and any collateral that may be pledged   in the future as security for the obligations under the Credit Agreement.  Any security interests granted shall be in   all respects subject to the Intercreditor Agreement described in the   “Conditions to Closing” below. 
    
	
 
    	
 
    	
 
    
	
Maturity Date:
    	
 
    	
April 30, 2023.
    
	
 
    	
 
    	
 
    
	
Covenants and Events   of Default:
    	
 
    	
Standard and customary covenants and events of default   for a transaction of this type, nature and size, and including (without   limitation) the following:

 

·                  Monitronics’ right to issue additional New   Second Lien Notes up to a maximum aggregate principal amount of $610.0   million (inclusive of the amount of the New Second Lien Notes issued in the   Second Lien Exchange), which may be issued solely for the following purposes:   (i) up to $585.0 million aggregate principal amount of New Second Lien   Notes (excluding any PIK Interest, but inclusive of the amount of the New   Second Lien Notes issued in the Second Lien Exchange) may be issued following   the closing of the Second Lien Exchange solely to refinance the Notes not   exchanged in the Second Lien Exchange (the “Stub Notes”); and   (ii) up to $25.0 million aggregate principal amount of New Second Lien   Notes (but, excluding any PIK Interest) (the “Supplemental Second Lien   Notes”) may be issued solely in exchange for, or solely to refinance, the   Ascent 4.00% Convertible Senior Notes due 2020 (the “Ascent Convertible   Notes”) at an exchange rate not in excess of par for par, in each case of   clauses (i) and (ii), subject to pro forma compliance with a new Total   Secured Debt to EBITDA debt incurrence ratio covenant (taking into account   only first and second lien debt, plus any PIK Interest) to be set at 5.25   times (which is to be calculated in the same manner as the existing Total   Debt to EBITDA covenant under the Credit Agreement which Total Debt to EBITDA   covenant shall also remain in effect and shall also be amended to be set at   5.5x; and for which the calculation for EBITDA will include the adjustments   set forth in this Term Sheet);

 

·                 Monitronics shall not distribute to Ascent   any proceeds received in connection with that certain anticipated insurance   reimbursement in an estimated amount of $9,700,000 (the “Insurance   Proceeds”), except (i) in connection with a settlement of the   litigation initiated by certain holders of the Ascent Convertible Notes,   which settlement either satisfies all or a portion of the Ascent Convertible   Notes or extends the maturity date of the Ascent Convertible Notes to a date   at least 90 days after the final maturity date of the Term B-2 Loans or the   New 
    

 

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Second Lien Notes, whichever is later (the “Settlement”)   or (ii) as part of an exchange or other similar transaction in lieu of a   Settlement which transaction either refinances, repays, redeems, or   repurchases all or a portion of the Ascent Convertible Notes or extends the maturity   date of the Ascent Convertible Notes to a date at least 90 days after the   final maturity date of the Term B-2 Loans or the New Second Lien Notes,   whichever is later; provided that any such distribution from Monitronics to   Ascent shall be made solely in the form of repayment in full satisfaction of   the outstanding intercompany loan evidenced by that certain Amended and   Restated Promissory Note, dated as of February 29, 2016 (the “Interco   Note”) with such Insurance Proceeds;

 

·                 Monitronics shall not purchase, prepay,   redeem or otherwise retire for cash any of the Notes not exchanged in the   Second Lien Exchange; provided, that immediately prior to the date (or   on the date) of either (i) the springing maturity date of the Term B-2   Loans with respect to non-consenting Term B-2 Lenders (each as defined   below), if any, or (ii) the contractual maturity date of the Notes,   Monitronics may use up to $30,000,000 of cash or any remaining portion of the   New Second Lien Notes to acquire or repay any Stub Notes;

 

·                 A “Permitted Payments” basket under   the indenture for the New Second Lien Notes shall be included to permit an   aggregate annual amount of up to $10,000,000 to be distributed to Ascent by   Monitronics to fund (i) solely public company and other administrative   expenses in an amount not to exceed $6,000,000 annually and   (ii) interest payments solely on the Ascent Convertible Notes (or any   notes or debt instruments exchanged for the Ascent Convertible Notes) not to   exceed $4,000,000 annually; provided, that the amount that may be   distributed in any year shall be reduced on a dollar-for-dollar basis   (a) in an amount equal to any principal payments (but not interest   payments which may continue to be made in the ordinary course of business)   made in respect of the Interco Note in such year (which reduction shall be   applied ratably to the sublimits applicable to the public company expenses   and the interest on the Ascent Convertible Notes), except that no such   reduction shall be applied in connection with any payment in respect of the   Interco Note with the Insurance Proceeds as described above; and (b) in   an amount equal to solely the cash interest payable in respect of any   Supplemental Second Lien Notes issued in accordance with this Term Sheet.  For avoidance of doubt, to the extent that   the cash amount of interest payable on the Ascent Convertible Notes is   reduced in accordance with the foregoing, the Permitted Payments basket shall   be reduced by a corresponding amount. Any cash transferred from Monitronics   to Ascent pursuant to the Permitted Payments basket that is not used for the   purposes specified in the first sentence of this section within 18 months of   the distribution thereof shall be promptly returned to Monitronics; and
    

 

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·                 Credit Agreement covenants (including   Section 7.02(d)) shall be amended to permit the incurrence of unsecured   debt solely to refinance debt of Monitronics which shall be subject to the   consent of the Requisite Term B-2 Lenders and the Requisite Consenting   Noteholders (which in each case shall not unreasonably be withheld) with   respect to the maturity and the pricing of such unsecured debt.
    
	
 
    	
 
    	
 
    
	
Treatment of the Ascent Convertible Notes:
    	
 
    	
To retire the Ascent Convertible Notes, Ascent   may use available cash of Ascent (including proceeds of the repayment of the   Interco Loan to the extent permitted hereunder) and Monitronics may exchange   up to $25.0 million of New Second Lien Notes (subject to the leverage ratio   test referenced above).
    
	
 
    	
 
    	
 
    
	
Consent Solicitation:
    	
 
    	
The tender of any Note into the Second Lien   Exchange shall constitute consent to the proposed amendments to the Notes   Indenture which shall include the elimination or waiver of all, or substantially all, of the restrictive   covenants and events of default under the Notes Indenture.
    
	
 
    	
 
    	
 
    
	
Amendments to Existing Credit Agreement
    	
 
    	
In connection with the Second Lien Exchange,   those lenders under the Term B-2 Loan (the “Term B-2 Lenders”) under   the Existing Credit Agreement who consent to the proposed amendments of the   Credit Agreement (the “Bank Amendments”) shall receive, and the   Existing Credit Agreement shall be amended to include:

 

·                 an increase in the interest rate payable   in respect of the Term B-2 loan under the Credit Agreement (the “Term B-2   Loan”) of 100 basis points to L + 650;

 

·                 an increase in the per quarter   amortization payments for two years commencing on the first quarterly payment   date after the effective date of the amendment such that each quarterly payment   in respect of all Term B-2 Loans shall be equal to $9,375,000 for two years   (totaling $75,000,000 in the aggregate over such two-year period) with such   quarterly amortization payments to be reduced after such two-year period to   $2,750,000;

·                 call protection following the amendment   effective date as follows: 102 in the first year, 101 in the second year and   par thereafter.

 

In connection with the Second Lien Exchange,   those lenders under the Revolving Loans (the “Revolving Loan Lenders”)   under the Existing Credit Agreement who consent to the Bank Amendments shall   receive, and the Existing Credit Agreement shall be amended to include:

 

·                 an increase in the interest rate payable   in respect of the Revolving Loans under the Existing Credit Agreement of 75 basis   points; and

and

·                 permanent reduction of each Revolving Loan   Lender’s pro rata share of the Revolving Credit Commitment from $295,000,000   to $250,000,000.
    

 

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In addition to the foregoing, the Bank Amendments   shall include amendments (i) to provide for (x) termination of the   accordion feature of the Term B-2 Loan reducing such amount from $150,000,000   to $0 and eliminating the ability to incur Incremental Equivalent Debt under   Section 7.02(l)(i) of the Credit Agreement and (y) termination   of the accordion feature of the Revolving Loan reducing such amount from   $20,000,000 to $0 and (ii) to the existing covenants in the Credit   Agreement to facilitate and permit the Second Lien Exchange, including   without limitation:

 

·                 Total Debt to   EBITDA ratio of 5.50x (from 5.25x);

·                 Exclusion of the   second lien debt from current RMR to Secured Debt calculation;

·                 LTM pro forma   adjustment (add-back) to EBITDA for direct channel account generation up to   $10,000,000;

·                 Covenant   amendments to permit creation of New Second Lien Notes

·                 Covenant   amendments consistent with the covenants set forth above including with   respect to amount and conditions of the issuance of the New Second Lien   Notes, use of Insurance Proceeds, acquisition or prepayment of Notes; and the   use of the up to $10,000,000 annual distribution to Ascent;

·                 Carve out for   Permitted Payments basket (as described above) and for the use of up to   $30,000,000 in cash to repay (at the times specified above) any outstanding   Senior Notes, after giving effect to the Second Lien Exchange to avoid the   occurrence of the Springing Maturity (as defined below) or otherwise prior to   the maturity date of the Notes;

·                 Elimination of   event of default for going concern qualification to the Monitronics’ audit   that results from or is related to the “springing” maturity of the Existing   Credit Agreement obligations associated with any outstanding Notes (the “Springing   Maturity”);

·                 Limit the   unsecured debt basket set forth in Section 7.02(d) of the Credit   Agreement to refinancings of debt of Monitronics only; and

·                 Solely as to the   consenting lenders under the Existing Credit Agreement (and the Consenting   Noteholders to the extent applicable), a waiver of the Springing Maturity   where no more than $22,500,000 in principal amount of Notes remain   outstanding at the date of the Springing Maturity.
    
	
 
    	
 
    	
 
    
	
Ascent Cash Contribution 
    	
 
    	
Ascent shall contribute $75,000,000 to   Monitronics upon the closing of the Second Lien Exchange, which contribution   shall not increase or provide for any additional capacity under any of the   negative covenants applicable to the Notes and shall not be used to pre-pay   any indebtedness of the Company; provided that such funds may be used for general   working capital purposes and to pay amounts set forth in the Permitted   Payments basket and except as expressly permitted hereunder.
    

 

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Conditions Precedent to Closing:
    	
 
    	
The closing of the Second Lien Exchange and the   Bank Amendments shall be subject to customary conditions which shall include   the following:

 

·                 Definitive   Documentation that complies with Section 4 of the Amended Agreement and   shall include an Intercreditor Agreement between the collateral agent for the   lenders under the Existing Credit Agreement and the collateral agent for the   holders of the New Second Lien Notes, which Definitive Documentation and   Intercreditor Agreement shall be in form and substance reasonably satisfactory   to the Requisite Consenting Term B-2 Lenders and the Requisite Consenting   Noteholders;

·                 The Bank   Amendments shall be in form and substance reasonably satisfactory to the   Requisite Consenting Noteholders;

·                 Delivery of   customary opinions, as reasonably determined by the parties;

·                 Payment of the   reasonable and documented fees and expenses incurred by the professionals for   the Revolving Loan Agent, the Consenting Term B-2 Lenders, and the Consenting   Noteholders; and

·                 Receipt of   requisite consents to the Bank Amendments from the lenders under the Existing   Credit Agreement (the “Requisite Consents”).
    
	
 
    	
 
    	
 
    
	
Unsecured Exchange Transaction   Overview
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Unsecured Exchange Transaction for New Senior   Unsecured Notes and Cash Tender Offer:
    	
 
    	
If Monitronics has not received the Requisite   Consents by the Toggle Trigger Time, then Ascent and Monitronics shall offer   to exchange, up to $100 million in cash and/or up to $585 million of New   Senior Unsecured Notes (as defined below), together with the Additional Consideration   (as defined below) on the following basis:

 

·                 Cash   Tender/Modified Dutch Auction: Tendered Notes shall be accepted for purchase   by Ascent (such Notes, the “Acquired Notes”) pursuant to a modified   “Dutch Auction” tender offer within a price range of $750 per $1,000   principal amount of Notes to $875 per $1,000 principal amount of Notes.  Notes will be accepted from the lowest   price bid to the highest within the range until the tender is filled and the   maximum participation level has been reached. Except as provided below with   respect to Acquired Notes that may be exchanged by Ascent for New Senior   Unsecured Notes, the Acquired   Notes shall be exchanged by Ascent for new unsecured notes of Monitronics,   which shall be expressly subordinated in right of payment to the New Senior   Unsecured Notes and to the guarantees of the New Senior Unsecured Notes, pay   cash interest at 9.125% (no PIK feature), and will mature no earlier than the   New Senior Unsecured Notes.  Any Notes   tendered into the modified Dutch Auction in excess of the maximum participation level,   but not accepted, will be deemed tendered into the exchange offer described   below.
    

 

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·                 Exchange Offer: On or prior to   the early tender date, the Notes shall be exchanged on a par value basis such   that for each $1,000 principal of Notes tendered, the holder shall receive   New Senior Unsecured Notes with a par value of $1,000 principal of New Senior   Unsecured Notes; and after the early tender date, but on or before the   expiration date of the Unsecured Exchange Transaction, the Notes shall be   exchanged such that for each $1,000 principal of Notes tendered, the holder   shall receive New Senior Unsecured Notes with a par value of $950 principal   of New Senior Unsecured Notes.
    
	
 
    	
 
    	
 
    
	
Additional Consideration
    	
 
    	
Cashlessly exercisable warrants representing in the aggregate 10% of   the total number of outstanding shares of Ascent’s Series A and   Series B common stock on a fully-diluted basis, exercisable for Ascent   Series A common stock, with a strike price of $3.435 per share.
    
	
 
    	
 
    	
 
    
	
New Senior Unsecured Notes of Monitronics   (“New Senior Unsecured Notes”):
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Interest Rate:
    	
 
    	
Monitronics shall pay interest on the New Senior Unsecured Notes, semi-annually,   (a) in cash at a rate per annum equal to 10.125%; plus (b) to be   paid in kind (PIK) at a rate per annum equal to 2.625% subject to a mechanism   by which up to 2.375% of the cash interest can toggle to an equivalent amount   of PIK interest through April 30, 2021 based upon an officer’s   certificate and a financial test to ensure compliance with current covenant   package under Credit Agreement.
    
	
 
    	
 
    	
 
    
	
Maturity Date:
    	
 
    	
April 30, 2023
    
	
 
    	
 
    	
 
    
	
Subsidiary Guarantees,   Priority and Related Asset Transfers:
    	
 
    	
Monitronics and all of its restricted subsidiaries that guarantee the   obligations under the Credit Agreement will guarantee the New Senior   Unsecured Notes.  Monitronics and   certain of its existing subsidiaries will transfer a majority of their assets   (the “Transferred Assets”) which will include a majority of their   primary revenue-generating contracts to one or more subsidiaries that   guarantee or will guarantee the New Senior Unsecured Notes and the Credit   Agreement, but will be designated as unrestricted under the Notes Indenture   and will not guarantee the Notes.

 

For avoidance of doubt, the Transferred Assets will remain subject to   the security interests granted in connection with the Credit Agreement.
    
	
 
    	
 
    	
 
    
	
Covenants and Events of Default:
    	
 
    	
Standard and customary covenants and events of default for a   transaction of this kind, nature and size, and the following:

 

·                 Monitronics’ right to issue additional New   Senior Unsecured Notes up to a maximum aggregate principal amount of $585   million, including those New Senior Unsecured Notes issued as part of the   Unsecured Exchange Transaction, for the sole purpose 
    

 

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of refinancing all of the existing Notes subject to pro forma   compliance with a new Total Debt to EBITDA ratio covenant to be set at 5.25   times (which is the calculated in the same manner as the existing Total Debt   to EBITDA covenant);

 

·                 Monitronics’ right to issue New Senior   Unsecured Notes in an aggregate principal amount up to $25 million in   exchange for the Acquired Notes (with Ascent then exchanging such New Senior   Unsecured Notes for existing Ascent Convertible Notes) and for other   corporate purposes; and

 

·                 Monitronics’ right to issue additional New   Senior Unsecured Notes (in excess of the cap described above) with the   consent of the holders of a majority of the principal amount of the New   Senior Unsecured Notes outstanding.

 

For the avoidance of doubt, the Permitted Payments basket described   above in the Second Lien Transactions Overview will not apply to the New   Senior Unsecured Notes.
    
	
 
    	
 
    	
 
    
	
Consent Solicitation:
    	
 
    	
The tender of any Note into the Unsecured Exchange Transaction shall   constitute consent to the proposed amendments to the Notes Indenture which   shall include (i) the elimination or waiver of all or substantially all   of the restrictive covenants and events of default under the Notes Indenture   and (ii) the modification or elimination of other provisions in the   Notes Indenture to remove the subsidiary guarantees granted to the Notes.
    
	
 
    	
 
    	
 
    
	
Conditions Precedent to Closing:
    	
 
    	
The closing of the Unsecured Exchange Transaction shall be subject to   customary conditions which shall include the following:

 

·                 Definitive   Documentation that complies with Section 4 of the Agreement;

·                 Participation of   the Consenting Noteholders, subject to the terms of the Agreement; and

·                 Delivery of   customary opinions, as reasonably determined by the parties.
    

 

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Exhibit B-1 to the Amended and Restated Transaction Support Agreement

 

Form of Transferee Joinder

 

This joinder (this “Joinder”) to the Amended and Restated Transaction Support Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Amended Agreement”), dated as of [DATE], by and among:  (i) Ascent and Monitronics, (ii) the Consenting Noteholders thereunder, and (iii) the Consenting Term B-2 Lenders thereunder, is executed and delivered by [                            ] (the “Joining Party”) as of [                                 ].  Each capitalized term used herein but not otherwise defined shall have the meaning ascribed to it in the Amended Agreement.

 

1.                                      Agreement to be Bound.  The Joining Party hereby acknowledges that it has read and understands the Amended Agreement (including the exhibits and schedules attached thereto, which includes, without limitation, the Term Sheet) and agrees to be bound by all of the terms of the Amended Agreement, a copy of which is attached to this Joinder as Annex 1 (as the same has been or may be hereafter amended, restated, supplemented or otherwise modified from time to time in accordance with the provisions thereof).  The Joining Party shall hereafter be deemed to be a Party for all purposes under the Amended Agreement and one or more of the entities comprising the Consenting Noteholders.

 

2.                                      Representations and Warranties.  The Joining Party hereby represents and warrants to each other Party to the Amended Agreement that, as of the date hereof, such Joining Party (a) is the legal or beneficial holder of, and has all necessary authority (including authority to bind any other legal or beneficial holder) with respect to the Notes identified below its name on the signature page hereto, and (b) makes, as of the date hereof, the representations and warranties set forth in Section 17 of the Amended Agreement to each other Party.

 

3.                                      Governing Law.  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.

 

4.                                      Notice.  All notices and other communications given or made pursuant to the Amended Agreement shall be sent to:

 

To the Joining Party at:

 

[JOINING PARTY]
 [ADDRESS]
 Attn:
 Facsimile: [FAX]
 EMAIL:

 

 

IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be executed as of the date first written above.

 

	
 
    	
Name   of Transferor:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name   of Joinder Party:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
Principal   Amount of Notes:
    
	
 
    	
 
    
	
 
    	
$
    
					

 

 

Annex 1 to the Form of Transferee Joinder

 

34

 

Exhibit B-2 to the Amended and Restated Transaction Support Agreement

 

Form of Loan Transferee Joinder

 

This joinder (this “Joinder”) to the Amended and Restated Transaction Support Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Amended Agreement”), dated as of [DATE], by and among:  (i) Ascent and Monitronics, (ii) the Consenting Noteholders thereunder, and (iii) the Consenting Term B-2 Lenders is executed and delivered by [                            ] (the “Joining Party”) as of [                          ].  Each capitalized term used herein but not otherwise defined shall have the meaning ascribed to it in the Amended Agreement.

 

1.                                      Agreement to be Bound.  The Joining Party hereby acknowledges that it has read and understands the Amended Agreement (including the exhibits and schedules attached thereto, which includes, without limitation, the Term Sheet) and agrees to be bound by all of the terms of the Amended Agreement, a copy of which is attached to this Joinder as Annex 1 (as the same has been or may be hereafter amended, restated, supplemented or otherwise modified from time to time in accordance with the provisions thereof).  The Joining Party shall hereafter be deemed to be a Party for all purposes under the Amended Agreement.

 

2.                                      Representations and Warranties.  The Joining Party hereby represents and warrants to each other Party to the Amended Agreement that, as of the date hereof, such Joining Party (a) is the legal or beneficial holder of, and has all necessary authority (including authority to bind any other legal or beneficial holder) with respect to the Term B-2 Loans identified below its name on the signature page hereto, and (b) makes, as of the date hereof, the representations and warranties set forth in Section 17 of the Amended Agreement to each other Party.

 

3.                                      Governing Law.  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.

 

4.                                      Notice.  All notices and other communications given or made pursuant to the Amended Agreement shall be sent to:

 

To the Joining Party at:

 

[JOINING PARTY]
 [ADDRESS]
 Attn:
 Facsimile: [FAX]
 EMAIL:

 

35

 

IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be executed as of the date first written above.

 

	
 
    	
Name   of Transferor:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name   of Joinder Party:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
Principal   Amount of Term B-2 Loans:
    
	
 
    	
 
    
	
 
    	
$
    
					

 

 

Annex 1 to the Form of Loan Transferee Joinder

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