Document:

Exhibit 10.1

EXECUTION   VERSION THIS RESTRUCTURING SUPPORTAGREEMENTANDTHE DOCUMENTS PROPOSED ATTACHED   HERETO COLLECTIVELY DESCRIBE A RESTRUCTURING FOR THE COMPANY PARTIES THAT   WOULD BE EFFECTUATED THROUGH PARTIAL PRE-PACKAGED CHAPTER THE BANKRUPTCY   COURT. 11 CASES IN THIS RESTRUCTURING SUPPORT AGREEMENT IS NOT AN OFFER WITH   RESPECT TO ANY SECURITIES OR A SOLICITATION OF ACCEPTANCES OF A CHAPTER 11   PLAN WITHIN THE MEANING OF SECTION 1125 OF THE BANKRUPTCY CODE. ANY SUCH   OFFER OR SOLICITATION WOULD COMPLY WITH ALL APPLICABLE SECURITIES LAWS AND/OR   PROVISIONS OF THE BANKRUPTCY CODE. NOTHING CONTAINED IN THIS RESTRUCTURING   SUPPORT AGREEMENT SHALL BE AN ADMISSION OF FACT OR LIABILITY OR, UNTIL THE   OCCURRENCE OF THE AGREEMENT EFFECTIVE DATE ON THE TERMS DESCRIBED HEREIN,   DEEMED BINDING ON THE PARTIES HERETO. THIS RESTRUCTURING SUPPORT AGREEMENT   DOES NOT PURPORT TO SUMMARIZEALLOFTHETERMS,CONDITIONS,REPRESENTATIONS,   WARRANTIES, AND OTHER PROVISIONS WITH RESPECT TO THE TRANSACTIONS DESCRIBED   HEREIN, WHICH TRANSACTIONS ARE SUBJECT TO THE COMPLETION OF DEFINITIVE   DOCUMENTS INCORPORATING THE TERMS SET FORTH HEREIN. THE CLOSING OF ANY   TRANSACTION SHALL BE SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN SUCH   DEFINITIVE DOCUMENTS AND THE APPROVAL RIGHTS OF THE PARTIES SET FORTH HEREIN AND   IN SUCH DEFINITIVE DOCUMENTS. RESTRUCTURING SUPPORT AGREEMENT This   RESTRUCTURING SUPPORT AGREEMENT (together with all exhibits, annexes, and   schedules hereto, as each may be amended, restated, amended and restated,   supplemented, or otherwise modified from time to time in accordance with the   terms hereof, this “Agreement”), dated as of May 20, 2019, is entered into by   and among: (i) Monitronics International, Inc. (“Monitronics”) and its direct   and indirect domestic subsidiaries that are signatories to this Agreement   (such subsidiaries and Monitronics, collectively, the “Company Parties”),   (ii) the undersigned Noteholders (as defined below) (the “Consenting   Noteholders”), (iii) the undersigned First Lien Term Lenders (as defined   below) (the “Consenting Term Lenders”), (iv) Ascent Capital Group, Inc.   (“Ascent”), and (v) each transferee who becomes a Permitted Transferee (as   defined below) in accordance with Section 10 (each of the foregoing described   in sub-clauses (i) – (v), a “Party” and, collectively, the “Parties”). Each   of the Consenting Noteholders, the Consenting Term Lenders, and their   Permitted Transferees (if any) is a “Consenting Creditor,” which are   collectively referred to herein as the “Consenting Creditors”. 1 

    

 

 

EXECUTION   VERSION Capitalized terms used but not otherwise defined herein have the   meaning ascribed to such terms in the Restructuring Term Sheet (as defined   below). RECITALS WHEREAS, the Company Parties, the Consenting Creditors and   Ascent have in good faith and at arm’s length negotiated, or been apprised of   such negotiations, and agreed to the terms of a restructuring transaction for   the Company Parties in accordance with, subject to the terms and conditions   in, and consistent in all material respects with this Agreement (including   the Restructuring Term Sheet attached hereto as Exhibit A, together with all   exhibits, annexes, and schedules thereto, the “Restructuring Term Sheet”),   the Rights Offering and Equity Commitment Term Sheet attached hereto as Exhibit   B, the DIP/Exit Facility Commitment attached hereto as Exhibit C, and the   Takeback Exit Term Loan Facility Term Sheet attached hereto as Exhibit D,   each of which are incorporated herein by reference (including, as applicable,   the Non-Ascent Restructuring (as defined below), collectively, the   “Restructuring”); WHEREAS, the Company Parties intend to commence voluntary   reorganization cases (the “Chapter 11 Cases”) under chapter 11 of title 11 of   the Bankruptcy Code (defined below) in the United States Bankruptcy Court for   the Southern District of Texas, Houston Division (the “Bankruptcy Court”) to   consummate the Restructuring pursuant to a partial prepackaged chapter 11   plan of reorganization consistent in all material respects with this   Agreement (together with all exhibits, annexes, and schedules thereto, as   each may be amended, restated, amended and restated, supplemented, or   otherwise modified in accordance with the terms of this Agreement, the   “Plan”); WHEREAS, the Company Parties, the First Lien Agent, and certain of   the First Lien Revolving Lenders entered into that certain Waiver No. 1 to   Credit Agreement, dated as of March 28, 2019 and that certain Waiver No. 2 to   Credit Agreement, dated as of April 30, 2019, pursuant to which the First   Lien Revolving Lenders party thereto agreed to waive certain conditions   precedent to borrowing pursuant to the terms thereof; WHEREAS, the Company   Parties, the First Lien Agent, and certain of the Consenting Term Lenders   entered into that certain Forbearance Agreement, dated as of April 1, 2019,   that certain Amendment Amendment Amendment Amendment No. No. No. No. 1 2 3 4   5 to to to to to Forbearance Forbearance Forbearance Forbearance Agreement,   Agreement, Agreement, Agreement, dated dated dated as as as of of of April   April April 12, 24, 30, 3, 2019, 2019, 2019, 2019, 2019, that that that that   that that certain certain certain certain certain certain dated as of May   Amendment No. Amendment No. Amendment No. Forbearance Agreement, dated as of   May 8, 6 to Forbearance Agreement, dated as of May 10, 2019, and 7 to   Forbearance Agreement, dated as of May 15, 2019 (together with the the the on   foregoing amendments, the “Lender Forbearance Agreement”), pursuant to which   (i) Consenting Term Lenders party thereto agreed to temporarily forbear on   enforcement of Specified Defaults (as defined in the Lender Forbearance   Agreement), (ii) commencing April 24, 2019, the principal amount of all   outstanding Obligations (as defined in the Credit Agreement) due under the   Credit Agreement began accruing interest at a fluctuating interest rate per   annum at all times equal to the Default Rate (as defined in the Credit   Agreement) to the 2 

    

 

EXECUTION   VERSION fullest extent permitted by applicable law through the date hereof (the   amount of such interest accruing through the date hereof, the “Default   Interest Amount”), and (iii) as of the date that is one day after the   Agreement Effective Date, interest on the principal amount of all outstanding   Obligations under the Credit Agreement shall accrue at the non-default rate;   WHEREAS, the Company Parties and certain of the Consenting Noteholders   entered into that certain Forbearance Agreement, dated as of May 1, 2019 (as   amended on May 7, 2019, May 10, 2019, and May 15, 2019, the “Noteholder   Forbearance Agreement”), pursuant to which the Consenting Noteholders party   thereto agreed to temporarily forbear on enforcement of the Specified Default   (as defined in the Noteholder Forbearance Agreement); WHEREAS, the Company   Parties have agreed to conduct an equity Rights Offering (as defined below),   substantially on the terms set forth herein, in the Restructuring Term Sheet,   and the Rights Offering and Equity Commitment Term Sheet (as defined below)   and in accordance with the Rights Offering Procedures (as defined below),   which Rights Offering will be solicited by Monitronics and which will be in   the amount of $177 million; WHEREAS, the Equity Commitment Parties (as   defined below) have agreed to purchase New Common Stock (as defined below) on   the terms and conditions set forth in the Restructuring Term Sheet, the   Rights Offering and Equity Commitment Term Sheet, and the Put Option   Agreement (as defined below) for an aggregate purchase price of $100 million   by exchanging the Contributed Term Loans (as defined in the Rights Offering   and Equity Commitment Term Sheet); WHEREAS, each Cash Opt Out Noteholder (as   defined below) will be offered as part of the Rights Offering the opportunity   to purchase New Common Stock on the terms and conditions set forth in the   Rights Offering and Equity Commitment Term Sheet and in accordance with the   Rights Offering Procedures; WHEREAS, the Consenting Noteholders that are set   forth on a schedule to the Put Option Agreement, which schedule will be in   effect upon execution of the Put Option Agreement and has been disclosed to   the Parties to this Agreement but is subject to change as provided in the Put   Option Agreement (collectively in such capacity, the “Backstop Commitment   Parties”), have agreed to backstop the Rights Offering on the terms set forth   herein, in the Restructuring Term Sheet, in the Rights Offering and Equity   Commitment Term Sheet, and in the Put Option Agreement; WHEREAS, in   connection with the Restructuring, solely to the extent that the Non-Ascent   Restructuring Toggle (as defined below) has not occurred, the Parties agree   that Ascent shall merge with Monitronics, with Reorganized Monitronics (as   defined below) as the surviving entity (the “Merger”), and as a result of the   Merger, all assets of Ascent at the time of the Merger (including all cash at   Ascent (the “Ascent Cash Amount”)) shall become assets of Reorganized   Monitronics and the holders of Ascent’s common stock shall receive New Common   Stock in the amount of the Ascent Share Distribution (as defined below) on   the terms and conditions set forth in the Restructuring Term Sheet; 3 

    

 

EXECUTION   VERSION WHEREAS, the Takeback Exit Term Loan Facility Lenders (as defined   below) have agreed, among other things, to provide the Takeback Exit Term   Loan Facility (as defined below) in an aggregate dollar amount of   $822,500,000, on the terms and conditions set forth in the Takeback Exit Term   Loan Facility Term Sheet; WHEREAS, pursuant to the DIP/Exit Facility   Commitment (as defined below), the DIP Lenders (as defined below) have   committed, among other things, to provide the DIP Facility (as defined below)   in an aggregate dollar amount of $245 million, all on the terms and subject   to the conditions set forth in the DIP/Exit Facility Commitment; and WHEREAS,   in the event that the Non-Ascent Restructuring Toggle (as defined below) has   occurred: (a) the Parties shall pursue the Restructuring without the   inclusion of the Merger; (b) the Company Parties shall consummate the   Restructuring without Ascent’s participation; (c) the Backstop Commitment   Parties shall pay the Ascent Default Amount (as defined below) and receive   the Ascent Default Shares (as defined below) on the terms and conditions set   forth in the Rights Offering and Equity Commitment Term Sheet and the Put   Option Agreement; (d) the holders of Ascent’s common stock shall not receive   the Ascent Share Distribution; (e) Ascent shall make the Toggle Contribution   (as defined below), subject to the receipt by Ascent of the release   contemplated in the Restructuring Term Sheet; (f) 100% of the New Common   Stock to be issued and outstanding as of the Plan Effective Date, subject to   dilution by the Post-Emergence Incentive Plan, shall be distributed to   creditors of Monitronics pursuant to the Plan, the Rights Offering, the   Equity Commitments, and the Put Option Agreement (and not to Ascent or   shareholders of Ascent) (the foregoing clauses (a) through (f), collectively,   the “Non-Ascent Restructuring”); and (g) the Parties (other than Ascent)   shall negotiate and work together in good faith to make appropriate   modifications to the Definitive Documents to effectuate the Non-Ascent   Restructuring. 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:   Section 1.Definitions and Interpretation. 1.01.Definitions. The following   terms shall have the following definitions: “Ad Hoc Lender Group” means that   group of certain First Lien Term Lenders (or nominees, investment managers,   advisors or subadvisors for the beneficial owners of the Term Loans held by   such First Lien Term Lenders) under the Credit Agreement represented by Jones   Day and Evercore L.L.C. “Ad Hoc Noteholder Group” means that group of certain   beneficial owners (or nominees, investment managers, advisors or subadvisors   for the beneficial owners) of the Notes issued under the Notes Indenture   represented by Stroock & Stroock & Lavan LLP and Houlihan Lokey   Capital, Inc. 4 

    

 

EXECUTION   VERSION “Affiliate” means, with respect to any Person, any other Person   controlled by, controlling or under common control with such Person; provided   that, for purposes of this Agreement, no Company Party shall be deemed to be   an Affiliate of any Consenting Creditor. As used in this Agreement, “control”   (including, with its correlative meanings, “controlling,” “controlled by” and   “under common control with”) shall mean possession, directly or indirectly,   of power to direct or cause the direction of management or policies (whether   through ownership of securities, by contract or otherwise). “Agreement” shall   have the meaning ascribed to it in the preamble to this Agreement and, for   the avoidance of doubt, includes all the exhibits, annexes, and schedules   hereto in accordance with Section 17.02. “Agreement Effective Date” means the   date on which all of the conditions set forth in Section 2 have been   satisfied or waived by the appropriate Party or Parties in accordance with   this Agreement. “Agreement Effective Period” means the period from the   Agreement Effective Date to the Termination Date. “Alternative Restructuring   Proposal” means any plan, inquiry, proposal, offer, bid, term sheet,   discussion, or agreement with respect to a sale, disposition, new-money   investment, restructuring, reorganization, merger, amalgamation, acquisition,   consolidation, dissolution, debt investment, equity investment, liquidation,   asset sale, share issuance, tender offer, recapitalization, plan of   reorganization, share exchange, business combination, joint venture or   similar transaction involving any one or more Company Parties, or any   Affiliates of the Company Parties, or the debt, equity, or other interests in   any one or more Company Parties or any Affiliates of the Company Parties   (including a Superior Proposal), in each case other than the Restructuring,   but, for the avoidance of doubt, excluding the Non-Ascent Restructuring.   “Ascent” has the meaning ascribed to it in the recitals to this Agreement.   “Ascent Cash Amount” has the meaning ascribed to it in the recitals to this   Agreement. “Ascent Default Amount” has the meaning ascribed to it in the   Rights Offering and Equity Commitment Term Sheet. “Ascent Default Shares” has   the meaning ascribed to it in the Rights Offering and Equity Commitment Term   Sheet. “Ascent Equity Interests” means any equity interests (including common   stock, preferred stock, limited liability company interests, other equity   ownership interests, profit interests, options, warrants, rights, or other   securities or agreements to acquire or subscribe for, or which are   convertible into, any of the foregoing) in Ascent (in each case whether or   not arising under or in connection with any employment agreement). “Ascent   Share Distribution” has the meaning ascribed to it in the Restructuring Term   Sheet. 5 

    

 

EXECUTION   VERSION “Backstop Approval Order” has the meaning ascribed to it in the   Rights Offering and Equity Commitment Term Sheet. “Backstop Commitment” has   the meaning ascribed to it in the Rights Offering and Equity Commitment Term   Sheet. “Backstop Commitment Documents” has the meaning ascribed to it in   Section 3.01. “Backstop Commitment Parties” (each, individually, a “Backstop   Commitment Party”) has the meaning ascribed to it in the recitals to this   Agreement. “Backstop Commitment Shares” has the meaning ascribed to it in the   Rights Offering and Equity Commitment Term Sheet. “Bankruptcy Code” means   title 11 of the United States Code, 11 U.S.C. §§ 101–1532, as amended.   “Bankruptcy Court” has the meaning ascribed to it in the recitals to this   Agreement. “Business Day” means any day other than a Saturday, Sunday, or   other day on which commercial banks are authorized to close under the Laws of   the state of New York. “Cash Payout” has the meaning ascribed to it in the   Restructuring Term Sheet. “Cash Opt Out Noteholder” has the meaning ascribed   to it in the Restructuring Term Sheet. “Chapter 11 Cases” has the meaning   ascribed to it in the recitals to this Agreement. “Claim” has the meaning   ascribed to it in section 101(5) of the Bankruptcy Code. “Commitment Parties”   means, collectively, the Backstop Commitment Parties and the Equity   Commitment Parties. “Company Claims” means any Claim against a Company Party.   “Company Parties” has the meaning ascribed to it in the preamble to this   Agreement. “Compensation Arrangements” means any compensation and benefits   plans, policies, agreements, programs, and arrangements of any member of the   Consolidated Group. “Confidentiality Agreement” means an executed   confidentiality agreement, including with respect to the issuance of a   “cleansing letter” or other public disclosure of material non-public   information agreement, in connection with the proposed Restructuring.   “Confirmation Order” means the order of the Bankruptcy Court confirming the   Plan under section 1129 of the Bankruptcy Code, which Confirmation Order   shall be in accordance 6 

    

 

EXECUTION   VERSION with this Agreement and which, for the avoidance of doubt, may be the   same order as the Disclosure Statement Order. “Consenting Term Lenders” has   the meaning ascribed to it in the preamble to this Agreement. “Consenting   Noteholders” has the meaning ascribed to it in the preamble to this   Agreement. “Consenting Creditors” has the meaning ascribed to it in the   preamble to this Agreement. “Consolidated Group” means Monitronics and its   Affiliates and subsidiaries including, for the avoidance of doubt, Ascent.   “Credit Agreement” means that certain Credit Agreement dated as of March 23,   2012, by and among Monitronics, as borrower, Bank of America, N.A., as   administrative agent, and the lenders from time to time party thereto, as   amended by Amendment No. 1 to Credit Agreement and Consent dated as of   November 7, 2012, Amendment No. 2 to Credit Agreement dated as of March 25,   2013, Amendment No. 3 to the Credit Agreement and Amendment No. 1 to Guaranty   Agreement dated as of August 16, 2013, Amendment No. 4 to Credit Agreement   dated as of February 17, 2015, Amendment No. 5 to Credit Agreement dated as   of April 9, 2015, Amendment No. 6 to Credit Agreement dated as of September   30, 2016, and Amendment No. 7 to Credit Agreement dated as of December 29,   2016, and as modified by that certain Waiver No. 1 to Credit Agreement, dated   as of March 28, 2019 and that certain Waiver No. 2 to Credit Agreement, dated   as of April 30, 2019. “Creditor Professional Agreements” means the Jones Day   Letter, the Evercore Letter, the Stroock Letter and the Houlihan Letter.   “Debtors” means the Company Parties in their capacity as debtors in the   Chapter 11 Cases. “Default Interest Amount” has the meaning ascribed to it in   the Recitals. “Definitive Documents” has the meaning ascribed to it in   Section 3.01, which Definitive Documents shall be in accordance with this   Agreement. “DIP Documents” has the meaning ascribed to it in Section 3.01.   “DIP/Exit Facility Commitment” means the commitment letter attached as   Exhibit C hereto. “DIP/Exit Facility Documents” means the DIP Documents and   the New Exit Facilities Documents. “DIP Facility” has the meaning ascribed to   it in the Restructuring Term Sheet. 7 

    

 

EXECUTION   VERSION “DIP Lenders” has the meaning ascribed to it in the Restructuring   Term Sheet. “DIP Orders” has the meaning ascribed to it in the Restructuring   Term Sheet. “Disclosure Statement” means the disclosure statement with respect   to the Plan. “Disclosure Statement Order” means any conditional, interim   and/or final order of the Bankruptcy Court approving the Disclosure Statement   under section 1125 of the Bankruptcy Code and any solicitation motion filed   in support thereof, which Disclosure Statement and Disclosure Statement Order   shall be in accordance with this Agreement. For the avoidance of doubt, the   Disclosure Statement Order may be the same order as the Confirmation Order.   “Equity Commitments” has the meaning ascribed to it in the Rights Offering   and Equity Commitment Term Sheet. “Equity Commitment Parties” (each, an   “Equity Commitment Party”) means the Consenting Noteholders that are set   forth on a schedule to the Put Option Agreement, which schedule will be in   effect upon execution of the Put Option Agreement and has been disclosed to   the Parties to this Agreement but is subject to change as provided in the Put   Option Agreement. “Exchange Act” means the Securities Exchange Act of 1934,   as amended. “Existing Equity Interests” means, collectively, any equity   interests (including common stock, preferred stock, limited liability company   interests, other equity ownership interests, profit interests, options,   warrants, rights, or other securities or agreements to acquire or subscribe   for, or which are convertible into, any of the foregoing) in any Company   Party (in each case whether or not arising under or in connection with any   employment agreement). “Evercore Letter” means that certain engagement   letter, dated as of January 29, 2019, between Evercore Group L.L.C., Jones   Day, and Monitronics. “Final DIP Order” has the meaning ascribed to it in the   Restructuring Term Sheet. “First Day Pleadings” means the “first day”   pleadings that the Company Parties determine, in consultation with counsel   for the Ad Hoc Noteholder Group, counsel for the Ad Hoc Lender Group, and   counsel for Ascent, are necessary or desirable to file with the Bankruptcy   Court. “First Lien Agent” means Bank of America, N.A., as administrative   agent under the Credit Agreement. “First Lien Revolving Lenders” means those   Revolving Credit Lenders (as defined in the Credit Agreement) party to the   Credit Agreement. “First Lien Term Lenders” means those Term Lenders (as   defined in the Credit Agreement) party to the Credit Agreement. 8 

    

 

EXECUTION   VERSION “Governance Documents” means the new organizational and governance   documents for Reorganized Monitronics, including charters, bylaws, articles   of incorporation, operating agreements, or other organization or formation   documents, as applicable, which shall be materially consistent with the   Governance Term Sheet attached as Exhibit 1 to the Restructuring Term Sheet   and section 1123(a)(6) of the Bankruptcy Code and otherwise acceptable to the   Commitment Parties in consultation with the Required Consenting Term Lenders   and subject to the consent rights set forth in Section 3.02 of this   Agreement. “Governmental Entity” means any applicable federal, state, local   or foreign government or any agency, bureau, board, commission, court or   arbitral body, department, political subdivision, regulatory or   administrative authority, tribunal or other instrumentality thereof, or any   self-regulatory organization. “Houlihan Letter” means that certain letter   agreement, dated as of December 26, 2018, by and among Houlihan Lokey   Capital, Inc., Stroock & Stroock & Lavan LLP, the Company Parties,   and Ascent. “Indenture Trustee” means U.S. Bank National Association, as   trustee under the Notes Indenture. “Information Sharing Agreement” has the   meaning ascribed to it in the Restructuring Term Sheet. “Insolvency   Proceeding” means any corporate action, legal proceedings or other procedure   or step taken in any jurisdiction in relation to: (a)the suspension of   payments, a moratorium of any indebtedness, winding-up, bankruptcy,   liquidation, dissolution, administration, receivership, administrative   receivership, judicial composition, assignment for the benefit of creditors,   or reorganization (by way of voluntary arrangement, scheme or otherwise) of   any member of the Consolidated Group, including under the Bankruptcy Code;   (b) a composition, conciliation, compromise or arrangement with the creditors   generally of any member of the Consolidated Group or an assignment by any   member of the Consolidated Group of its assets for the benefit of its   creditors generally or any member of the Consolidated Group becoming subject   to a distribution of its assets; (c)the appointment of a liquidator,   receiver, administrator, administrative receiver, compulsory manager or other   similar officer in respect of any member of the Consolidated Group or any of   its assets; (d) Group; or enforcement of any security over any assets of any   member of the Consolidated (e) any procedure or step in any jurisdiction   analogous to those set out in the preceding sub-paragraphs (a) through (d). 9   

    

 

EXECUTION   VERSION “Interim DIP Order” has the meaning ascribed to it in the   Restructuring Term Sheet. “Joinder” means a joinder to this Agreement   substantially in the form attached hereto as Exhibit E. “Jones Day Letter”   means that certain Fee and Expense Reimbursement Agreement, dated January 24,   2019, between Monitronics and Jones Day. “Law” means any federal, state,   local, or foreign law (including common law), statute, code, ordinance, rule,   regulation, order, ruling, or judgment, in each case, that is validly   adopted, promulgated, issued, or entered by a governmental authority of   competent jurisdiction (including the Bankruptcy Court). “Merger” has the   meaning ascribed to it in the recitals to this Agreement. “Merger Approval   Outside Date” means the date that is no later than sixty-five (65) days after   the Petition Date. “Merger Approvals” has the meaning ascribed to it in   Section 6.02(a). “Monitronics” has the meaning ascribed to it in the preamble   to this Agreement. “Net Cash Amount” has the meaning ascribed to it in   Section 6.02(b). “New Board” has the meaning ascribed to it in the   Restructuring Term Sheet. “New Common Stock” means the new shares of common   stock of Reorganized Monitronics authorized to be issued pursuant to the   Plan. “New Exit Facilities” has the meaning ascribed to it in the   Restructuring Term Sheet. “New Exit Facilities Documents” has the meaning   ascribed to it in Section 3.01. “New Exit Facility Lenders” has the meaning   ascribed to it in the Restructuring Term Sheet. “Non-Ascent Restructuring”   has the meaning ascribed to it in the recitals of this Agreement. “Non-Ascent   Restructuring Toggle” has the meaning ascribed to it in Section 6.02.   “Noteholders” means the beneficial owners (or nominees, investment managers,   advisors or subadvisors for the beneficial owners) of the Notes. “Notes”   means the 9.125% Senior Notes due 2020 issued by Monitronics under the Notes   Indenture. 10 

    

 

EXECUTION   VERSION “Notes Indenture” means 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), by and among Monitronics, the   guarantors named thereunder, and the Indenture Trustee. “Outside Date” means   the date that is no later than eighty-two (82) days after the Petition Date,   which date may not be extended without the written consent of the Company   Parties, the Required Consenting Noteholders, the Required Consenting Term   Lenders, and prior to the occurrence of the Non-Ascent Restructuring Toggle,   Ascent. “Parties” has the meaning ascribed to it in the preamble to this   Agreement. “Permitted Transfer” means a Transfer of any Company Claims that   meets the requirements of Section 10. “Permitted Transferee” means each   transferee of any Company Claims who meets the requirements of Section 10.   “Person” means an individual, a partnership, a joint venture, a limited   liability company, a corporation, a trust, an unincorporated organization, a   group, a Governmental Entity, or any legal entity or association. “Petition   Date” means the date on which the Company Parties commence the Chapter 11   Cases in accordance with this Agreement. “Petition Date Milestone” has the   meaning ascribed to it in Schedule 1 to this Agreement. “Plan” has the   meaning ascribed to it in the recitals of this Agreement. “Plan Effective   Date” means the date on which all conditions to consummation of the Plan have   been satisfied in full or waived, in accordance with the terms of the Plan,   and the Plan becomes effective. “Plan Supplement” means the compilation of   documents and forms of documents, schedules, and exhibits to the Plan that   will be filed by the Company Parties with the Bankruptcy Court in accordance   with this Agreement and shall include (i) certain Governance Documents, (ii)   the Takeback Exit Term Loan Facility Documents, (iii) the DIP/Exit Facility   Documents, (iv) a schedule of rejected contracts, (v) a list of retained   causes of action, and (vi) the identity of the members of the New Board.   “Post-Emergence Incentive Plan” has the meaning ascribed to it in the   Restructuring Term Sheet. “Prepetition Solicitation Commencement Date” has   the meaning ascribed to it in Schedule 1 to this Agreement. 11 

    

 

EXECUTION   VERSION “Prepetition Solicitation Deadline” has the meaning ascribed to it in   Schedule 1 to this Agreement. “Put Option Agreement” means an agreement to be   executed by the Company Parties and the Commitment Parties no later than five   (5) Business Days after the Agreement Effective Date, setting forth, among   other things, the terms and conditions of the Backstop Commitments, the   Equity Commitments, and the payment of the Put Option Premium and the   Commitment Party Professional Fees (each as defined in the Rights Offering   and Equity Commitment Term Sheet), which Put Option Agreement shall be   materially consistent with the terms set forth herein, in the Restructuring   Term Sheet, and in the Rights Offering and Equity Commitment Term Sheet, and   otherwise acceptable to each of the Commitment Parties and reasonably   acceptable to the Required Consenting Term Lenders, and subject to the   consent rights set forth in Section 3.02 of this Agreement. “Qualified   Market-Maker” means an entity that (i) holds itself out to the market as   standing ready in the ordinary course of business to purchase from and sell   to customers Company Claims, or enter with customers into long and/or short   positions in Company Claims, in its capacity as a dealer or market maker in   such Company Claims; and (ii) is in fact regularly in the business of making   a market in claims, interests and/or securities of issuers or borrowers.   “Qualified Market-Maker Joinder Date” has the meaning ascribed to it in   Section 10.03 of this Agreement. “Reorganized Debtors” means, from and after   the Plan Effective Date, any and all Debtors, as reorganized under and   pursuant to the Plan, including any successor thereto (to the extent   applicable), by merger, consolidation, transfer of all or substantially all   its assets or otherwise, including Reorganized Monitronics. “Reorganized   Monitronics” means, from and after the Plan Effective Date, Monitronics, as   reorganized under and pursuant to the Plan, including any successor thereto   (to the extent applicable), by merger, consolidation, transfer of all or   substantially all of its assets or otherwise. “Required Consenting Term   Lenders” means, as of any date of determination, those Consenting Term   Lenders holding more than 50% of the aggregate principal amount of the Term   Loans that are held by all Consenting Term Lenders; provided, however, that   as long as the Ad Hoc Lender Group holds at least 50% of the aggregate   principal amount of the Term Loans, “Required Consenting Term Lenders” shall   mean, as of any date of determination, those Consenting Term Lenders holding   more than 50% of the aggregate principal amount of the Term Loans that are   held by Consenting Term Lenders that are members of the Ad Hoc Lender Group.   “Required Consenting Noteholders” means, as of any date of determination,   those Consenting Noteholders holding more than 662/3% of the aggregate   principal amount of the Notes that are held by all Consenting Noteholders;   provided, however, that as long as the Ad Hoc Noteholder Group holds at least   50% of the aggregate principal amount of the Notes, “Required Consenting   Noteholders” shall mean, as of any date of determination, those Consenting   Noteholders holding more than 662/3% of the aggregate principal amount of the   Notes that are held by Consenting Noteholders that are members of the Ad Hoc   Noteholder Group. 12 

    

 

EXECUTION   VERSION “Restructuring” has the meaning ascribed to it in the recitals to   this Agreement. “Restructuring Term Sheet” has the meaning ascribed to it in   the recitals to this Agreement. “Revolving Credit Loans” means the Total   Revolving Credit Outstandings (as defined in the Credit Agreement). “Rights”   has the meaning ascribed to it in the Rights Offering and Equity Commitment   Term Sheet. “Rights Offering” has the meaning ascribed to it in the Rights   Offering and Equity Commitment Term Sheet. “Rights Offering and Equity   Commitment Term Sheet” means the term sheet attached as Exhibit B hereto.   “Rights Offering Approval Order” means the order of the Bankruptcy Court   approving the Rights Offering Procedures, the Rights Offering Solicitation   Materials and any motion filed in support thereof, which Rights Offering   Approval Order shall be in accordance with this Agreement and which, for the   avoidance of doubt, may be the same order as the Disclosure Statement Order.   “Rights Offering Exercise Deadline” has the meaning ascribed to it in the   Rights Offering and Equity Commitment Term Sheet. “Rights Offering   Participants” has the meaning ascribed to it in the Restructuring Term Sheet.   “Rights Offering Procedures” means the procedures governing the Rights   Offering, which Rights Offering Procedures shall be materially consistent   with the terms set forth in the Rights Offering and Equity Commitment Term   Sheet and otherwise acceptable to each of the Backstop Commitment Parties and   subject to the consent rights set forth in Section 3.02. “Rights Offering   Solicitation Materials” has the meaning ascribed to it in the Rights Offering   and Equity Commitment Term Sheet. “RSA Milestones” has the meaning set forth   in Section 8.01(a) of this Agreement. “Rules” means Rule 501(a) of the   Securities Act. “SEC” means the U.S. Securities and Exchange Commission.   “Securities Act” means the Securities Act of 1933, as amended. “Solicitation   Materials” means all solicitation materials in respect of the Plan, together   with the Disclosure Statement, which Solicitation Materials shall be in   accordance with this Agreement. 13 

    

 

EXECUTION   VERSION “Stroock Letter” means that certain letter agreement, dated as of   December 26, 2018, between Stroock & Stroock & Lavan LLP and the   Company Parties. “Superior Proposal” means a bona fide Alternative   Restructuring Proposal that the board of directors of Monitronics determines   in good faith would, if consummated, result in a superior transaction for the   Company Parties, their estates, and stakeholders, than the transactions   contemplated by this Agreement, after consultation with financial advisors   and outside legal counsel and taking into account (x) the likelihood and   timing of consummation and (y) all material legal, financial (including the   financing terms of any such proposal), conditionality, and other aspects of   such proposal, in each case as compared to the transactions contemplated by   this Agreement. “Takeback Exit Term Loan Facility” has the meaning ascribed   to it in the Restructuring Term Sheet. “Takeback Exit Term Loan Facility   Lenders” has the meaning ascribed to it in the Restructuring Term Sheet.   “Takeback Exit Term Loan Facility Documents” has the meaning ascribed to it   in Section 3.01. “Takeback Exit Term Loan Facility Term Sheet” means the term   sheet attached as Exhibit D hereto. “Term Loans” means the Term Loans (as   defined in the Credit Agreement). “Termination Date” means the date on which   termination of this Agreement is effective in accordance with Sections 15.01,   15.02, 15.03, 15.05, or 15.06. “Toggle Contribution” has the meaning set   forth in Section 7.01(k) of this Agreement. “Transfer” means to sell, resell,   reallocate, use, pledge, 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), participate,   donate, tender or otherwise encumber or dispose of, directly or indirectly   (including through derivatives, options, swaps, pledges, forward sales, or   other transactions). “Transfer Agreement” means an executed form of the   transfer agreement providing, among other things, that a transferee is bound   by the terms of this Agreement and substantially in the form attached hereto   as Exhibit F. “TSA” has the meaning ascribed to it in the Restructuring Term   Sheet. “Unsubscribed Shares” has the meaning ascribed to it in the Rights   Offering and Equity Commitment Term Sheet. 14 

    

 

EXECUTION   VERSION Section 2.Agreement Effectiveness 2.01.This Agreement shall become   effective and binding upon each of the Parties according to its terms as of   12:00 a.m., prevailing Eastern Time, on the date on which all of the   following conditions have been satisfied or waived in accordance with this   Agreement: (i) each of the Parties (including (a) Consenting Noteholders   holding, in the aggregate, in excess of 662/3% of the principal amount   outstanding of all Notes and (b) Consenting Term Lenders holding, in the   aggregate, in excess of 662/3% of the principal amount outstanding of all   Term Loans under the Credit Agreement) shall have executed and delivered   counterpart signature pages of this Agreement to counsel to each of the other   Parties in accordance with the confidentiality provisions of Sections 17.07   and 17.21 of this Agreement (which signature pages may be delivered by   counsel and in electronic form); and (ii) the Company Parties shall have   given written notice to counsel to each of the Consenting Creditors and   Ascent that they believe that each of the foregoing conditions set forth in   this Section 2 has been satisfied and that this Agreement is effective, and   counsel to each of the Consenting Creditors and Ascent shall have given   written agreement to counsel to the Company Parties confirming the same,   which notice and agreement shall be given promptly and may be given by email   (such date, the “Agreement Effective Date”). With respect to any Consenting   Creditor that becomes a party to this Agreement pursuant to Section 10.02   hereof, this Agreement shall become effective as to such Consenting Creditor   at the time it executes and delivers a Joinder or Transfer Agreement in   accordance with the terms hereof. Section 3.Definitive Documents.   3.01.Definitive Documents.The documents related to or otherwise utilized to   implement or effectuate the Restructuring (collectively, the “Definitive   Documents”) shall include: (a) the documentation in respect of the DIP   Facility and the Company Parties’ use of cash collateral, all pleadings in   support of approval thereof and all orders relating thereto (including any   exhibits, schedules, amendments, modifications, or supplements thereto),   including the DIP Orders (collectively, the “DIP Documents”); (b) any   disclosure documents or Securities Act filings related to the issuance of the   New Common Stock; (c) the Plan (including the Plan Supplement documents and   all other exhibits, annexes, and schedules thereto), all pleadings in support   of confirmation of the Plan and all orders relating thereto, including the   Confirmation Order; (d) (e) the First Day Pleadings and all orders relating   thereto; the Solicitation Materials, all pleadings in support of approval of   the Solicitation Materials and all orders relating thereto, including the   Disclosure Statement Order; (f) any documents, forms, proxies or agreements   required for (i) Ascent to solicit approval from its shareholders of the   Merger as contemplated under this Agreement, or (ii) Monitronics to register   the Ascent Share Distribution under the Securities Act; 15 

    

 

EXECUTION   VERSION (g) any documents or agreements governing the Takeback Exit Term Loan   Facility, including the credit agreement and collateral documents governing   the Takeback Exit Term Loan Facility (the “Takeback Exit Term Loan Facility   Documents”); (h) any documents or agreements governing the New Exit   Facilities, including the credit agreement and collateral documents governing   the New Exit Facilities (the “New Exit Facilities Documents”); (i) the Put   Option Agreement, the Rights Offering Procedures, the Rights Offering   Solicitation Materials, and any other documents or agreements governing the   Rights Offering, the Equity Commitments and the Backstop Commitments to be   made by the Commitment Parties (the “Backstop Commitment Documents”); (j) all   pleadings relating to the Company Parties’ entry into, and performance under,   the Rights Offering, the Put Option Agreement and any other Backstop   Commitment Documents and all orders relating thereto, including the Backstop   Approval Order and the Rights Offering Approval Order; (k) any other   exhibits, schedules, amendments, modifications, supplements, or other   documents and/or agreements relating to the Plan, the Plan Supplement, the   Solicitation Materials, the Disclosure Statement Order, or the Confirmation   Order; (l) (m) (n) (o) the Governance Documents; the Information Sharing   Agreement; the TSA (solely in the event the Non-Ascent Restructuring Toggle   occurs); such other definitive documentation relating to a recapitalization   or restructuring of the Company Parties as is necessary or desirable to   consummate the Restructuring as determined by the Company Parties, the   Required Consenting Noteholders, the Required Consenting Term Lenders, and   Ascent (provided that Ascent shall have no consent rights after the   occurrence of the Non-Ascent Restructuring Toggle); and (p)any deeds,   agreements, filings, notifications, pleadings, orders, certificates, letters,   instruments, or other documents related to the Restructuring (including   amendments, modifications, or supplements made from time to time thereto)   determined by the Company Parties, the Required Consenting Noteholders,   Consenting Term Lenders, and Ascent. any exhibits, as reasonably the Required   3.02.Consent Rights Regarding Definitive Documents.Each of the Definitive   Documents that remains subject to negotiation and completion shall, upon   completion, contain terms, conditions, representations, warranties and   covenants consistent in all material respects with the terms of this   Agreement and shall, except where otherwise specified in this Agreement, in   all respects be reasonably acceptable to the Company Parties, the Required   Consenting Noteholders, the Required Consenting Term Lenders (except with   respect to the TSA and Information Sharing Agreement), and Ascent. Any   amendment, modification or waiver of, or supplement to, any of the Definitive   Documents shall be reasonably acceptable to the Company Parties, the Required   Consenting Noteholders, the Required Consenting Term Lenders (except 16 

    

 

EXECUTION   VERSION with respect to the TSA and Information Sharing Agreement), and   Ascent. For the avoidance of doubt, after the occurrence of the Non-Ascent   Restructuring Toggle, Ascent shall have no consent rights over the Definitive   Documents other than the TSA. Section 4. Commitments of the Consenting   Creditors 4.01. General Commitments and Waivers. (a) During the Agreement   Effective Period, each Consenting Creditor agrees (severally and not jointly)   in respect of any and all of its Company Claims pursuant to this Agreement to   use good faith and commercially reasonable efforts (including, (i) with   respect to each Consenting Noteholder, directing the Indenture Trustee, as   necessary, and (ii) with respect to each Consenting Term Lender, directing   the First Lien Agent, as necessary) to: (i) support the Restructuring and   vote and exercise any powers or rights available to it (including in any   board, shareholders’, or creditors’ meeting or in any process requiring   voting or approval to which they are legally entitled to participate) in each   case in favor of any matter requiring approval to the extent necessary to   implement the Restructuring; (ii) negotiate in good faith to execute and   implement the Definitive Documents to which it is required to be a party or   to which its approval is required by this Agreement; and (iii) after the   occurrence of the Non-Ascent Restructuring Toggle, negotiate in good faith to   amend the Definitive Documents and enter into any other required agreements,   in each case in accordance with Section 3.02, as Restructuring. necessary to   consummate the Non-Ascent (b) During the Agreement Effective Period, each   Consenting Creditor agrees all of its Company Claims pursuant to this   (severally and not jointly) in respect of any and Agreement that it shall not   directly or indirectly: (i) exercise, or direct any other person to exercise,   any right or remedy for the enforcement, collection, or recovery of any of   the Company Claims against the Company Parties other than in accordance with   this Agreement; provided that nothing in this Agreement shall prevent any   Consenting Creditor from filing a proof of claim in the Chapter 11 Cases on   behalf of its respective Company Claims; (ii) object to, delay, impede, or   take any other action to interfere with the pursuit, implementation, or   consummation of the Restructuring or take any other action that is   inconsistent with, or that would delay or obstruct the proposal or   consummation of, the Restructuring, except as expressly permitted pursuant to   this Agreement; (iii) withdraw or revoke its tender, consent and/or vote with   respect to the Restructuring, except as expressly permitted pursuant to this   Agreement; 17 

    

 

EXECUTION   VERSION (iv)propose, file, support, vote for, or consent to any Alternative   Restructuring Proposal or engage in, continue, or otherwise participate in   any negotiations regarding any Alternative Restructuring Proposal or engage   in, continue, or otherwise participate in discussions regarding the   negotiation or formulation of, or otherwise pursue, any financing or other   equity proposal or offer; (v) propose, file, support, vote for, or consent to   any dissolution, winding up,   liquidation,reorganization,merger,consolidation,businesscombination,jointventure,   partnership, sale of assets, or restructuring for any of the Company Parties   other than as contemplated and agreed to as part of the Restructuring; (vi)   file any motion, pleading, or other document with the Bankruptcy Court or any   other court (including any modifications or amendments thereof) that is not   materially consistent with the Restructuring, this Agreement or the Plan or   take any other action that, in whole or in part, is not materially consistent   with the Restructuring, this Agreement or the Plan; (vii) initiate, or have   initiated on its behalf, any litigation or proceeding of any kind with   respect to this Agreement, the Restructuring, or the Chapter 11 Cases   contemplated herein against the Company Parties or the other Parties other   than to enforce this Agreement or any Definitive Document, to effectuate the   Restructuring in accordance therewith, or as otherwise permitted under this   Agreement; (viii)object to, delay, impede, or take any other action to   interfere with the Company Parties’ ownership and possession of their assets,   wherever located, or interfere with the automatic stay arising under section   362 of the Bankruptcy Code; provided, however, that nothing in this Agreement   shall limit the right of any Party to exercise any right or remedy provided   hereunder, under the Confirmation Order or any other Definitive Document;   (ix) take any action (or encourage or instruct any other party including the   First Lien 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 or Notes Indenture that is triggered or   that would be triggered as a result of the execution of this Agreement or the   undertaking of Ascent or the Company Parties to implement the Restructuring,   except as expressly permitted pursuant to this Agreement; or (x) Transfer,   other than in accordance with Section 10 hereof, any ownership (including any   beneficial ownership as defined in the Rule 13d-3 under the Exchange Act) in   any Company Claims to any affiliated or unaffiliated Person, including any   Person in which it may hold a direct or indirect beneficial interest.   4.02.Commitments with Respect to Chapter 11 Cases. (a) During the Agreement   Effective Period, each Consenting Creditor that is entitled to vote to accept   or reject the Plan pursuant to its terms agrees (severally and not jointly)   that it shall, subject to receipt by such Consenting Creditor, whether before   or after the commencement of the Chapter 11 Cases, of the Solicitation   Materials: 18 

    

 

EXECUTION   VERSION (i)vote each of its Company Claims to accept the Plan by timely   delivering its duly executed and completed ballot accepting the Plan no later   than the Prepetition Solicitation Deadline, subject to such Consenting   Creditor’s actual receipt of the Solicitation Materials (including the   ballot); (ii) to the extent it is permitted to elect whether to opt out of   the releases set forth in the Plan, not elect to opt out of the releases set   forth in the Plan by timely delivering its duly executed and completed   ballot(s) consistent with its election not to opt out (except such Consenting   Creditor shall not be prohibited from “opting out” of granting such a release   to any Party that has materially breached this Agreement); and (iii) not   change, withdraw, amend, or revoke (or cause to be changed, withdrawn,   amended, or revoked) any vote or election referred to in clauses (a)(i) and   (ii) above; provided, however, that nothing in this Agreement shall prevent   any Party from withholding, amending, or revoking (or causing the same) its   timely consent or vote with respect to the Plan if this Agreement has been   terminated in accordance with its terms with respect to such Party. (b)   During the Agreement Effective Period, each Consenting Noteholder and each   Backstop Commitment Party that is entitled to elect to opt out of the Cash   Payout pursuant to the terms of the Plan agrees (severally and not jointly)   that it shall elect to opt out of the Cash Payout by timely delivering its   duly executed and completed election form consistent with its election to opt   out of the Cash Payout. Notwithstanding any other provision of this   Agreement, including this Section 4, nothing in this Agreement shall require   any Party to incur any expenses, liabilities or other obligations, or to   commence litigation or agree to any commitments, undertakings, concessions,   indemnities, or other arrangements that could result in expenses,   liabilities, or other obligations to any Party or its Affiliates other than   as specifically stated in this Agreement and the exhibits hereto. For the   avoidance of doubt, each Consenting Creditor has entered into this Agreement   solely in its capacity as a holder of Company Claims, and the commitments and   obligations of Consenting Creditors under this Agreement do not apply to any   Consenting Creditor in its capacity as a beneficial owner (or the nominee,   investment manager, advisor or subadvisor for a beneficial owner) of Ascent   Equity Interests. 4.03.Forbearance. Commencing on the Agreement Effective   Date, each Consenting Creditor agrees to forbear, until the date that is one   day after the Petition Date, from the exercise of its rights (including any   right of set-off) or remedies it may have under the Credit Agreement and   Notes Indenture, as applicable, in each case, solely with respect to the   Company Parties’ current or anticipated defaults as set forth on Schedule 2   to this Agreement (the “Specified Defaults”) and on no other basis. Each   Consenting Creditor further agrees that if any applicable indenture trustee,   administrative agent or collateral agent takes any action inconsistent with   any such Consenting Creditor’s obligations under this Agreement, such   Consenting Creditor shall direct and use commercially reasonable efforts to   cause such indenture trustee, administrative agent or collateral agent to   cease and refrain from taking such actions. For the avoidance of doubt, the   Credit Agreement and the Notes Indenture shall remain in full force and   effect, and 19 

    

 

EXECUTION   VERSION are hereby ratified and confirmed, except, in each case, as expressly   modified in this Section 4.03. The forbearance set forth in this Section 4.03   shall not constitute a waiver with respect to any default or event of default   under the Credit Agreement or Notes Indenture (other than the Specified   Defaults during the term of the Agreement Effective Period) and shall not bar   any Consenting Creditor from filing a proof of claim or taking action to   establish the amount of such claim. Upon the termination of this Agreement, the   agreement of the Consenting Creditors to forbear from exercising rights and   remedies in accordance with this Section 4.03 shall immediately terminate   without requirement of any demand, presentment or protest of any kind, all of   which the Company Parties hereby waive. Section 5. Additional Provisions   Regarding the Consenting Creditors’ Commitments. Notwithstanding anything to   the contrary in this Agreement, and notwithstanding any delivery of a consent   or vote to accept the Plan by any Consenting Creditor, or any acceptance of   the Plan by any class of creditors, nothing in this Agreement shall: (a)be   construed to prohibit any Consenting Creditor from contesting whether any   matter, fact, or thing is a breach of, or is inconsistent with, this   Agreement, the Definitive Documents or the Restructuring; (b) be construed to   prohibit any Consenting Creditor from appearing as a party-in-interest in any   matter to be adjudicated in a Chapter 11 Case, so long as such appearance and   the positions advocated in connection therewith are not materially   inconsistent with this Agreement or the Restructuring, and are not for the   purpose of delaying, interfering, impeding, or taking any other action to   delay, interfere with or impede, directly or indirectly, the Restructuring; (c)   affect the ability of any Consenting Creditor to consult with any other   Consenting Creditor, the Company Parties, Ascent or any other party in   interest; (d) impair or waive the rights of any Consenting Creditor to assert   or raise any objection not prohibited under or inconsistent with this   Agreement; (e) prevent any Consenting Creditor from enforcing this Agreement   and/or any of the Definitive Documents; (f) prevent any Consenting Creditor   from exercising any of its rights and remedies under any of the Definitive   Documents; (g) obligate a Consenting Creditor to deliver a vote to support   the Plan or prohibit a Consenting Creditor from withdrawing such vote, in   each case from and after the Termination Date (other than a Termination Date   as a result of the occurrence of the Plan Effective Date); provided that upon   the withdrawal of any such vote after the Termination Date (other than a   Termination Date as a result of the occurrence of the Plan Effective Date),   such vote shall be deemed void ab initio and such Consenting Creditor shall   have the opportunity to change its vote; 20 

    

 

EXECUTION   VERSION (h) limit the rights of any Consenting Creditor to engage in any   discussions, enter into any agreements, or take any other action after the   Termination Date; (i) prevent a Consenting Creditor from taking any action   that is required in order to comply with applicable Law; provided, however,   that if any Consenting Creditor proposes to take any action that is otherwise   inconsistent with this Agreement or the Restructuring in order to comply with   applicable Law, such Consenting Creditor shall provide, to the extent   possible without violating applicable Law, at least five (5) Business Days’   advance notice to the Company Parties, Ascent and the other Consenting   Creditors; (j) prevent any Consenting Creditor by reason of this Agreement or   the Restructuring   frommaking,seeking,orreceivinganyregulatoryfilings,notifications,consents,   determinations, authorizations, permits, approvals, licenses, or the like, so   long as such action is not inconsistent with the terms of this Agreement; (k)   constitute a waiver or amendment of any term or provision of the Notes   Indenture or the Credit Agreement, or any other agreement, instrument or   document that gives rise to a Company Claim held by a Consenting Creditor,   the First Lien Agent, or Indenture Trustee; (l) be construed to require any   Consenting Creditor, the First Lien Agent, or Indenture Trustee, 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 Creditor or Indenture Trustee, other than those set forth in this   Agreement; (m) prohibit any Consenting Creditor from taking any action that   is not inconsistent with this Agreement or the Restructuring; or (n) obligate   any Consenting Creditor to take any action or refrain from taking any action   in its capacity as a beneficial owner (or the nominee, investment manager,   advisor or subadvisor for a beneficial owner) of Ascent Equity Interests, or   otherwise impair or waive the rights of any Consenting Creditor in its   capacity as a beneficial owner (or the nominee, investment manager, advisor   or subadvisor for a beneficial owner) of Ascent Equity Interests. Section   6.Additional Commitments of the Parties. 6.01.DIP Commitments. During the   Agreement Effective Period, in addition to the commitments set forth in   Sections 4, 5, 7 and 8 of this Agreement, in the event that the Company   Parties and DIP Lenders enter into the DIP Facility contemplated by the   DIP/Exit Facility Commitment, each Party agrees (severally and not jointly)   that it (i) consents to the liens, security interests, claims, and documents   created in connection with the DIP Facility, subject to the consent rights   set forth in Section 3.02 of this Agreement and the provision of acceptable   adequate protection to the First Lien Term Lenders on terms consistent with   the Restructuring Term Sheet, and (ii) shall not directly or indirectly   object to, delay, impede, or take any other action to interfere with the   consummation of the DIP Facility or the entry of the DIP Orders. In addition,   in the event that the Company Parties and DIP Lenders enter into the DIP   Facility 21 

    

 

EXECUTION   VERSION contemplated by the DIP/Exit Facility Commitment, each Consenting   Term Lender further agrees (severally and not jointly) that obligations under   the DIP Facility shall constitute “Priority Payment Lien Obligations” under   the Intercreditor Agreement (as defined in the Credit Agreement).   6.02.Commitment to Consummate Non-Ascent Restructuring. During the Agreement   Effective Period, in addition to the commitments set forth in Sections 4, 5,   7 and 8 of this Agreement, each Party agrees (severally and not jointly) that   it will (i) negotiate and work together in good faith with the other Parties   to make appropriate modifications to the Definitive Documents in accordance   with Section 3.02, to the extent necessary, to effectuate the Non-Ascent   Restructuring and (ii) support the Non-Ascent Restructuring in all respects,   in each case after the occurrence of any of the following events (any such   event, the “Non-Ascent Restructuring Toggle”), in each case in the   determination of the Company Parties, the Required Consenting Noteholders and   the Required Consenting Term Lenders: (a) Ascent fails, for any reason to   obtain all requisite approvals to consummate the Merger (including, for the   avoidance of doubt, all third-party and regulatory approvals required to   consummate the Merger, including approvals from the SEC and stockholder   approvals) (collectively, the “Merger Approvals”) on or prior to the Merger   Approval Outside Date; (b)the Ascent Cash Amount net of all liabilities of   Ascent (including, but not limited to, funded indebtedness, professionals’   fees, settlements, severance payments, unclaimed property liabilities,   agreements or understandings with respect to the use of cash, contingent   liabilities, and operating expenses expected to be paid in connection with   the Merger or that will be assumed by Monitronics or Reorganized Monitronics,   as applicable, in connection with the Merger) (such net amount, the “Net Cash   Amount”) is, or is reasonably expected to be in the determination of the   Company Parties, the Required Consenting Noteholders and the Required   Consenting Term Lenders, a net cash amount of less than $20 million as of the   Plan Effective Date; provided, that the calculation of the Net Cash Amount as   of the Plan Effective Date shall be determined in good faith by Ascent, the   Company Parties, the Required Consenting Noteholders, and the Required   Consenting Term Lenders on the date that is ten (10) days prior to the Plan   Effective Date; (c) the Merger does not occur on the Plan Effective Date for   any reason; (d) the material breach by Ascent of any of its undertakings,   representations, warranties, or covenants set forth in this Agreement; (e) Ascent   (i)(1) communicates its intention not to support the Restructuring or (2)   files, communicates, executes a definitive written agreement with respect to,   or otherwise supports an Alternative Restructuring Proposal and (ii) such   action has, or may be reasonably expected to have, an adverse effect on the   Company Parties’ ability to consummate the Restructuring; (f) Ascent (i)   voluntarily commences any case or files any petition seeking bankruptcy,   winding up, dissolution, liquidation, administration, moratorium,   reorganization, or other relief under any federal, state or foreign   bankruptcy, insolvency, administrative 22 

    

 

EXECUTION   VERSION receivership, or similar law now or hereafter in effect, except as   contemplated by this Agreement; (ii) consents to the institution of, or fails   to contest in a timely and appropriate manner, any involuntary proceeding or   petition described in the foregoing clause (i); (iii) applies for or consents   to the appointment of a receiver, administrator, administrative receiver,   trustee, custodian, sequestrator, conservator, or similar official with   respect to Ascent or for a substantial part of Ascent’s assets; (iv) makes a   general assignment or arrangement for the benefit of creditors; or (v) takes   any corporate action for the purpose of authorizing any of the foregoing; (g)   Ascent files any motion or pleading with the Bankruptcy Court that is not   consistent in all material respects with this Agreement, the relief requested   by such motion has, or may be reasonably expected to have, a material adverse   effect on the Company Parties’ ability to consummate the Restructuring, and   such motion has not been withdrawn within two (2) Business Days of the   receipt by Ascent, of written notice from the other Parties that such motion   or pleading is inconsistent with this Agreement; (h)this Agreement has been   validly terminated with respect to Ascent, by Ascent, pursuant to Section   15.04, so long as no other Party would have an independent right to terminate   this Agreement and actually exercises such right; or (i)the meeting of Ascent   stockholders contemplated by Section 7.01(h) of this Agreement (including any   adjournments thereof) shall have been held and completed, and Ascent’s   stockholders shall not have approved and adopted the definitive merger   agreement for the Merger, pursuant to a vote that satisfies the applicable   stockholder approval requirements under the Delaware General Corporation Law   and Ascent’s certificate of incorporation as in effect on the date of such   meeting. Section 7.Commitments of Ascent. 7.01.Affirmative Commitments.   During the Agreement Effective Period, Ascent agrees to use good faith and   commercially reasonable efforts in respect of any and all of its Existing   Equity Interests and Company Claims, to the extent applicable, to: (a)   support and take all steps reasonably necessary and desirable, including   those steps reasonably requested by the Ad Hoc Noteholder Group, or the Ad   Hoc Lender Group, to consummate the Restructuring (including, for the   avoidance of doubt, the Non-Ascent Restructuring) in accordance with this   Agreement; (b) vote and exercise any powers or rights available to it (including   in any meeting or process requiring voting or approval in which it is legally   entitled to participate) in favor of any matter requiring approval to the   extent necessary to implement the Restructuring (including, for the avoidance   of doubt, the Non-Ascent Restructuring); (c) use good faith and commercially   reasonable efforts to obtain all required governmental, regulatory (including   self-regulatory), and/or third-party approvals for the Restructuring   (including, for the avoidance of doubt, the Non-Ascent Restructuring); 23 

    

 

EXECUTION   VERSION (d) negotiate in good faith to execute and implement the Definitive   Documents to which it is required to be a party or to which its approval is   required by this Agreement; (e) promptly inform the advisors to the Company   Parties, the advisors to the Ad Hoc Noteholder Group, and the advisors to the   Ad Hoc Lender Group, as to the status of obtaining any necessary or desirable   authorizations (including any consents) from any competent judicial body,   governmental authority, banking, taxation, supervisory, or regulatory body or   any stock exchange; (f) maintain its good standing under the Laws of the   state or other jurisdiction in which they are incorporated or organized; (g)   operate its business in the ordinary course, taking into account the   Restructuring (including, for the avoidance of doubt, the Non-Ascent   Restructuring); (h) (i) cause meetings of (x) Ascent’s board of directors,   and (y) Ascent stockholders to be duly called and held, in accordance with   applicable Law, NASDAQ requirements and the applicable provisions of Ascent’s   certificate of incorporation and bylaws, for the purpose of voting on   approval of the Merger as promptly as reasonably practicable after the   Agreement Effective Date, (ii) prepare and file, or cause Monitronics to   prepare and file, with the SEC a Form S-4 or a preliminary proxy statement,   as may be the case, relating to the Merger (which shall include the   recommendation of Ascent’s board of directors that stockholders approve the   Merger and all other proxy materials (except, for the avoidance of doubt,   approval of the Plan), for such stockholders meeting) as promptly as   reasonably practicable after the Agreement Effective Date, (iii) prepare and   file, or cause Monitronics to prepare and file, with the SEC any amendments   to such Form S-4 or preliminary proxy statement, as may be the case, or other   filings as may be necessary to respond to SEC staff comments on such Form S-4   or preliminary proxy statement as promptly as reasonably practicable, (iv)   use diligent efforts to have the Form S-4 declared effective by the SEC or   the proxy statement cleared by the SEC, as may be the case, (v) cause the   prospectus or definitive proxy statement and related proxy materials, as may   be the case, to be distributed to stockholders as promptly as reasonably   practicable after such effectiveness or clearance by the SEC, (vi) use   commercially reasonable efforts to obtain the required affirmative vote of   Ascent stockholders to approve the Merger, (vii) otherwise comply with all   requirements of Law applicable to such stockholders meeting and solicitation   of votes, and (viii) keep the advisors to the Company Parties, the Ad Hoc   Noteholder Group, and the Ad Hoc Lender Group fully informed with respect to   the shareholder approval process and the results thereof; (i) promptly inform   the advisors to the Company Parties, the advisors to the Ad Hoc Noteholder   Group, and the advisors to the Ad Hoc Lender Group if at any time Ascent has,   or reasonably expects to have as of the Plan Effective Date, a Net Cash   Amount of less than $20 million; (j) cause the Ascent Cash Amount to be   contributed to Monitronics under the Plan; (k) an amount after the occurrence   of the Non-Ascent Restructuring Toggle, contribute cash in equal to $3.5   million to Monitronics on or before the Plan Effective Date (such 24 

    

 

EXECUTION   VERSION amount, the “Toggle Contribution”), subject to receipt of the release   contemplated under the Restructuring Term Sheet; and (l) promptly repay,   repurchase, cause to be defeased, or satisfy and discharge, to the extent   permissible under that certain Indenture, dated as of July 17, 2013, between   Ascent and U.S. Bank National Association as trustee thereunder, and any   other applicable governing documents, any of Ascent’s outstanding 4.00%   Convertible Senior Notes due 2020, so long as not otherwise on terms   inconsistent with this Agreement. For the avoidance of doubt, (i) the   agreements and covenants set forth in Sections 7.01(a), (b), (c), (d), (e),   and (k) shall survive the occurrence of the Non-Ascent Restructuring Toggle   and (ii) the agreements and covenants set forth in Sections 7.01(f), (g),   (h), (i), (j), and (l) shall not survive the occurrence of the Non-Ascent   Restructuring Toggle. 7.02.Negative Commitments. During the Agreement   Effective Period, Ascent agrees in respect of any and all of its Existing   Equity Interests and Company Claims, to the extent applicable, that it shall   not directly or indirectly: (a) object to, delay, impede, or take any other   action to interfere with the pursuit, acceptance, implementation, or   consummation of the Restructuring (including, for the avoidance of doubt, the   Non-Ascent Restructuring), or take any other action that is inconsistent   with, or that would delay or obstruct the proposal or consummation of, the   Restructuring (including, for the avoidance of doubt, the Non-Ascent   Restructuring); (b) take any action that is inconsistent with, or is intended   to frustrate, impede, delay or obstruct the approval, implementation, and   consummation of the Restructuring (including, for the avoidance of doubt, the   Non-Ascent Restructuring); (c) file any motion, pleading, Definitive   Documents o r o t h e r d o c u me n t s with the SEC, the Bankruptcy Court   or any other court (including any modifications or amendments thereof) that,   in whole or in part, is not consistent with this Agreement and the Definitive   Documents; (d) Transfer any material asset or right of Ascent (including any   Existing Equity Interests held by Ascent) or any material asset or right used   in the business of Ascent to any Person outside the ordinary course of   business without the consent of the Required Consenting Noteholders, the   Required Consenting Term Lenders and the Company Parties, other than as   contemplated by the Restructuring; (e) take any worthless stock deduction   with respect to any Existing Equity Interests held by Ascent; (f) take any   action that would impair the value of the net operating loss carryforwards   and other similar tax attributes of Ascent or Monitronics; 25 

    

 

EXECUTION   VERSION (g) engage in any material merger, consolidation, disposition,   acquisition, investment, dividend, incurrence of indebtedness, or other   similar transaction outside of the ordinary course of business other than as   contemplated by the Restructuring; (h)seek, solicit, support, encourage, propose,   assist, consent to, vote for, enter into, participate in, pursue or   consummate any Alternative Transaction, or engage in, continue, or otherwise   participate in any negotiations regarding any Alternative Restructuring   Proposal or engage in, continue, or otherwise participate in discussions   regarding the negotiation or formulation of, or otherwise pursue, any   alternate financing or other equity proposal or offer; (i) exercise any right   or remedy with respect to any of the Existing Equity Interests or Company   Claims, to the extent applicable, other than in accordance with this   Agreement;. (j) withdraw or revoke any tender, consent and/or vote with   respect to the Restructuring (including, for the avoidance of doubt, the   Non-Ascent Restructuring) to the extent applicable, except as otherwise   expressly permitted pursuant to this Agreement; (k) liquidation, partnership,   propose, file, support, vote for, or consent to any dissolution, winding up,   reorganization,merger,consolidation,businesscombination,jointventure, sale of   assets, or restructuring for any of the Company Parties other than as   contemplated and agreed to as part of the Restructuring (including, for the   avoidance of doubt, the Non-Ascent Restructuring); (l) file any motion,   pleading, or other document with the Bankruptcy Court or any other court   (including any modifications or amendments thereof) or take any other action   that, in whole or in part, is not materially consistent with the   Restructuring (including, for the avoidance of doubt, the Non-Ascent   Restructuring), this Agreement or the Plan; (m) initiate, or have initiated   on its behalf, any litigation or proceeding of any kind with respect to this   Agreement, the Restructuring (including, for the avoidance of doubt, the   Non-Ascent Restructuring), or the Chapter 11 Cases contemplated herein   against the Company Parties or the other Parties other than to enforce this   Agreement or any Definitive Document, to effectuate the Restructuring in   accordance therewith, or as otherwise permitted under this Agreement; (n)   object to, delay, impede, or take any other action to interfere with the   Company Parties’ ownership and possession of their assets, wherever located,   or interfere with the automatic stay arising under section 362 of the   Bankruptcy Code; or (o) enter into or adopt any new Compensation Arrangements   (or amend, modify, or terminate any existing Compensation Arrangements)   without the consent of the Required Consenting Noteholders (other than as   contemplated by the Restructuring Term Sheet). For the avoidance of doubt,   (i) the agreements and covenants set forth in Sections 7.02(a), (b), (c), (d)   (solely with respect to the Transfer of any Existing Equity Interests held by   Ascent), (e), (f) (solely with respect to net operating loss carryforwards   and other similar tax attributes of Monitronics), (h), (i), (j), (k), (l),   (m), and (n) shall survive the occurrence of the Non-Ascent 26 

    

 

EXECUTION   VERSION Restructuring Toggle, and (ii) the agreements and covenants set forth   in Sections 7.02(d) (other than with respect to a Transfer of any Existing   Equity Interests held by Ascent), (f) (other than with respect to net   operating loss carryforwards and other similar tax attributes of   Monitronics), (g), and (o) shall not survive the occurrence of the Non-Ascent   Restructuring Toggle. Section 8.Commitments of the Company Parties.   8.01.Affirmative Commitments. Except as set forth in Section 9, during the   Agreement Effective Period, the Company Parties agree to: (a) support and   take all steps reasonably necessary and desirable, including those steps   reasonably requested by the Ad Hoc Noteholder Group or the Ad Hoc Lender   Group to consummate the Restructuring in accordance with this Monitronics of   its put option to cause the Backstop Backstop Commitment Shares in accordance   with the Agreement (including the exercise by Commitment Parties to purchase   the Backstop Commitments pursuant and subject to the terms and conditions set   forth in this Agreement and the Put Option Agreement), including the   applicable milestones set forth on Schedule 1 to this Agreement   (collectively, the “RSA Milestones”); (b) to the extent any legal or   structural impediment arises that would prevent, hinder, or delay the   consummation of the Restructuring contemplated herein, support and take all   steps reasonably necessary and desirable to address and resolve any such   impediment; provided, however, that any actions taken in connection with such   support or such steps shall be reasonably acceptable to the Ad Hoc Noteholder   Group and the Ad Hoc Lender Group; (c) use good faith and commercially   reasonable efforts to obtain all required governmental, regulatory (including   self-regulatory), and/or third-party approvals for the Restructuring;   (d)negotiate in good faith and use commercially reasonable efforts to execute   and deliver the Definitive Documents and any other required agreements to   effectuate and consummate the Restructuring as contemplated by this   Agreement; (e) after the occurrence of the Non-Ascent Restructuring Toggle,   negotiate in good faith and use commercially reasonable efforts to execute   and deliver amendments to the Definitive Documents and any other required   agreements to effectuate and consummate the Non-Ascent Restructuring; (f)   pay, in cash, the Default Interest Amount within five (5) days of the   Agreement Effective Date, in accordance with the Credit Agreement; (g) seek   additional support for the Restructuring from their other material   stakeholders to the extent reasonably prudent and as may be reasonably   requested by the Ad Hoc Noteholder Group, the Ad Hoc Lender Group, or Ascent   and, to the extent the Company Parties receive any Joinders or Transfer   Agreements, notify counsel to the Ad Hoc Noteholder Group, counsel to the Ad   Hoc Lender Group, and counsel to Ascent of such Joinders and Transfer   Agreements (irrespective of whether such Joinders or Transfer Agreements were   previously 27 

    

 

EXECUTION VERSION   delivered to counsel to the Ad Hoc Noteholder Group, counsel to the Ad Hoc   Lender Group, or counsel to Ascent by such joining party or transferee); (h)   actively oppose and object to, in consultation with counsel for the Ad Hoc   Noteholder Group, counsel for the Ad Hoc Lender Group, and counsel for   Ascent, the efforts of any Person seeking to object to, delay, impede, or   take any other action to interfere with the acceptance, implementation, or   consummation of the Restructuring (including, if applicable, by timely filing   objections or written responses in the Chapter 11 Cases); (i) negotiate in   obtain the requisite consents set forth in this Agreement from, and consult   and good faith with, the Consenting Creditors, Ascent, and their respective   advisors regarding the implementation and execution of the Restructuring; (j)   inform the advisors to the Ad Hoc Noteholder Group, the advisors to the Ad   Hoc Lender Group, and the advisors to Ascent as to: (i) the material business   and financial (including liquidity) performance of Monitronics and all its   subsidiaries, (ii) the status and progress of the Restructuring, including   progress in relation to the negotiations of the Definitive Documents, and   (iii) the status of obtaining any necessary or desirable authorizations   (including any consents) from each Consenting Creditor, any competent   judicial body, governmental authority, banking, taxation, supervisory, or   regulatory body or any stock exchange; (k) notify counsel for the Ad Hoc   Lender Group of any breach or default by any Commitment Party under this   Agreement, the Put Option Agreement, or any other agreement relating to the   Restructuring, including any default or breach with respect to any Commitment   Party’s obligation to fund and/or pay into escrow any part of their   respective Backstop Commitment or Equity Commitment, which notice shall be   given promptly, and in no event more than twenty-four (24) hours following   such breach or default; (l) promptly notify counsel for the Ad Hoc Noteholder   Group, counsel for the Ad Hoc Lender Group, and counsel for Ascent as soon as   reasonably practicable (but in no event later than forty-eight (48) hours   thereafter) after becoming aware of: (i) any notice of any commencement of   any material involuntary Insolvency Proceedings, legal suit for payment of   debt or securement of security from or by any Person in respect of any member   of the Consolidated Group, (ii) a breach of this Agreement (including a   breach by any Company Party), and (iii) any representation or statement made   or deemed to be made by them under this Agreement which is or proves to have   been materially incorrect or misleading in any respect when made or deemed to   be made; (m) maintain their good standing under the Laws of the state or   other jurisdiction in which they are incorporated or organized; (n) operate   their business in the ordinary course and use their commercially reasonable   efforts to preserve intact their current material business organizations, and   preserve their material relationships with customers, suppliers, licensors,   licensees, distributors and others having business dealings with the Company   Parties, taking into account the Restructuring; 28 

    

 

EXECUTION   VERSION (o) provide counsel for the Ad Hoc Noteholder Group, counsel for the   Ad Hoc Lender Group, and counsel for Ascent a reasonable opportunity (which   shall be no less than three (3) Business Days, except in the case of the   Plan, Disclosure Statement, Disclosure Statement Order, Confirmation Order,   DIP Orders, Rights Offering Approval Order, or Backstop Approval Order, which   shall be no less than five (5) Business Days) to review draft copies of all   Solicitation Materials, First Day Pleadings, second day motions and proposed   orders relating thereto, and all other motions, pleadings and documents that   the Company Parties intend to file with the Bankruptcy Court, and, without   limiting any consent rights set forth in this Agreement, consult in good   faith with respective counsel to such Parties regarding the form and   substance of any such proposed filing; provided, however, that each such   pleading or document shall be consistent in all respects with the terms and   conditions set forth in this Agreement; (p) timely file a formal objection   (in consultation with the Ad Hoc Noteholder Group and the Ad Hoc Lender   Group) to any motion filed with the Bankruptcy Court by a third party seeking   the entry of an order (i) directing the appointment of a trustee or examiner   (with expanded powers beyond those set forth in sections 1106(a)(3) and (4)   of the Bankruptcy Code), (ii) converting the Chapter 11 Cases to cases under   chapter 7 of the Bankruptcy Code, (iii) dismissing the Chapter 11 Cases; (iv)   seeking the entry of an order modifying or terminating the Company Parties’   exclusive right to file and/or solicit acceptances of a plan of   reorganization; (v) sustaining a challenge to the validity, enforceability,   perfection or priority of, or seeking avoidance or subordination of, any   portion of the Credit Agreement Claims or Notes Claims (as applicable), or   asserting any other cause of action against or with respect or relating to   such Claims or any pre-petition liens securing such Claims (as applicable);   (q)provide, and direct its employees, officers, advisors, and other   representatives to provide, to the Consenting Noteholders, the Consenting   Term Lenders, Ascent, and their respective advisors (i) reasonable access to   the Company Parties’ books and records during normal business hours on   reasonable advance notice to the Company Parties’ representatives and without   disruption to the operation of the Company Parties’ business, (ii) reasonable   access to the management and advisors of the Company Parties on reasonable   advance notice to such Persons and without disruption to the operation of the   Company’s business and (iii) such other information or access as reasonably   requested by the Ad Hoc Noteholder Group, the Ad Hoc Lender Group, Ascent, or   their respective legal and financial advisors or as set forth in the   Information Sharing Agreement; (r) commence solicitation of votes to accept   or reject the Plan by no later than the Prepetition Solicitation Commencement   Date and commence the Chapter 11 Cases no later than the Petition Date   Milestone; (s) file, on the Petition Date, a motion seeking approval of the   DIP Facility and the use of cash collateral; (t) file, on the Petition Date,   one or more motions seeking (A) conditional approval of the Disclosure   Statement and the other Solicitation Materials on an interim basis, (B)   approval of the Rights Offering Procedures, (C) approval of the Backstop   Commitment Documents, and 29 

    

 

EXECUTION   VERSION (D) approval of the Disclosure Statement and the other Solicitation   Materials on a final basis and confirmation of the Plan; (u) file, on the   Petition Date, the First Day Pleadings and to seek interim (to the extent   necessary) and final orders from the Bankruptcy Court approving such relief;   (v)subject to the terms of the DIP Orders, the Backstop Approval Order, and   authorization by the Bankruptcy Court, timely pay the reasonable and   documented fees and expenses of the advisors to the Ad Hoc Noteholder Group,   and the Ad Hoc Lender Group, arising prior to and after the Petition Date;   provided that, for the avoidance of doubt, all of such fees and expenses shall   be paid consistent with the Creditor Professional Agreements; and (w) provide   prompt notice of any proposed amendment, modification, or waiver to any   Definitive Document to all Parties (except to Ascent upon occurrence of the   Non-Ascent Restructuring Toggle). 8.02.Negative Commitments. Except as set   forth in Section 9, during the Agreement Effective Period, each of the   Company Parties shall not directly or indirectly: (a) object to, delay,   impede, or take any other action to interfere with the acceptance,   implementation, or consummation of the Restructuring; (b) take any action   that is inconsistent with, or is intended to frustrate, impede, delay or   obstruct the approval, implementation, and consummation of the Restructuring;   (c)modify the Plan, in whole or in part, in a manner that is not consistent   with this Agreement and the Definitive Documents, including, without   limitation, the Backstop Commitment Documents, the Takeback Exit Term Loan   Facility Documents, and the DIP/Exit Facility Documents; (d) file any motion,   pleading, or other Definitive Document with the Bankruptcy Court or any other   court (including any modifications or amendments thereof) that, in whole or   in part, is not consistent with this Agreement and the Definitive Documents;   (e) seek, solicit, or support any Alternative Restructuring Proposal, other   than as expressly permitted under Section 9.01 hereof; (f)Transfer any   material asset or right of the Company Parties or any asset or right used in   the business of the Company Parties to any Person outside the ordinary course   of business without the consent of the Required Consenting Noteholders, the   Required Consenting Term Lenders, and Ascent; (g) engage in any material   merger, consolidation, disposition, acquisition, investment, dividend, incurrence   of indebtedness, or other similar transaction outside of the ordinary course   of business other than the Restructuring; 30 

    

 

EXECUTION   VERSION (h) seek, solicit, support, encourage, propose, assist, consent to,   vote for, enter into, participate in, pursue or consummate any Alternative   Transaction or any substantive discussions regarding an Alternative   Transaction (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   provisions set forth in Section 9 of this Agreement; or (i) enter into or   adopt any new Compensation Arrangements (or amend, modify, or terminate any   existing Compensation Arrangements) without the consent of the Required   Consenting Noteholders. Section 9.Additional Provisions Regarding Company   Parties’ Commitments 9.01.Fiduciary Duties. Notwithstanding anything in this   Agreement to the contrary, nothing in this Agreement, the Restructuring Term   Sheet or any other Definitive Document shall require any of the Company   Parties, their directors, managers, and officers, or the independent   directors, after consulting with counsel, to take or refrain from taking any   action that any such Person or Persons determines in good faith would be   inconsistent with its fiduciary duties under applicable Law, including,   without limitation, negotiation and consummation of a Superior Proposal.   Notwithstanding the foregoing, the Company Parties acknowledge that their   entry into this Agreement is consistent with their fiduciary duties.   9.02.Notice Regarding Alternative Restructuring Proposals. If any of the   Company Parties receives an Alternative Restructuring Proposal or any request   for information that could reasonably be expected to be used for the purpose   of formulating any inquiry, offer, unsolicited proposal, or expression of   interest, within forty-eight (48) hours of the receipt of such Alternative   Restructuring Proposal or such request for information, the Company Parties   shall notify the Consenting Creditors and Ascent in writing (electronic mail   to the advisors for the Consenting Creditors and Ascent being sufficient) of   the receipt thereof, with such notice to include: (i) a written description   of the material terms and conditions thereof, including in such description   (to the extent permissible) the identity of the Person from which such   expression of interest, inquiry, proposal, offer, or request for information   was received (the “Other Interested Party”) and (ii) to the extent   permissible, a copy of each written communication (x) transmitted on behalf   of the Other Interested Party or any of its representatives to the Company   Parties or any of its representatives or (y) transmitted on behalf of the   Company Parties or any of its representatives to the Other Interested Party   or any of its representatives. Notwithstanding the receipt of any Alternative   Restructuring Proposal or request for information, each of the Company   Parties acknowledges and agrees that it is, and will continue to be, bound by   its obligations set forth in this Agreement, subject to its duties under   applicable law and/or its governing documents as well as its rights under   Section 9.01 of this Agreement. Section 10.Transfer of Interests and   Securities. 10.01. No Transfer of Existing Equity Interests. During the   Agreement Effective Period, Ascent shall not Transfer any ownership   (including any beneficial ownership as defined in Rule 13d-3 under the   Exchange Act) in any Existing Equity Interests to any affiliated or 31 

    

 

EXECUTION   VERSION unaffiliated Person, including any Person in which it may hold a   direct or indirect beneficial interest. 10.02. Transfer of Claims. During the   Agreement Effective Period, no Consenting Creditor shall Transfer any   ownership (including any beneficial ownership as defined in Rule 13d-3 under   the Exchange Act) in any Company Claims to any affiliated or unaffiliated   Person, including any Person in which it may hold a direct or indirect   beneficial interest, unless: (a) either: (i) (1) with respect to any transfer   by a Consenting Noteholder, the transferee executes and delivers a Transfer   Agreement to counsel to the Company Parties, counsel to Ascent, counsel to   the Ad Hoc Noteholder Group, counsel to the Ad Hoc Lender Group, and the   Indenture Trustee, and (2) with respect to any transfer by a Consenting Term   Lender, the transferee executes and delivers a Transfer Agreement to counsel   to the Company Parties, counsel to Ascent, counsel to the Ad Hoc Lender   Group, and counsel to the Ad Hoc Noteholder Group, in each case at or before   the time of the proposed Transfer, or (ii) the transferee is a Consenting   Creditor and the transferee provides notice of such Transfer (including the   amount and type of Company Claim Transferred) to counsel to the Company   Parties at or before the time of the proposed Transfer; and (b) any such   proposed Transfer (as defined herein) of the Notes by a Consenting Noteholder   shall be permitted only so long as such Transfer complies in all respects   with the procedures and terms set forth in the Notes Indenture; and (c) any   such proposed Transfer (as defined herein) of Company Claims held by a   Consenting Term Lender on account of its Term Loans shall be permitted only   so long as such Transfer complies in all respects with the procedures and   terms set forth in the Credit Agreement. Notwithstanding anything to the   contrary in this Section 10.02, a Consenting Noteholder may permit its prime   broker to hold the Notes as part of a custodian agreement whereby such   Consenting Noteholder retains all of its voting rights with respect to such   Notes during the Agreement Effective Period until the occurrence of the   Termination Date. With respect to the Transfer of any Company Claims by a   Consenting Creditor, upon consummation of a Transfer in accordance herewith,   such transferee is deemed to make all of the representations, warranties, and   covenants of a Consenting Creditor, as applicable, set forth in this   Agreement and (if not already a Consenting Creditor) is deemed to be, and   shall be, a Consenting Creditor for all purposes of this Agreement. 10.03.   Qualified Market-Maker. Notwithstanding anything herein to the contrary, (i)   any Consenting Creditor may Transfer any of its Company Claims to an entity   that is acting in its capacity as a Qualified Market-Maker without the   requirement that the Qualified Market-Maker be or become a Consenting   Creditor; provided, however, that the Qualified Market-Maker subsequently   Transfers all right, title and interest in such Company Claims to a   transferee that is or becomes a Consenting Creditor as provided above, and   the Transfer documentation between the transferor Consenting Creditor and   such Qualified Market-Maker shall contain a requirement that provides as   such; and (ii) to the extent any Consenting Creditor is acting in its   capacity as a 32 

    

 

EXECUTION   VERSION Qualified Market-Maker, it may Transfer any Company Claims that it   acquires from a holder of such Company Claims that is not a Consenting   Creditor without the requirement that the transferee be or become a   Consenting Creditor. Notwithstanding the foregoing, if, at the time of the   proposed Transfer of any Company Claims to a Qualified Market-Maker, such   Company Claims (x) may be voted on the Plan, the proposed transferor   Consenting Creditor must first vote such Company Claims in accordance with   the requirements of Section 4.02(a) hereof, or (y) have not yet been and may   not yet be voted on the Plan and such Qualified Market-Maker does not   Transfer such Company Claims to a subsequent transferee prior to the fifth   (5th) Business Day prior to the expiration of the voting deadline (such date,   the “Qualified Market-Maker Joinder Date”), such Qualified Market-Maker shall   be required to (and the Transfer documentation to the Qualified Market-Maker   shall have provided that it shall), on the first (1st) Business Day   immediately following the Qualified Market-Maker Joinder Date, become a Consenting   Creditor with respect to such Company Claims in accordance with the terms   hereof (provided, that the Qualified Market-Maker shall automatically, and   without further notice or action, no longer be a Consenting Creditor with   respect to such Company Claims at such time that the transferee of such   Company Claims becomes a Consenting Creditor with respect to such Company   Claims). 10.04. Release of Transferor. Upon compliance with the requirements   of Section 10.02, the transferor shall be deemed to relinquish its rights   (and be released from its obligations, except for any claim for breach of   this Agreement that occurs prior to such Transfer) under this Agreement to   the extent of the rights and obligations in respect of such transferred   Company Claims. Any Transfer in violation of Section 10.02 shall be void ab   initio. 10.05. Acquisition of Additional Claims.Subject to this Section 10,   this Agreement shall in no way be construed to preclude the Consenting   Creditors from acquiring additional Company Claims; provided, however, that   (i) such additional Company Claims shall automatically and immediately upon   acquisition by a Consenting Creditor be deemed subject to the terms of this   Agreement (regardless of when or whether notice of such acquisition is given   to counsel to Ascent, counsel to the Company Parties, counsel to Ad Hoc   Noteholder Group, or counsel to the Ad Hoc Lender Group) and (ii) such   Consenting Creditors must provide notice of such acquisition (including the   amount and type of Company Claims acquired) to counsel to Ascent, counsel to   the Company Parties, counsel to the Ad Hoc Noteholder Group, and counsel to   the Ad Hoc Lender Group within three (3) Business Days of such acquisition.   10.06. No Obligations of Company Parties. This Section 10 shall not impose   any obligation on any Company Party to issue any “cleansing letter” or   otherwise publicly disclose information for the purpose of enabling a   Consenting Creditor to Transfer any of its Company Claims. Notwithstanding   anything to the contrary herein, to the extent a Company Party and another   Party have entered into a Confidentiality Agreement, the terms of such   Confidentiality Agreement shall continue to apply and remain in full force   and effect according to its terms, and this Agreement does not supersede any   rights or obligations (including any obligation by any Company Party to issue   “cleansing materials” or otherwise make a public disclosure of information)   otherwise arising under such Confidentiality Agreements. 10.07. Additional   Provisions Regarding Transfers. Notwithstanding anything to the contrary in   this Section 10, the restrictions on Transfers set forth in this Section 10   shall not 33 

    

 

EXECUTION   VERSION apply to the grant of any liens or encumbrances on any claims and   interests in favor of a bank or broker-dealer holding custody of such claims   and interests in the ordinary course of business and which lien or   encumbrance is released upon the Transfer of such claims and interests.   Section 11. Representations and Warranties of Consenting Creditors. Each   Consenting Creditor severally, and not jointly, represents and warrants that,   as of the date such Consenting Creditor executes and delivers this Agreement:   (a) it is the beneficial or record owner of the face amount of the Company   Claims, or is the nominee, investment manager, advisor or subadvisor for the   beneficial holders of the Company Claims reflected in, and it is not the   beneficial or record owner of any Company Claims other than those reflected   in, such Consenting Creditor’s signature page to this Agreement, a Joinder or   a Transfer Agreement, as applicable (as may be updated pursuant to Section   10); (b) it has the full power and authority to act on behalf of, vote, and   consent to matters concerning, such Company Claims (as may be updated   pursuant to Section 10); (c) such Company Claims (as may be updated pursuant   to Section 10) are free and clear of any pledge, lien, security interest,   charge, claim, equity, option, proxy, voting restriction, right of first   refusal, or other limitation on disposition, transfer, or encumbrances of any   kind, that would adversely affect in any way such Consenting Creditor’s   ability to perform any of its obligations under this Agreement at the time   such obligations are required to be performed; (d)it has the full power to   vote, approve changes to, and Transfer all of its Company Claims (as may be   updated pursuant to Section 10) referable to it as contemplated by this   Agreement subject to applicable Law; and (e)solely with respect to holders of   Company Claims (as may be updated pursuant to Section 10), (i) it is either   (a) a qualified institutional buyer as defined in Rule 144A of the Securities   Act, (b) not a U.S. person (as defined in Regulation S of the Securities   Act), or (c) an accredited investor (as defined in the Rules). Section 12.   Representations and Warranties of Ascent. Ascent represents and warrants   that, as of the date it executes and delivers this Agreement: (a) it is the   beneficial or record owner of the Existing Equity Interests reflected in, and   it is not the beneficial or record owner of any Existing Equity Interests   other than those reflected in, its signature page to this Agreement; (b) it   has the full power and authority to act on behalf of, vote, and consent to   matters concerning, such Existing Equity Interests; (c) such Existing Equity   Interests are free and clear of any pledge, lien, security interest, charge,   claim, equity, option, proxy, voting restriction, right of first refusal, or   other limitation on disposition, transfer, or encumbrances of any kind, that   would adversely affect in 34 

    

 

EXECUTION   VERSION any way Ascent’s ability to perform any of its obligations under this   Agreement at the time such obligations are required to be performed; (d) it   has the full power to vote, approve changes to, and Transfer all of its   Existing Equity Interests pursuant to this Agreement and subject to   applicable Law; (e) there are no actions, suits, proceedings, claims or   disputes pending or, to the knowledge of Ascent after reasonable inquiry,   threatened or contemplated, at Law, in equity, in arbitration or before any   Governmental Entity or regulatory division, by or against Ascent or any of   its subsidiaries or against any of their properties or revenues that (a) purport   to affect or pertain to this Agreement, any other Definitive Document, or the   consummation of the Restructuring, or (b) either individually or in the   aggregate, would reasonably be expected to: (i) have a material adverse   effect upon, or result in a material adverse change in, the operations,   business, properties, liabilities (actual or contingent), or financial   condition of the Company Parties or Reorganized Monitronics and its   subsidiaries taken as a whole; (ii) cause a material impairment of the rights   and remedies of the administrative agent or any lender under the DIP   Facility, the New Exit Facilities, or the Takeback Exit Term Loan Facility,   or of the ability of any Company Party or Reorganized Monitronics to perform   its obligations under the DIP Facility, the New Exit Facilities, or the   Takeback Exit Term Loan Facility; or (iii) have a material adverse effect   upon the legality, validity, binding effect or enforceability of this   Agreement or any Definitive Document; and (f) to its knowledge, neither itself   nor Monitronics nor any subsidiary of Monitronics has undergone an “ownership   change,” as defined in section 382(g) of the Internal Revenue Code of 1986   (as amended), since January 1, 2016. Section 13. Representations and   Warranties of Company Parties.Each Company Party (severally and not jointly)   represents and warrants that as of the date such Company Party executes and   delivers this Agreement: (a) to the best of its knowledge having made all   reasonable inquiries, no order has been made, petition presented, or   resolution passed for the winding up of or appointment of a liquidator,   receiver, administrative receiver, administrator, compulsory manager or other   similar officer in respect of it or any other Company Party or other member   of the Consolidated Group, and no analogous procedure has been commenced in   any jurisdiction; (b)except as expressly provided by this Agreement, it is   not party to any restructuring or similar agreements or arrangements with any   other Person with respect to Company Claims or Existing Equity Interests that   have not been disclosed to all Parties to this Agreement; (c) it is not party   to any asset sale or investment agreements with any other Person with respect   to Company Claims or Existing Equity Interests that have not been disclosed   to all Parties to this Agreement; 35 

    

 

EXECUTION   VERSION (d) the issuance of the Rights and the issuance of the Rights   Offering Shares upon the exercise thereof shall qualify for exemption, and   shall be exempt, from registration under the Securities Act; (e) to the   knowledge of any Company Party, neither it nor any of its subsidiaries has   undergone an “ownership change,” as defined in section 382(g) of the Internal   Revenue Code of 1986 (as amended), since January 1, 2016; (f) all existing   Compensation Arrangements of the members of the Consolidated Group have been   disclosed to counsel to the Ad Hoc Noteholder Group; (g) there are no   actions, suits, proceedings, claims or disputes pending or, to the knowledge   of any Company Party after reasonable inquiry, threatened or contemplated, at   Law, in equity, in arbitration or before any Governmental Entity or   regulatory division, by or against Ascent or any of its subsidiaries or   against any of their properties or revenues that (a) purport to affect or   pertain to this Agreement, any other Definitive Document, or the consummation   of the Restructuring, or (b) either individually or in the aggregate, would   reasonably be expected to: (i) have a material adverse effect upon, or result   in a material adverse change in, the operations, business, properties, liabilities   (actual or contingent), or financial condition of the Company Parties or   Reorganized Monitronics and its subsidiaries taken as a whole; (ii) cause a   material impairment of the rights and remedies of the administrative agent or   any lender under the DIP Facility, the New Exit Facilities, or the Takeback   Exit Term Loan Facility, or of the ability of any Company Party or   Reorganized Monitronics to perform its obligations under the DIP Facility,   the New Exit Facilities, or the Takeback Exit Term Loan Facility; or (iii)   have a material adverse effect upon the legality, validity, binding effect or   enforceability of this Agreement or any Definitive Document; and (h) the   DIP/Exit Facility Commitment, including the Fee Letter (as defined in the   DIP/Exit Facility Commitment), has been entered into and is in full force and   effect, and no amendment or modification of the DIP/Exit Facility Commitment   or Fee Letter is contemplated, and none of the commitments in the DIP/Exit   Facility Commitment or Fee Letter have been withdrawn or rescinded in any   respect. With the exception of the Fee Letter, to the knowledge of the   Company Parties after reasonable inquiry, there are no side letters or other   agreements, contracts, arrangements or understandings to which the Company Parties   are party related to the DIP Facility or New Exit Facilities or the funding   or investing, as applicable, of the full amount of the DIP Facility or New   Exit Facilities, other than as expressly set forth in the Fee Letter in the   form delivered to the Consenting Creditors prior to the date hereof. To the   knowledge of the Company Parties after reasonable inquiry, no event has   occurred which, with or without notice, lapse of time or both would or would   reasonably be expected to constitute a default or breach on the part of any   Company Party or other party to the DIP/Exit Facility Documents. To the   knowledge of the Company Parties after reasonable inquiry, there are no   conditions precedent or other contingencies (A) related to the funding of the   DIP Facility or New Exit Facilities or any provisions that could reduce the   aggregate proceeds contemplated by the DIP/Exit Facility Commitment or (B)   that could otherwise adversely affect the conditionality, enforceability or   availability of the DIP/Exit Facility Commitment with respect to all or any   portion of the DIP Facility or the New Exit Facilities, in each case other   than as expressly set forth in the DIP/Exit 36 

    

 

EXECUTION   VERSION Facility Commitment. The Company Parties shall use its reasonable   best efforts to maintain the DIP/Exit Facility Commitment in effect and   satisfy its obligations thereunder. Section 14. Mutual Representations,   Warranties, and Covenants; Further Assurances. Each Party (severally and not   jointly) represents, warrants, and covenants to each other Party, as of the   date such Party executed and delivered this Agreement that: (a) it is validly   existing and in good standing (or the equivalent thereof) under the Laws of   the jurisdiction of its organization, and this Agreement is a legal, valid,   and binding obligation of such Party, enforceable against it in accordance   with its terms, except as enforcement may be limited by applicable Laws   relating to or limiting creditors’ rights generally or by equitable   principles relating to enforceability; (b) except as expressly provided in   this Agreement, the Plan, and the Bankruptcy Code, no consent or approval is   required by a governmental authority, banking, taxation, supervisory, or   regulatory body or any stock exchange, third party or any other Person in   order for it to effectuate the Restructuring contemplated by, and perform its   respective obligations under, this Agreement other than any such consent or   approval which has been obtained, provided, or otherwise satisfied prior to the   Agreement Effective Date and which consent or approval has not been   subsequently revoked; (c)the entry into and performance by it of, and the   transactions contemplated by, this Agreement do not, and will not, conflict   in any material respect with any Law or regulation applicable to it or with   any of its articles of association, memorandum of association, certificates   of incorporation, bylaws, or other constitutional documents; and (d) except   as expressly provided in this Agreement, it has (or will have, at the   relevant time) all requisite corporate or other power and authority to enter   into, execute, and deliver this Agreement and to effectuate the Restructuring   contemplated by, and perform its respective obligations under, this   Agreement, on behalf of itself and its Affiliates, as applicable. Section   15.Termination Events. 15.01. Noteholder Termination Events. This Agreement   may be terminated by the Required Consenting Noteholders, and such   termination shall be effective immediately upon the delivery to the Company   Parties, counsel to the Ad Hoc Lender Group, and Ascent of a written notice   in accordance with Section 17.10, at any time after the occurrence, and   during the continuation, of any of the following events, in each case, other   than as contemplated by the Restructuring: (a) the (i) material breach in any   respect by any Company Party or any Consenting Term Lender of any of the   respective undertakings, representations, warranties, or covenants of the   Company Parties or the Consenting Term Lenders, as applicable, set forth in   this Agreement (it being understood and agreed that any actions and   obligations required to be taken by any such Party that are included in the   exhibits attached to this Agreement but not in this Agreement are to be   considered “covenants” of such Party, and therefore covenants of this   Agreement, notwithstanding the failure of any specific provision in any of   the exhibits to be re-copied into 37 

    

 

EXECUTION   VERSION this Agreement) or (ii) failure of any Company Party or any   Consenting Term Lender to act in a manner materially consistent with this   Agreement (other than an immaterial failure), which breach or failure remains   uncured (to the extent curable) before the earlier of (x) five (5) Business   Days after the applicable Required Consenting Noteholders transmit a written   notice to the Company Parties and the Consenting Term Lenders in accordance   with Section 17.10 and (y) one calendar day before the Plan Effective Date   contemplated herein; provided that the Required Consenting Noteholders may   not terminate this Agreement pursuant to this Section 15.01(a) upon the   breach or failure of any Consenting Term Lender, if at the time or during the   continuation of such breach or failure, the remaining Consenting Term Lenders   hold or control in excess of 662/3% of the dollar amount, and in excess of   50% in number of the holders of, the Term Loans under the Credit Agreement;   (b) the failure of any Definitive Document to comply with the requirements of   Section 3.02 of this Agreement, which non-compliance remains uncured for a   period of five (5) Business Days after the applicable Required Consenting   Noteholders transmit a written notice to the Company Parties of such breach;   (c) the making public (or filing, if under the Chapter 11 Cases) of any of   the Definitive Documents (including any amendment or modification thereof)   that contains terms and conditions that are not consistent with this   Agreement or otherwise reasonably acceptable to the Required Consenting   Noteholders in accordance with this Agreement, and such public disclosure (or   filing, if under the Chapter 11 Cases) is not withdrawn or such inconsistency   is not amended or modified in a manner consistent with this Agreement or   otherwise reasonably acceptable to the Required Consenting Noteholders in   accordance with this Agreement within five (5) Business Days after the   receipt by the Company Parties of notice of such breach; (d)any Company Party   or any Consenting Term Lender (i)(1) communicates its intention not to support   the Restructuring or (2) files, communicates, executes a definitive written   agreement with respect to, or otherwise supports an Alternative Restructuring   Proposal and (ii) such action has, or may be reasonably expected to have, an   adverse effect on the Company Parties’ ability to consummate the   Restructuring; provided that the Required Consenting Noteholders may not   terminate this Agreement pursuant to this Section 15.01(d) upon such filing,   communication or execution by any Consenting Term Lender if, at the time of   such filing, communication or execution, the remaining Consenting Term   Lenders hold or control in excess of 662/3% of the dollar amount , and in   excess of 50% in number of the holders of, the Term Loans under the Credit   Agreement; (e) the issuance by any governmental authority, including any   regulatory authority or court of competent jurisdiction, of any final,   non-appealable ruling or order that (i) enjoins the consummation of a   material portion of the Restructuring, including the Plan and (ii) either (1)   such ruling, judgment, or order has been issued at the request of or with the   acquiescence of any Company Party or (2) remains in effect as of the earlier   of (A) fifteen (15) Business Days after such terminating Required Consenting   Noteholders transmit a written notice in accordance with Section 17.10   detailing any such issuance and (B) one (1) calendar day immediately prior to   the Plan Effective Date contemplated herein; provided that this termination   right may not be 38 

    

 

EXECUTION   VERSION exercised by any Party that sought or requested such ruling or order   in contravention of any obligation set out in this Agreement; (f) the entry   of an order by the Bankruptcy Court, or the filing of a motion or application   by any Company Party seeking an order (without the prior written consent of   the applicable Required Consenting Noteholders), (i) converting one or more   of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code;   (ii) appointing an examiner with expanded powers beyond those set forth in   sections 1106(a)(3) and (4) of the Bankruptcy Code in one or more of the   Chapter 11 Cases; (iii) appointing a trustee under section 1104 of the   Bankruptcy Code in one or more of the Chapter 11 Cases; (iv) dismissing one   or more of the Chapter 11 Cases, (v) terminating exclusivity under Bankruptcy   Code section 1121, or (vi) rejecting this Agreement; (g) if any Company Party   (i) voluntarily commences any case or files any petition seeking bankruptcy,   winding up, dissolution, liquidation, administration, moratorium,   reorganization, or other relief under any federal, state or foreign   bankruptcy, insolvency, administrative receivership, or similar law now or   hereafter in effect, except as contemplated by this Agreement; (ii) consents   to the institution of, or fails to contest in a timely and appropriate   manner, any involuntary proceeding or petition described in the preceding   subsection (i); (iii) applies for or consents to the appointment of a   receiver, administrator, administrative receiver, trustee, custodian,   sequestrator, conservator, or similar official with respect to any Company   Party or for a substantial part of such Company Party’s assets; (iv) makes a   general assignment or arrangement for the benefit of creditors; or (v) takes   any corporate action for the purpose of authorizing any of the foregoing; (h)   an order is entered by the Bankruptcy Court granting relief from the   automatic stay imposed by section 362 of the Bankruptcy Code authorizing any   Person to proceed against any asset of any Company Party that would   materially and adversely affect the Company Party’s operational or financial   performance; (i) any Company Party or any Consenting Term Lender files any   motion or pleading with the Bankruptcy Court that is not consistent in all   material respects with this Agreement, the relief requested by such motion   has, or may be reasonably expected to have, a material adverse effect on the   Company Parties’ ability to consummate the Restructuring, and such motion has   not been withdrawn within two (2) Business Days of the receipt by the Company   Parties or the Consenting Term Lenders, as applicable, of written notice from   the Required Consenting Noteholders that such motion or pleading is   inconsistent with this Agreement; provided that the Required Consenting   Noteholders may not terminate this Agreement pursuant to this Section   15.01(i) upon such filing by any Consenting Term Lender if, at the time of   such filing, the remaining Consenting Term Lenders hold or control in excess   of 662/3% of the dollar amount, and in excess of 50% in number of holders of,   the Term Loans under the Credit Agreement; (j) the Bankruptcy Court enters an   order in the Chapter 11 Cases, or any Company Party moves or consents to,   terminating any Company Party’s exclusive right to file a plan or plans of   reorganization under section 1121 of the Bankruptcy Code; 39 

    

 

EXECUTION   VERSION (k) the termination of or the exercise of any remedies under the DIP   Facility or any agreement regarding any Company Party’s use of cash   collateral; (l) the termination or material breach of the Put Option   Agreement; provided that this termination right may not be exercised by any   Noteholder if such Noteholder failed to perform or comply in any material   respect with the terms and conditions of this Agreement or the Put Option   Agreement, and such failure to perform or comply caused, or resulted in, the   occurrence of the termination or material breach of the Put Option Agreement;   (m) the Bankruptcy Court grants relief that is inconsistent in any respect   with, or enters an order rejecting, this Agreement and such inconsistent   relief is not dismissed, vacated, or modified to be consistent with this   Agreement before the earlier of (x) five (5) Business Days after the   applicable Required Consenting Noteholders transmit a written notice to the   Company Parties that such relief is inconsistent with the agreement and (y)   one calendar day before the Plan Effective Date contemplated herein; (n)   Ascent takes any action that has, or is reasonably expected to have, a   material adverse effect on the Company Parties’ ability to consummate the   Non-Ascent Restructuring; or (o)the Company Parties shall not have complied   with any of the RSA Milestones (unless such RSA Milestone is waived or   amended in accordance with Section 16 of this Agreement). Notwithstanding   anything to the contrary in this Section 15.01, the Required Consenting   Noteholders may not terminate this Agreement: (a) due solely to the   occurrence of the Non-Ascent Restructuring Toggle, (b) due solely to a ruling   by the Bankruptcy Court requiring a modification to the Solicitation   Materials solely with respect to the Cash Payout, in which event the Parties   will work together in good faith to address the Bankruptcy Court’s concerns   in a manner consistent with all other material terms of the Restructuring, or   (c) pursuant to Section 15.01(b) or (c) solely if the Definitive Document   that gives rise to such termination right is the Information Sharing   Agreement and/or the TSA. 15.02. First Lien Term Lender Termination Events.   This Agreement may be terminated by the Required Consenting Term Lenders, and   such termination shall be effective immediately upon the delivery to the   Company Parties, the Consenting Noteholders, and Ascent of a written notice   in accordance with Section 17.10, at any time after the occurrence, and   during the continuation, of any of the following events, in each case, other   than as contemplated by the Restructuring: (a) the (i) material breach in any   respect by any Company Party or any Consenting Noteholder of any of the   respective undertakings, representations, warranties, or covenants of the   Company Parties or the Consenting Noteholders, as applicable, set forth in   this Agreement (it being understood and agreed that any actions and   obligations required to be taken by any such Party that are included in the   exhibits attached to this Agreement but not in this Agreement are to be   considered “covenants” of such Party, and therefore covenants of this   Agreement, notwithstanding the failure of any specific provision in any of   the exhibits to be re-copied into 40 

    

 

EXECUTION VERSION   this Agreement) or (ii) failure of any Company Party or any Consenting   Noteholder to act in a manner materially consistent with this Agreement   (other than an immaterial failure), which breach or failure remains uncured   (to the extent curable) before the earlier of (x) five (5) Business Days   after the applicable Required Consenting Term Lenders transmit a written   notice to the Company Parties and the Consenting Noteholders in accordance   with Section 17.10 and (y) one calendar day before the Plan Effective Date   contemplated herein; provided that the Required Consenting Term Lenders may   not terminate this Agreement pursuant to this Section 15.02(a) upon the   breach or failure of any Consenting Noteholder if, at the time or during the   continuation of such breach or failure, the remaining Consenting Noteholders   hold or control in excess of 662/3% of the dollar amount of the Notes under   the Notes Indenture; (b) the failure of any Definitive Document to comply   with the requirements of Section 3.02 of this Agreement, which non-compliance   remains uncured for a period of five (5) Business Days after the applicable   Required Consenting Term Lenders transmit a written notice to the Company   Parties of such breach; (c) the making public (or filing, if under the Chapter   11 Cases) of any of the Definitive Documents (including any amendment or   modification thereof) that contains terms and conditions that are not   consistent with this Agreement or otherwise reasonably acceptable to the   Required Consenting Term Lenders in accordance with this Agreement, and such   public disclosure (or filing, if under the Chapter 11 Cases) is not withdrawn   or such inconsistency is not amended or modified in a manner consistent with   this Agreement or otherwise reasonably acceptable to the Required Consenting   Term Lenders in accordance with this Agreement within five (5) Business Days   after the receipt by the Company Parties of notice of such breach; (d)any   Company Party or any Consenting Noteholder (i)(1) communicates its intention   not to support the Restructuring or (2) files, communicates, executes a   definitive written agreement with respect to, or otherwise supports an   Alternative Restructuring Proposal and (ii) such action has, or may be   reasonably expected to have, an adverse effect on the Company Parties’   ability to consummate the Restructuring; provided that the Required   Consenting Term Lenders may not terminate this Agreement pursuant to this   Section 15.02(d) upon such filing, communication or execution by any   Consenting Noteholder if, at the time of such filing, communication or   execution, the remaining Consenting Noteholders hold or control in excess of   662/3% of the dollar amount of the Notes under the Notes Indenture; (e) the   issuance by any governmental authority, including any regulatory authority or   court of competent jurisdiction, of any final, non-appealable ruling or order   that (i) enjoins the consummation of a material portion of the Restructuring,   including the Plan and (ii) either (1) such ruling, judgment, or order has   been issued at the request of or with the acquiescence of any Company Party   or (2) remains in effect as of the earlier of (A) fifteen (15) Business Days   after such terminating Required Consenting Term Lenders transmit a written   notice in accordance with Section 17.10 detailing any such issuance and (B)   one (1) calendar day immediately prior to the Plan Effective Date   contemplated herein; provided that this termination right may not be   exercised by any Party that sought or requested such ruling or order in   contravention of any obligation set out in this Agreement; 41 

    

 

EXECUTION   VERSION (f) the entry of an order by the Bankruptcy Court, or the filing of a   motion or application by any Company Party seeking an order (without the   prior written consent of the applicable Required Consenting Term Lenders),   (i) converting one or more of the Chapter 11 Cases to a case under chapter 7   of the Bankruptcy Code; (ii) appointing an examiner with expanded powers   beyond those set forth in sections 1106(a)(3) and (4) of the Bankruptcy Code   in one or more of the Chapter 11 Cases; (iii) appointing a trustee under   section 1104 of the Bankruptcy Code in one or more of the Chapter 11 Cases;   (iv) dismissing one or more of the Chapter 11 Cases, (v) terminating   exclusivity under Bankruptcy Code section 1121, or (vi) rejecting this   Agreement; (g) if any Company Party (i) voluntarily commences any case or   files any petition seeking bankruptcy, winding up, dissolution, liquidation,   administration, moratorium, reorganization, or other relief under any   federal, state or foreign bankruptcy, insolvency, administrative   receivership, or similar law now or hereafter in effect, except as   contemplated by this Agreement; (ii) consents to the institution of, or fails   to contest in a timely and appropriate manner, any involuntary proceeding or   petition described in the preceding subsection (i); (iii) applies for or   consents to the appointment of a receiver, administrator, administrative   receiver, trustee, custodian, sequestrator, conservator, or similar official   with respect to any Company Party or for a substantial part of such Company   Party’s assets; (iv) makes a general assignment or arrangement for the   benefit of creditors; or (v) takes any corporate action for the purpose of   authorizing any of the foregoing; (h) an order is entered by the Bankruptcy   Court granting relief from the automatic stay imposed by section 362 of the   Bankruptcy Code authorizing any Person to proceed against any asset of any   Company Party that would materially and adversely affect the Company Party’s   operational or financial performance; (i) any Company Party or any Consenting   Noteholder files any motion or pleading with the Bankruptcy Court that is not   consistent in all material respects with this Agreement, the relief requested   by such motion has, or may be reasonably expected to have, a material adverse   effect on the Company Parties’ ability to consummate the Restructuring, and   such motion has not been withdrawn within two (2) Business Days of the   receipt by the Company Parties or the Consenting Noteholders, as applicable,   of written notice from such Required Consenting Term Lenders that such motion   or pleading is inconsistent with this Agreement; provided that the Required   Consenting Term Lenders may not terminate this Agreement pursuant to this   Section 15.02(i) upon such filing by any Consenting Noteholder if, at the   time of such filing, the remaining Consenting Noteholders hold or control in   excess of 662/3% of the dollar amount of the Notes under the Notes Indenture;   (j) the Bankruptcy Court enters an order in the Chapter 11 Cases, or any   Company Party moves or consents to, terminating any Company Party’s exclusive   right to file a plan or plans of reorganization under section 1121 of the   Bankruptcy Code; (k) the termination of or the exercise of any remedies under   the DIP Facility or any agreement regarding any Company Party’s use of cash   collateral; 42 

    

 

EXECUTION   VERSION (l) the termination or material breach of the Put Option Agreement,   including, for the avoidance of doubt, the failure of (i) any Equity   Commitment Party to make its respective Equity Commitment Commitment,   Agreement; or (ii) any Backstop Commitment Party to make its respective   Backstop in each case, in accordance with the terms and conditions of the Put   Option (m) the Bankruptcy Court grants relief that is inconsistent in any   respect with, or enters an order rejecting, this Agreement and such   inconsistent relief is not dismissed, vacated, or modified to be consistent   with this Agreement before the earlier of (x) five (5) Business Days after   the applicable Required Consenting Term Lenders transmit a written notice to   the Company Parties that such relief is inconsistent with the agreement and   (y) one calendar day before the Plan Effective Date contemplated herein;   (n)the failure of Monitronics to exercise its put option to cause the   Backstop Commitment Parties to purchase the Backstop Commitment Shares in   accordance with the Backstop Commitments pursuant and subject to the terms and   conditions set forth in this Agreement and the Put Option Agreement; (o)   Ascent takes any action that has, or is reasonably expected to have, a   material adverse effect on the Company Parties’ ability to consummate the   Non-Ascent Restructuring; or (p) the Company Parties shall not have complied   with any RSA Milestone (unless such RSA Milestone is waived or amended in   accordance with Section 16 of this Agreement). Notwithstanding anything to   the contrary in this Section 15.02, the Required Consenting Term Lenders may   not terminate this Agreement: (a) due solely to the occurrence of the   Non-Ascent Restructuring Toggle, (b) due solely to a ruling by the Bankruptcy   Court requiring a modification to the Solicitation Materials solely with   respect to the Cash Payout, in which event the Parties will work together in   good faith to address the Bankruptcy Court’s concerns in a manner consistent   with all other material terms of the Restructuring, or (c) pursuant to   Section 15.02(b) or (c) solely if the Definitive Document that gives rise to   such termination right is the Information Sharing Agreement and/or the TSA.   15.03. Company Party Termination Events. This Agreement may be terminated by   the Company Parties, and such termination shall be effective immediately upon   the delivery to the Consenting Noteholders, the Consenting Term Lenders, and   Ascent of a written notice in accordance with Section 17.10, at any time   after the occurrence, and during the continuation, of any of the following   events, in each case, other than as contemplated by the Restructuring: (a)   the material breach by any Consenting Noteholder or any Consenting Term   Lender of any of the respective undertakings, representations, warranties, or   covenants set forth in this Agreement of the Consenting Noteholders or the   Consenting Term Lenders, as applicable, that remains uncured for a period of   five (5) Business Days after the Company Parties transmit a written notice of   such breach to the Consenting Noteholders, the Consenting Term Lenders, and   Ascent in accordance with Section 17.10; provided, that the Company Parties   may not terminate this Agreement pursuant to this Section 15.03(a) upon the   breach or failure of (i) any Consenting 43 

    

 

EXECUTION   VERSION Noteholder if, at the time or during the continuation of such breach   or failure, the remaining Consenting Noteholders hold or control in excess of   662/3% of the dollar amount of the Notes under the Notes Indenture, or (ii)   any Consenting Term Lender, if at the time or during the continuation of such   breach or failure, the remaining Consenting Term Lenders hold or control in   excess of 662/3% of the dollar amount, and in excess of 50% in number of   holders of, the Term Loans under the Credit Agreement; (b) the issuance by   any governmental authority, including any regulatory authority or court of   competent jurisdiction, of any final, non-appealable ruling or order that (i)   enjoins the consummation of a material portion of the Restructuring and (ii)   remains in effect for fifteen (15) Business Days after such terminating   Company Party transmits a written notice in accordance with Section 17.10   detailing any such issuance; provided that this termination right shall not   be exercised if any Company Party sought or requested, directly or   indirectly, such ruling or order in contravention of any obligation or   restriction set out in, or is in a manner inconsistent with, this Agreement;   or (c) upon the date and time that is three (3) Business Days after the   delivery of notice by the Company Parties that they are exercising their   rights in accordance with Section 9.01 hereof. Notwithstanding anything to   the contrary in this Section 15.03, the Company Parties may not terminate   this Agreement: (a) due solely to the occurrence of the Non-Ascent   Restructuring Toggle, or (b) due solely to a ruling by the Bankruptcy Court   requiring a modification to the Solicitation Materials, in which event the   Parties will work together in good faith to address the Bankruptcy Court’s   concerns in a manner consistent with all other material terms of the   Restructuring. 15.04. Ascent Termination Events. This Agreement may be   terminated, solely as to Ascent, by Ascent, and such termination shall be   effective immediately upon the delivery to the Company Parties, the   Consenting Noteholders, and the Consenting Term Lenders of a written notice   in accordance with Section 17.10, at any time after the occurrence, and   during the continuation, of any of the following events, in each case, other than   as contemplated by the Restructuring; provided that Ascent shall have no   termination right under this Section 15.04 after the occurrence of the   Non-Ascent Restructuring Toggle: (a)the (i) material breach in any respect by   any Company Party, any Consenting Noteholder, or any Consenting Term Lender   of any of the undertakings, representations, warranties, or covenants of the   Company Parties, the Consenting Noteholders, or the Consenting Term Lenders,   as applicable, set forth in this Agreement (it being understood and agreed   that any actions and obligations required to be taken by any such Party that   are included in the exhibits attached to this Agreement but not in this   Agreement are to be considered “covenants” of such Party, and therefore   covenants of this Agreement, notwithstanding the failure of any specific   provision in any of the exhibits to be re-copied into this Agreement) or (ii)   failure of any Company Party, any Consenting Noteholder, or any Consenting   Term Lender to act in a manner materially consistent with this Agreement   and/or the Term Sheet (other than an immaterial failure), which breach or   failure remains uncured (to the extent curable) before the earlier of (x) 44 

    

 

EXECUTION   VERSION five (5) Business Days after Ascent transmits a written notice to the   Company Parties, the Consenting Noteholders, and the Consenting Term Lenders,   in accordance with Section 17.10 and (y) one calendar day before the Plan   Effective Date contemplated herein; provided that Ascent may not terminate   this Agreement pursuant to this Section 15.04(a) upon the breach or failure   of (i) any Consenting Noteholder if, at the time or during the continuation   of such breach or failure, the remaining Consenting Noteholders hold or   control in excess of 662/3% of the dollar amount of the Notes under the Notes   Indenture, or (ii) any Consenting Term Lender, if at the time or during the   continuation of such breach or failure, the remaining Consenting Term Lenders   hold or control in excess of 662/3% of the dollar amount, and in excess of   50% in number of holders of, the Term Loans under the Credit Agreement; (b)   the issuance by any governmental authority, including any regulatory   authority or court of competent jurisdiction, of any final, non-appealable   ruling or order that (i) enjoins the consummation of a material portion of   the Restructuring, including the Plan and (ii) either (1) such ruling,   judgment or order has been issued at the request of or with the acquiescence   of any Company Party or (2) remains in effect as of the earlier of (i)   fifteen (15) Business Days after Ascent transmits a written notice in   accordance with Section 17.10 detailing any such issuance and (ii) one (1)   calendar day immediately prior to any proposed Plan Effective Date; provided   that this termination right may not be exercised by any Party that sought or   requested such ruling or order in contravention of any obligation set out in   this Agreement; (c)the entry of an order by the Bankruptcy Court, or the   filing of a motion or application by any Company Party seeking an order   (without the prior written consent of Ascent), (i) converting one or more of   the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code; (ii)   appointing an examiner with expanded powers beyond those set forth in   sections 1106(a)(3) and (4) of the Bankruptcy Code in one or more of the   Chapter 11 Cases; (iii) appointing a trustee under section 1104 of the   Bankruptcy Code in one or more of the Chapter 11 Cases; (iv) dismissing one   or more of the Chapter 11 Cases, or (v) terminating exclusivity under   Bankruptcy Code section 1121; (d) any Company Party, any Consenting   Noteholder, or any Consenting Term Lender files any motion or pleading with   the Bankruptcy Court that is not consistent in all material respects with this   Agreement, the relief requested by such motion has, or may be reasonably   expected to have, a material adverse effect on the Company Parties’ ability   to consummate the Restructuring, and such motion has not been withdrawn   within two (2) Business Days of the receipt by the Company Parties, the   Consenting Noteholders, or the Consenting Term Lenders, as applicable, of   written notice from Ascent that such motion or pleading is inconsistent with   this Agreement; provided that Ascent may not terminate this Agreement   pursuant to this Section 15.04(d) upon such filing, communication or   execution by (i) any Consenting Noteholder if, at the time of such filing,   communication or execution, the remaining Consenting Noteholders hold or   control in excess of 662/3% of the dollar amount of the Notes under the Notes   Indenture, or (ii) any Consenting Term Lender, if at the time of such filing,   communication or execution, the remaining Consenting Term Lenders hold or   control in excess of 662/3% of the dollar amount, and in excess of 50% in   number of holders of, the Term Loans under the Credit Agreement; or 45 

    

 

EXECUTION   VERSION (e) any Company Party, any Consenting Noteholder, or any Consenting   Term Lender (i)(A) communicates its intention not to support the   Restructuring or (B) files, communicates, executes a definitive written   agreement with respect to or otherwise supports an Alternative Restructuring   Proposal and (ii) such action has, or may be reasonably expected to have, an   adverse effect on the Company Parties’ ability to consummate the   Restructuring; provided that Ascent may not terminate this Agreement pursuant   to this Section 15.04(e) upon such filing by (i) any Consenting Noteholder   if, at the time of such filing, the remaining Consenting Noteholders hold or   control in excess of 662/3% of the dollar amount of the Notes under the Notes   Indenture, or (ii) any Consenting Term Lender, if at the time of such filing,   the remaining Consenting Term Lenders hold or control in excess of 662/3% of   the dollar amount, and in excess of 50% in number of holders of, the Term   Loans under the Credit Agreement. Notwithstanding anything to the contrary   herein, Ascent may not terminate this Agreement (a) pursuant to this Section   15.04 to the extent the Ascent Termination Event arises from an action or   failure on the part of the Company Parties that is within Ascent’s control,   or (b) due solely to a ruling by the Bankruptcy Court requiring a   modification to the Solicitation Materials, in which event the Parties will   work together in good faith to address the Bankruptcy Court’s concerns in a   manner consistent with all other material terms of the Restructuring. 15.05.   Mutual Termination.This Agreement, and the obligations of all Parties   hereunder, may be terminated by mutual written agreement among all of the   following: (a) the Required Consenting Noteholders; (b) the Required   Consenting Term Lenders; (c) Ascent; and (d) Monitronics; provided, however,   that after the occurrence of the Non-Ascent Restructuring Toggle, this Agreement   and the obligations of all Parties hereunder may be terminated by mutual   written agreement of the Required Consenting Noteholders, the Required   Consenting Term Lenders and Monitronics. 15.06. Automatic Termination. This   Agreement shall terminate automatically without any further required action   or notice immediately after the earlier of (i) the Plan Effective Date and   (ii) the Outside Date. 15.07. Limitation on Termination Rights. A Party may   not terminate this Agreement pursuant to Sections 15.01 - 15.04 if such Party   failed to perform or comply in any material respect with the terms and   conditions of this Agreement, and such failure to perform or comply caused,   or resulted in, the occurrence of one or more termination events specified   herein. 15.08. Effect of Termination. Except as set forth in Section 17.17,   upon the occurrence of a Termination Date, as applicable, this Agreement   shall be of no further force and effect, and each Party shall be released   from its respective commitments, undertakings, and agreements under or   related to this Agreement and shall have the rights and remedies that it   would have had, had it not entered into this Agreement, and shall be entitled   to take all actions, whether with respect to the Restructuring or otherwise,   that it would have been entitled to take had it not entered into this   Agreement, including with respect to any Claims or causes of action;   provided, however, that in no event shall any such termination relieve a   Party from liability for its breach or nonperformance of its obligations   under this Agreement prior to the Termination Date. Upon the occurrence of a   Termination Date prior to the Plan Effective Date, any consent, agreement, 46   

    

 

EXECUTION   VERSION undertaking, tender, waiver, forbearance, ballot, or vote delivered   by a Party subject to such termination before a Termination Date shall be   deemed, for all purposes, to be null and void from the first instance and   shall not be considered or otherwise used in any manner by the Parties in connection   with the Restructuring and this Agreement or otherwise. Notwithstanding   anything to the contrary in this Agreement, the foregoing shall not be   construed to prohibit any Party from contesting whether any such termination   is in accordance with its terms or to seek enforcement of any rights under   this Agreement that arose or existed before a Termination Date. Except as   expressly provided in this Agreement, nothing herein is intended to, or does,   in any manner waive, limit, impair, or restrict any right of any Party, or   the ability of any Party, to protect and preserve its rights (including   rights under this Agreement or any Definitive Document), remedies, and   interests, including its claims against any other Party. For the avoidance of   doubt, the automatic stay arising under section 362 of the Bankruptcy Code   shall be deemed waived or modified solely for purposes of providing notice or   exercising rights hereunder. Section 16. Amendments and Waivers. (a) This   Agreement may not be modified, amended, or supplemented, and no condition or   requirement of this Agreement may be waived, in any manner except in   accordance with this Section 16 and subject to Section 3.02. (b) This   Agreement may be modified, amended, or supplemented, or a condition or   requirement of this Agreement may be waived, only in a writing signed by the   Company Parties, the Required Consenting Noteholders, the Required Consenting   Term Lenders, and Ascent; provided that (i) any waiver, modification,   amendment or supplement to this Section 16(b) shall require the prior written   consent of each Party; (ii) any waiver, modification, amendment or supplement   to the definition of Required Consenting First Lien Lenders and/or Required   Consenting Noteholders, respectively, shall require the prior written consent   of each applicable Consenting Creditor that is a member of the Ad Hoc Lender   Group and/or the Ad Hoc Noteholder Group, respectively; and (iii) any waiver,   modification, amendment or supplement that disproportionately and adversely   affects the economic recoveries or treatment of any Consenting Noteholder or   Consenting Term Lender, relative to the other Consenting Noteholders or   Consenting Term Lenders, respectively, may not be made without the prior   written consent of each such affected Consenting Noteholder or Consenting   Term Lender; provided further that after the occurrence of the Non-Ascent   Restructuring Toggle, the Company Parties, the Required Consenting   Noteholders, and the Required Consenting Term Lenders may modify, amend or   supplement this Agreement, or waive a condition or requirement of this   Agreement, in writing pursuant to this Section 16(b) without the consent of   Ascent. Notwithstanding anything to the contrary in this Section 16, this   Agreement may not be modified, amended or supplemented in any way that   modifies the obligations of or adversely affects the rights of Ascent, in   each case, without the written consent of Ascent. (c) Any proposed   modification, amendment, waiver, or supplement that does not comply with this   Section 16 shall be ineffective and void ab initio. 47 

    

 

EXECUTION   VERSION (d) The waiver by any Party of a breach of any provision of this   Agreement shall not operate or be construed as a further or continuing waiver   of such breach or as a waiver of any other or subsequent breach. No failure   on the part of any Party to exercise, and no delay in exercising, any right,   power, or remedy under this Agreement shall operate as a waiver of any such   right, power, or remedy or any provision of this Agreement, nor shall any   single or partial exercise of such right, power, or remedy by such Party   preclude any other or further exercise of such right, power, or remedy or the   exercise of any other right, power or remedy. All remedies under this   Agreement are cumulative and are not exclusive of any other remedies provided   by Law. Section 17.Miscellaneous. 17.01. Acknowledgement. Notwithstanding any   other provision herein, this Agreement is not and shall not be deemed to be   an offer with respect to any securities or solicitation of votes for the   acceptance of a plan of reorganization for purposes of sections 1125 and 1126   of the Bankruptcy Code or otherwise. Any such offer or solicitation shall be   made only in compliance with all applicable securities Laws, provisions of   the Bankruptcy Code, and/or other applicable Law. 17.02. Exhibits   Incorporated by Reference; Conflicts.Each of the exhibits, annexes,   signatures pages, and schedules attached hereto is expressly incorporated   herein and made a part of this Agreement, and all references to this   Agreement shall include such exhibits, annexes, and schedules. In the event   of any inconsistency between this Agreement (without reference to the   exhibits, annexes, and schedules hereto) and the exhibits, annexes, and   schedules hereto, this Agreement (without reference to the exhibits, annexes,   and schedules thereto) shall govern. 17.03. Further Assurances. Subject to   the other terms of this Agreement, the Parties agree to cooperate with each   other in good faith in connection with, and shall exercise good faith and   commercially reasonable efforts with respect to the pursuit, approval,   negotiation, execution, delivery, implementation, and consummation of the   Restructuring, as well as the negotiation, drafting, execution, and delivery   of the Definitive Documents. Furthermore, subject to the terms hereof, each   of the Parties shall take such action as may be reasonably necessary and   appropriate to carry out the purposes and intent of this Agreement, including   making and filing any required regulatory filings, and shall refrain from   taking any action that would frustrate the purposes and intent of this   Agreement; provided however that this Section 17.03 shall not limit the right   of any Party to exercise any right or remedy provided for in this Agreement.   17.04. Complete Agreement.Except as otherwise explicitly provided herein,   this Agreement constitutes the entire agreement among the Parties with   respect to the subject matter hereof and supersedes all prior agreements,   oral or written, among the Parties with respect thereto, other than any   Confidentiality Agreement. 17.05. GOVERNING LAW; SUBMISSION TO JURISDICTION;   SELECTION OF FORUM. THIS AGREEMENT (AND ANY CLAIMS OR CAUSE OF ACTION ARISING   UNDER, OUT OF OR IN CONNECTION WITH THIS AGREEMENT, WHETHER IN CONTRACT, TORT   OR STATUTE) SHALL BE GOVERNED BY AND CONSTRUED IN 48 

    

 

EXECUTION   VERSION ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO   CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO   THE CONFLICT OF LAWS PRINCIPLES THEREOF. Each of the Parties irrevocably and   unconditionally agrees that, subject to the immediately following sentence of   this Section 17.05, any legal action, suit, or proceeding against it with   respect to any matter arising under, out of or in connection with this   Agreement or for recognition or enforcement of any judgment rendered in any   such action, suit, or proceeding, may be brought any state or federal court   of competent jurisdiction in New York County, State of New York, and by   execution and delivery of this Agreement, each of the Parties: (a)   irrevocably submits itself to the nonexclusive jurisdiction of such court,   (b) waives any objection to laying venue in any such action, suit, or   proceeding and (c) waives any objection that such court is an inconvenient   forum or does not have jurisdiction over such Party. Notwithstanding the   foregoing consent to jurisdiction in either a state or federal court of   competent jurisdiction in the State and County of New York, upon the   commencement of the Chapter 11 Cases, each of the Parties hereby agrees that,   if the Chapter 11 Cases are pending, the Bankruptcy Court shall have   exclusive jurisdiction over all matters arising out of or in connection with   this Agreement. Each Party agrees that it shall bring any action or   proceeding in respect of any claim arising under, out of or in connection   with this Agreement, to the extent possible, in the Bankruptcy Court, and   solely in connection with claims arising under, out of or in connection with   this Agreement: (a) irrevocably submits to the exclusive jurisdiction of the   Bankruptcy Court; (b) waives any objection to laying venue in any such action   or proceeding in the Bankruptcy Court; and (c) waives any objection that the   Bankruptcy Court is an inconvenient forum or does not have jurisdiction over   any Party. 17.06. TRIAL BY JURY WAIVER. EACH PARTY IRREVOCABLY WAIVES ANY   RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING UNDER, OUT OF OR IN   CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY   (WHETHER IN CONTRACT, TORT, OR STATUTE). 17.07. Execution of Agreement. This   Agreement may be executed and delivered in any number of counterparts and by   way of electronic signature and delivery, each such counterpart, when   executed and delivered, shall be deemed an original, and all of which   together shall constitute the same agreement. Except as expressly provided in   this Agreement, each individual executing this Agreement on behalf of a Party   has been duly authorized and empowered to execute and deliver this Agreement   on behalf of said Party. Signature pages executed by each of the Parties   shall be delivered to counsel to each of the other Parties in unredacted form   (which signature pages may be delivered by counsel); provided that such   signature pages may only be delivered to the individual Consenting Creditors   in a redacted form that removes such Consenting Creditors’ holdings; provided   further that such signature pages shall be subject to Section 17.21. 17.08.   Rules of Construction. (a)This Agreement is the product of negotiations among   the Company Parties, the Consenting Creditors and Ascent, and in 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 Agreement,   or any 49 

    

 

EXECUTION   VERSION portion hereof, shall not be effective in regard to the   interpretation hereof. The Company Parties, the Consenting Creditors and   Ascent were each represented by counsel during the negotiations and drafting   of this Agreement and continue to be represented by counsel. (b) The title of   and the section and paragraph headings in this Agreement are for convenience   of reference only and shall not govern or affect the interpretation of any of   the terms or provisions of this Agreement. Where specific language is used to   clarify by example a general statement contained herein, such specific   language shall not be deemed to modify, limit, or restrict in any manner the   construction of the general statement to which it relates. The language used   in this Agreement has been chosen by the Parties to express their mutual   intent, and no rule of strict construction shall be applied against any   Party. The definitions of terms herein shall apply equally to the singular   and plural forms of the terms defined. Whenever the context may require, any   pronoun shall include the corresponding masculine, feminine, and neuter   forms. The words “include,” “includes” and “including” shall be deemed to be   followed by the phrase “without limitation.” The word “will” shall be   construed to have the same meaning and effect as the word “shall.” Unless the   context requires otherwise (a) any definition of or reference to any   agreement, instrument or other document herein shall be construed as referring   to such agreement, instrument, or other document as from time to time   amended, supplemented, or otherwise modified (subject to any restrictions on   such amendments, supplements, or modifications set forth in this Agreement),   (b) any reference herein to any Person shall be construed to include such   Person’s successors and assigns, (c) the words “herein,” “hereof” and   “hereunder,” and words of similar import, shall be construed to refer to this   Agreement in its entirety and not to any particular provision hereof, (d)   unless otherwise specified, all references herein to Articles, Sections,   Exhibits and Schedules shall be construed to refer to Articles and Sections   of, and Exhibits and Schedules to, this Agreement, (e) any reference to any   law or regulation herein shall, unless otherwise specified, refer to such law   or regulation as amended, modified, or supplemented from time to time, (f)   the words “asset” and “property” shall be construed to have the same meaning   and effect and to refer to all tangible and intangible assets and properties,   including cash, securities, accounts, and contract rights, and (g) the term   “reasonably acceptable” shall be construed to include a proviso that the   accepting party will not unreasonably withhold or delay its consent. 17.09.   Successors and Assigns; Third Parties. This Agreement is intended to bind and   inure to the benefit of the Parties and their respective successors and   permitted assigns, as applicable. There are no third party beneficiaries   under this Agreement, and the rights or obligations of any Party under this   Agreement may not be assigned, delegated, or transferred to any other Person.   17.10. Notices. All notices hereunder shall be deemed given if in writing and   delivered, by electronic mail, courier, or registered or certified mail   (return receipt requested), to the following addresses (or at such other   addresses as shall be specified by like notice): (a) if to a Company Party,   to: Monitronics International, Inc. 1990 Wittington Place 50 

    

 

EXECUTION   VERSION Farmers Branch, TX 75234 Attn:William E. Niles   (wniles@ascentcapitalgroupinc.com) Fred Graffam (fGraffam@mymoni.com) with   copies to: Latham & Watkins LLP 885 Third Avenue New York, New York 10022   Attn:Roger G. Schwartz (roger.schwartz@lw.com) David A. Hammerman   (david.hammerman@lw.com) (b) if to a Consenting Creditor, to each Consenting   Creditor at the addresses or e-mail addresses set forth below the Consenting   Creditor’s signature page to this Agreement (or to the signature page to a   Joinder or Transfer Agreement in the case of any Consenting Creditor that   becomes a Party after the initial Agreement Effective Date): with a copy to   (which shall not constitute notice): For the Consenting Noteholders: Stroock   & Stroock & Lavan LLP 180 Maiden Lane New York, NY 10038   Attn:Kristopher M. Hansen (khansen@stroock.com) Sayan Bhattacharyya   (sbhattacharyya@stroock.com) For the Consenting Term Lenders: Jones Day 250   Vesey Street New York, NY 10281 Attn:Scott J. Greenberg   (sgreenberg@jonesday.com) Michael C. Schneidereit   (mschneidereit@jonesday.com) (c) if to Ascent, to: Baker Botts L.L.P. 30   Rockefeller Plaza New York, NY 10112 Attn:Renee L. Wilm   (renee.wilm@bakerbotts.com) Emanuel. Grillo (emanuel.grillo@bakerbotts.com)   Any notice given by delivery, mail, or courier shall be effective when   received. 51 

    

 

EXECUTION   VERSION 17.11. Independent Due Diligence and Decision Making. Each Consenting   Creditor and Ascent hereby confirms that its decision to execute this   Agreement has been based upon its independent investigation of the   operations, businesses, financial, and other conditions, and prospects of the   Company Parties. 17.12. Enforceability of Agreement. Each of the Parties to   the extent enforceable waives any right to assert that the exercise of   termination rights under this Agreement is subject to the automatic stay   provisions of the Bankruptcy Code, and expressly stipulates and consents   hereunder to the prospective modification of the automatic stay provisions of   the Bankruptcy Code solely for purposes of exercising termination rights   under this Agreement, to the extent the Bankruptcy Court determines that such   relief is required. 17.13. Waiver. If the Restructuring is not consummated,   or if this Agreement is terminated for any reason, the Parties fully reserve   all of their rights. Pursuant to Federal Rule of Evidence 408 and any other   applicable rules of evidence, this Agreement and all negotiations relating   hereto shall not be admissible into evidence in any proceeding other than a   proceeding to enforce its terms or the payment of damages to which a Party may   be entitled under this Agreement. 17.14. Specific Performance.It is   understood and agreed by the Parties that money damages would be an   insufficient remedy for any breach of this Agreement by any Party, and each   non-breaching Party shall be entitled to specific performance and injunctive   or other equitable relief (without the posting of any bond and without proof   of actual remedy of any such breach, including an order of the Bankruptcy   Court or competent jurisdiction requiring any Party to comply promptly with   any of hereunder. damages) as a other court of its obligations 17.15.   Several, Not Joint, Claims. Except where otherwise specified, the agreements,   representations, warranties, and obligations of the Parties under this   Agreement are, in all respects, several and not joint. 17.16. Severability   and Construction. If any provision of this Agreement shall be held by a court   of competent jurisdiction to be illegal, invalid, or unenforceable, the   remaining provisions shall remain in full force and effect if essential terms   and conditions of this Agreement for each Party remain valid, binding, and   enforceable. 17.17. Survival. Notwithstanding (a) any Transfer of any Company   Claims in accordance with Section 10 or (b) the termination of this Agreement   in accordance with its terms, the agreements and obligations of the Parties   in Section 15.08, Section 17 and any confidentiality provisions shall survive   such Transfer and/or termination and shall continue in full force and effect   for the benefit of the Parties in accordance with the terms hereof and   thereof; provided, further, that any liability of a Party for failure to   comply with the terms of this Agreement shall survive such termination.   17.18. Remedies Cumulative.All rights, powers, and remedies provided under   this Agreement or otherwise available in respect hereof at Law or in equity   shall be cumulative and not alternative, and the exercise of any right,   power, or remedy thereof by any Party shall not 52 

    

 

EXECUTION   VERSION preclude the simultaneous or later exercise of any other such right,   power, or remedy by such Party. 17.19. Capacities of Consenting Creditors.   Each Consenting Creditor has entered into this Agreement on account of all   Company Claims that it holds (directly or through discretionary accounts that   it manages or advises) and, except where otherwise specified in this   Agreement, shall take or refrain from taking all actions that it is obligated   to take or refrain from taking under this Agreement with respect to all such   Company Claims. Notwithstanding any other provision of this Agreement, each   Consenting Creditor has entered into this Agreement solely in its capacity as   a holder of Company Claims, and the commitments and obligations of Consenting   Creditors under this Agreement do not apply to any Consenting Creditor in its   capacity as the beneficial owner (or the nominee, investment manager, advisor   or subadvisor for the beneficial owner) of Ascent Equity Interests. 17.20.   Email Consents.Where a written consent, acceptance, approval, or waiver is   required pursuant to or contemplated by this Agreement, including a written   approval by the Company Parties, the Required Consenting Noteholders, the   Required Consenting Term Lenders, or Ascent, such written consent,   acceptance, approval, or waiver shall be deemed to have occurred if, by   agreement between counsel to the Parties submitting and receiving such   consent, acceptance, approval, or waiver, it is conveyed in writing   (including electronic mail) between each such counsel without representations   or warranties of any kind on behalf of such counsel. 17.21. Confidentiality   and Publicity. (a) No Party shall (1) use the name or any other identifying   information of any Noteholder or First Lien Term Lender in any communication   regarding the matters contemplated hereby (including a press release,   pleading, or other publicly available document) (other than a communication   with the legal, accounting, financial, and other advisors to the Company   Parties who are under obligations of confidentiality to the Company Parties   with respect to such communication, and whose compliance with such   obligations the Company Parties shall be responsible for) without such   Noteholder’s or First Lien Term Lender’s prior written consent; provided   that, this subsection (a)(1) shall not prevent any Party from complying with   applicable Law, including any disclosure requirements in the Chapter 11   Cases, or enforcing or preserving its rights under this Agreement against any   other Party, or (2) disclose to any Person (including for the avoidance of   doubt, any other Noteholder or First Lien Term Lender), other than legal,   accounting, financial, and other advisors to the Company Parties, the name or   the principal amount or percentage of the Company Claims held by any Noteholder   or First Lien Term Lender or any of its respective subsidiaries (including,   for the avoidance of doubt, any Company Claims acquired pursuant to any   Transfer); provided, however, that the Company Parties shall be permitted to   disclose at any time the aggregate principal amount of, and aggregate   percentage of, any class of the Company Claims held collectively by the   Consenting Noteholders and/or collectively by the Consenting Term Lenders.   (b) Notwithstanding the foregoing, the Consenting Creditors hereby consent to   the disclosure of the execution, terms, and contents of this Agreement by the   Company Parties in the 53 

    

 

EXECUTION   VERSION Definitive Documents or as otherwise required by law or regulation;   provided, however, that (i) if any of the Company Parties or Ascent   determines that they are required to attach a copy of this Agreement, any   Joinder or Transfer Agreement to any Definitive Documents or any other filing   or similar document relating to the transactions contemplated hereby, they   will redact any reference to or identifying information concerning a specific   Consenting Creditor and such Consenting Creditor’s name and holdings   (including before filing any pleading with the Bankruptcy Court) and (ii) if   disclosure of identifying information of any Consenting Noteholder or   Consenting Term Lender is required by applicable Law, advance notice of the   intent to disclose, if permitted by applicable Law, shall be given by the   disclosing Party to each Consenting Noteholder or Consenting Term Lender, as   applicable (who shall have the right to seek a protective order prior to   disclosure). Nothing contained herein shall be deemed to waive, amend or   modify the terms of any Confidentiality Agreement. (c) Ascent and Monitronics   shall consult with the advisors to the Ad Hoc Noteholder Group and the Ad Hoc   Lender Group before issuing any press release or making any public filing   announcing entry into this Agreement or any of the Definitive Documents and   shall submit drafts to the advisors to the Ad Hoc Noteholder Group and the Ad   Hoc Lender Group of any such press releases or other public filings as soon   as reasonably practicable prior to making any such disclosure, and shall   afford such advisors a reasonable opportunity to comment on such documents   and disclosures, and such documents and disclosures shall be in form and   substance reasonably acceptable to such advisors; provided that Ascent and   Monitronics shall be permitted, upon twenty-four (24) hours’ notice to the Ad   Hoc Noteholder Group and the Ad Hoc Lender Group, to make any filings with   the SEC as either of their respective counsel shall determine to be necessary   to cause Ascent or Monitronics to comply with this Agreement. 17.22.   Relationship Among Parties. Notwithstanding anything to the contrary herein,   the duties and obligations of the Consenting Creditors under this Agreement   shall be several, not joint. None of the Consenting Creditors shall, solely   as a result of entering into this Agreement, have any fiduciary duty, any   duty of trust or confidence in any form, or other duties or responsibilities   to each other, any Consenting Creditors, Ascent, any of Ascent’s respective   creditors or other stakeholders, any Company Party, or any of the Company   Party’s respective creditors or other stakeholders, and there are no   commitments among or between the Consenting Creditors, in each case except as   expressly set forth in this Agreement. No prior history, pattern, or practice   of sharing confidence among or between any of the Consenting Creditors, Ascent   and/or the Company Parties shall in any way affect or negate this   understanding and agreement. It is understood and agreed that any Consenting   Creditor may trade in the Company Claims without the consent of any other   Party, subject to applicable securities laws and the terms of this Agreement.   No Party hereto shall have any responsibility with respect to the Transfer of   any Company Claims by any other Party by virtue of this Agreement. The   Parties have no agreement, arrangement, or understanding with respect to   acting together for the purpose of acquiring, holding, voting, or disposing   of any securities of any of the Company Parties and do not constitute a   “group” within the meaning of Section 13(d)(3) of the Exchange Act or Rule   13d-5 promulgated thereunder. For the avoidance of doubt, no Consenting   Creditor shall, nor shall any action taken by a Consenting Creditor pursuant   to this Agreement, be deemed to be acting in concert or as any group with any   other Consenting Creditor with respect to the 54 

    

 

EXECUTION   VERSION obligations under this Agreement nor shall this Agreement create a   presumption that the Consenting Creditors are in any way acting as a group.   17.23. Damages. Notwithstanding anything to the contrary in this Agreement,   none of the Parties shall claim or seek to recover from any other Party on   the basis of anything in this Agreement any punitive, special, indirect, or   consequential damages or damages for lost profits. IN WITNESS WHEREOF, the   Parties hereto have executed this Agreement on the day and year first above   written. [Signatures Follow] 55 

    

 

Schedule 1 RSA   Milestones 1. The Company Parties shall commence solicitation of votes to   accept or reject the Plan within twelve (12) days following the Agreement   Effective Date (the “Prepetition Solicitation Commencement Date”). 2. The Put   Option Agreement shall be entered into and an executed copy shall be   delivered to all Parties by the date that is no later than five (5) Business   Days after the Agreement Effective Date. 3. The prepetition solicitation of   votes to accept or reject the Plan shall be completed by the date that is no   later than twenty (20) days after the Prepetition Solicitation Commencement   Date (the “Prepetition Solicitation Deadline”). 4. A final agreement with   respect to the material terms of the DIP Facility shall be agreed upon by the   Parties and the DIP Lenders by the date that is no later than one (1) day   prior to the Petition Date. 5. The Company Parties shall commence the Chapter   11 Cases by filing voluntary petitions under chapter 11 of the Bankruptcy   Code with the Bankruptcy Court by the date that is no later than five (5)   Business Days after the Prepetition Solicitation Deadline (the “Petition Date   Milestone”). 6. The Company Parties shall file on the Petition Date: a. the   First Day Pleadings, b. the Plan and the Disclosure Statement, and one or   more motions seeking (A) conditional approval of the Disclosure Statement and   the other Solicitation Materials on an interim basis, (B) approval of the   Rights Offering Procedures, (C) approval of the Backstop Commitment   Documents, and (D) approval of the Disclosure Statement and the other   Solicitation Materials on a final basis and confirmation of the Plan; and c.   a motion seeking approval of the DIP Facility and the use of cash collateral.   7. The Bankruptcy Court shall have entered one or more orders conditionally   approving the Disclosure Statement and the other Solicitation Materials on an   interim basis and approving the Rights Offering Procedures by the date that   is no later than three (3) days after the Petition Date. 8. The Bankruptcy   Court shall have entered the Final DIP Order (as defined in the Restructuring   Term Sheet) by the date that is no later than forty-five (45) days after the Petition   Date. 

    

 

9. The   Bankruptcy Court shall have entered the Backstop Approval Order by the date   that is no later than forty-five (45) days after the Petition Date. 10. The   Bankruptcy Court shall have entered an order approving the Disclosure   Statement and the other Solicitation Materials on a final basis by the date   that is no later than sixty (60) days after the Petition Date. 11. The   Bankruptcy Court shall have entered an order confirming the Plan by the date   that is no later than sixty (60) days after the Petition Date. 12. The Plan   shall become effective by the date that is no later than seventy-five (75)   days after the Petition Date. 

    

 

Schedule 2   Specified Defaults1 1. Any Default or Event of Default arising due to the   failure of the Borrower to satisfy the requirement of Section 6.01(a) of the   Credit Agreement that the report and opinion of Ernst & Young, KPMG or   another independent certified public accountant of nationally recognized   standing reasonably acceptable to the Required Lenders delivered with respect   to the consolidated balance sheet of the Borrower and its Subsidiaries as at   the end of the fiscal year ended December 31, 2018, and the related   consolidated statement of income or operations, and consolidated statement of   changes in shareholders’ equity, and cash flows for such fiscal year, not   include an explanatory paragraph expressing substantial doubt about the   ability of the Borrower or any Loan Party to continue as a going concern or   any qualification or exception as to the scope of such audit. 2. Any Default   or Event of Default under Section 7.11(c) of the Credit Agreement with   respect to the Consolidated Senior Secured Eligible RMR Leverage Ratio as of   the fiscal quarter ending March 31, 2019. 3. Any Default or Event of Default   under Section 8.01(e) of the Credit Agreement, resulting from the Borrower’s   failure to make the interest payment due on April 1, 2019 under the Senior   Unsecured Notes. 4. Any Event of Default (as defined in the Notes Indenture)   under Section 6.1(2) of the Notes Indenture resulting from the Borrower’s   failure to make the interest payment due on the Notes on April 1, 2019   pursuant to the Notes and the Notes Indenture. 1 Capitalized terms used in   this Schedule 2 but not defined herein or in the Agreement have the meanings   ascribed to them in the Credit Agreement. 

    

 

 

EXHIBIT A   Restructuring Term Sheet 

    

 

EXECUTION   VERSION MONITRONICS INTERNATIONAL, INC. RESTRUCTURING TERM SHEET This term   sheet (collectively with all exhibits, annexes and schedules hereto, as each   may be amended, restated, amended and restated, supplemented or otherwise   modified in accordance with the terms of the Restructuring Support Agreement,   this “Restructuring Term Sheet”), which is Exhibit A to the Restructuring   Support Agreement, dated as of May 20, 2019 (collectively with all exhibits,   annexes, and schedules thereto, as each may be amended, restated, amended and   restated, supplemented, or otherwise modified from time to time in accordance   with the terms thereof, the “Restructuring Support Agreement”),1 summarizes   certain terms and conditions (and does not purport to summarize all of the   terms and conditions) of the proposed restructuring transactions for   Monitronics International, Inc., a Texas corporation (“Monitronics”), and   each of its direct and indirect domestic subsidiaries that are signatories to   the Restructuring Support Agreement (collectively, with Monitronics, each a   “Company Party,” and collectively, the “Company Parties”), in accordance   with, subject to the terms and conditions in, and consistent in all material   respects with the Restructuring Support Agreement (the “Restructuring”). THIS   RESTRUCTURING TERM SHEET DOES NOT CONSTITUTE (NOR SHALL IT BE CONSTRUED AS)   AN OFFER TO SELL OR BUY, OR THE SOLICITATION OF AN OFFER TO SELL OR BUY ANY   SECURITIES OR A SOLICITATION OR ACCEPTANCE OF A CHAPTER 11 PLAN WITHIN THE   MEANING OF SECTION 1125 OF THE BANKRUPTCY CODE (AS DEFINED BELOW), IT BEING   UNDERSTOOD THAT ANY SUCH OFFER OR SOLICITATION WILL BE MADE ONLY IN   COMPLIANCE WITH APPLICABLE LAW. Without limiting the generality of the   foregoing, this Restructuring Term Sheet and the undertakings contemplated   herein are subject in all respects to the negotiation, execution and delivery   of the Definitive Documents (as defined in the Restructuring Support   Agreement). This Restructuring Term Sheet is provided as part of a settlement   proposal in furtherance of settlement discussions and is entitled to   protection from any use or disclosure to any party or person pursuant to   Federal Rule of Evidence 408 and any applicable statutes, doctrines or rules   protecting the use or disclosure of confidential information and information   exchanged in the context of settlement discussions. 1 Capitalized terms used   but not otherwise defined in this Restructuring Term Sheet have the meanings   ascribed to such terms in the Restructuring Support Agreement. Material   Restructuring Terms Chapter 11 Cases This Restructuring Term Sheet   contemplates the restructuring of Monitronics and each of the Company   Parties.The 

    

 

2 Restructuring   will be consummated through voluntary cases (the “Chapter 11 Cases”)   commenced by each of the Company Parties under chapter 11 of title 11 of the   United States Code (the “Bankruptcy Code”), in the United States Bankruptcy   Court for the Southern District of Texas, Houston Division (the “Bankruptcy   Court”) and pursuant to a partial prepackaged chapter 11 plan of   reorganization consistent in all material respects with the Restructuring   Support Agreement and this Restructuring Term Sheet (collectively with all   exhibits, annexes and schedules thereto, as each may be amended, restated,   amended and restated, supplemented or otherwise modified in accordance with   its terms and the terms of the Restructuring Support Agreement, the “Plan”)   to be confirmed by the Bankruptcy Court. Restructuring Support Agreement To   effectuate the Restructuring, the following parties will enter into the   Restructuring Support Agreement: (i) the Company Parties; (ii) certain of 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, (those Noteholders that are signatories to   the Restructuring Support Agreement are referred to as the “Consenting   Noteholders”); (iii) certain of the Term Lenders (as defined in the Credit   Agreement) (the “First Lien Term Lenders”) party to the Credit Agreement   (those First Lien Term Lenders that are signatories to the Restructuring   Support Agreement are referred to as the “Consenting Term Lenders”); and (iv)   Ascent Capital Group, Inc. (“Ascent”). Summary of Restructuring In connection   with the Restructuring: (i) solely to the extent that the Non-Ascent   Restructuring Toggle has not occurred, the Merger shall be consummated on the   terms set forth in the Restructuring Support Agreement, this Restructuring   Term Sheet, and in the Rights Offering and Equity Commitment Term Sheet; (ii)   within five (5) days of the Petition Date, the Debtors shall 

    

 

3 commence the   Rights Offering (as defined in the Rights Offering and Equity Commitment Term   Sheet) in accordance with the terms and conditions set forth in the   Restructuring Support Agreement, this Restructuring Term Sheet, the Rights   Offering and Equity Commitment Term Sheet, and the Put Option Agreement;   (iii) the Backstop Commitment Parties (as defined in the Restructuring   Support Agreement) will backstop (a) the Rights Offering up to the full   Aggregate Rights Offering Amount (as defined in the Rights Offering and   Equity Commitment Term Sheet), and (b) the Net Cash Shortfall Amount or   Ascent Default Amount (each as defined in the Rights Offering and Equity   Commitment Term Sheet), as applicable, on the terms and conditions set forth   in the Restructuring Support Agreement, this Restructuring Term Sheet, the   Rights Offering and Equity Commitment Term Sheet, and the Put Option   Agreement; (iv) the Equity Commitment Parties (as defined in the   Restructuring Support Agreement) will purchase the Equity Commitment Shares   (as defined in the Rights Offering and Equity Commitment Term Sheet) for an   aggregate purchase price of $100 million, payable by exchanging an aggregate   principal amount of $100 million of Contributed Term Loans (as defined in the   Rights Offering and Equity Commitment Term Sheet) on the terms and conditions   set forth in the Restructuring Support Agreement, this Restructuring Term   Sheet, the Rights Offering and Equity Commitment Term Sheet, and the Put   Option Agreement; (v) the Company Parties and the “Lenders” (as defined in   the Takeback Exit Term Loan Facility Term Sheet (as defined in the   Restructuring Support Agreement)) (the “Takeback Exit Term Loan Facility   Lenders”) will enter into the Takeback Exit Term Loan Facility (as defined   below) on the terms and conditions set forth in the Restructuring Support   Agreement, this Restructuring Term Sheet, the Takeback Exit Term Loan   Facility Term Sheet (as defined in the Restructuring Support Agreement), and   the Takeback Exit Term Loan Facility Documents (as defined in the   Restructuring Support Agreement); (vi) the Company Parties and the “Lenders”   (as defined in the DIP/Exit Facility Commitment) (the “New Exit Facility   Lenders”) will enter into the New Exit Facilities (as defined below) on the   terms and conditions set forth in the Restructuring Support Agreement, this   Restructuring Term 

    

 

4 Sheet, the   DIP/Exit Facility Commitment, and the New Exit Facilities Documents (as   defined in the Restructuring Support Agreement); (vii) the Company Parties   and the DIP Lenders (as defined below) will enter into the DIP Facility (as   defined below) on the terms and conditions set forth in the Restructuring   Support Agreement, this Restructuring Term Sheet, the DIP/Exit Facility   Commitment, and the DIP Documents (as defined in the Restructuring Support   Agreement); and (viii) the Company Parties shall commence solicitation of   votes on the Plan in accordance with applicable law within twelve (12) days   of the Agreement Effective Date. On the Plan Effective Date, pursuant to the   Plan: (i) the Notes will be cancelled and each of the Noteholders shall   receive on account of its Claims arising under the Notes (each, a “Note   Claim” and collectively, the “Note Claims”): (a) cash in an amount equal to   the Cash Payout (as defined below) or (b) solely to the extent that such   Noteholder timely and validly elects the Cash Opt Out Election (as defined   below), (1) its pro rata share of the Notes Shares (as defined below), plus   (2) Rights (as defined in the Rights Offering and Equity Commitment Term   Sheet) to acquire New Common Stock (as defined in the Restructuring Support Agreement)   to be issued in the Rights Offering. (ii) solely in the event and to the   extent that (a) the Non-Ascent Restructuring Toggle has not occurred and (b)   the Merger is in fact consummated pursuant to the terms hereof and the   Restructuring Support Agreement, then the shareholders of Ascent shall   receive the Ascent Share Distribution (as defined below); (iii) each of the   First Lien Revolving Lenders shall have received repayment in full of all   Claims on account of the outstanding Revolving Credit Loans (as defined in   the Credit Agreement) from the proceeds of the DIP Facility; (iv) each of the   DIP Lenders shall receive payment in accordance with the terms and conditions   of the DIP/Exit Facility Commitment; and (v) each of the First Lien Term   Lenders shall receive, on account of its Claims arising under the Credit   Agreement, its pro rata share of: (a) the Effective Date Pay Down (as defined   below), which, together with the equitization of the 

    

 

2 For the   avoidance of doubt, upon termination of the Agreement Effective Period (other   than due to the Plan going effective), the rights of the First Lien Term   Lenders to seek additional and/or different adequate protection (including,   without limitation, interest at the default rate) and the rights of all other   Parties to object to any such requests are expressly reserved. 5 Contributed   Term Loans (as defined in the Rights Offering and Equity Commitment Term   Sheet), will result in an aggregate reduction of the Term Loans by $250   million in principal amount; (b) the Takeback Exit Term Loans (as defined   below) on the terms and conditions set forth in the Takeback Exit Term Loan   Facility Term Sheet; and (c) accrued but unpaid interest due under the Credit   Agreement. The New Common Stock of Reorganized Monitronics will not be listed   on the NYSE, NASDAQ or any other stock exchange; provided that the New Common   Stock may (subject to satisfaction of the applicable requirements for being   admitted to such market) be admitted for trading and quoted on any markets   operated by OTC Markets Group Inc. Other Definitive Documents governing the   Restructuring will be consistent in all respects with the material terms set   forth in the Restructuring Support Agreement (including all exhibits thereto   and Section 3.02 thereof). Use of Cash Collateral Prior to the Petition Date,   the Company Parties shall negotiate a cash collateral agreement with the   First Lien Agent (which may be part of the Interim DIP Order (as defined   below)) that shall be reasonably acceptable to the Required Consenting Term   Lenders and the Required Consenting Noteholders, and that shall include terms   and conditions related to customary adequate protection to be provided to the   First Lien Term Lenders consistent with the terms and conditions of the Credit   Agreement and related Loan Documents (as defined in the Credit Agreement)   including, without limitation, replacement liens, fees (including the   professional fees for the Ad Hoc Lender Group), interest (which interest, if   owed to the First Lien Term Lenders, shall be calculated as if there were no   default under the Credit Agreement and at the non-default rate, subject to   the Consenting Term Lenders’ rights to seek interest on modified terms upon   termination of the Agreement Effective Period),2 reporting and milestones.   DIP Facility The “Lenders” (as defined in the DIP/Exit Facility Commitment)   (the “DIP Lenders”) will provide senior secured postpetition financing   facilities in an aggregate principal 

    

 

3 For the   avoidance of doubt, upon termination of the Agreement Effective Period (other   than due to the Plan going effective), the rights of the First Lien Term   Lenders to seek interest on modified terms (including, without limitation,   interest at the default rate) and the rights of all other Parties to object   to any such requests are expressly reserved. 6 amount of $245 million (the   “DIP Facility” and the loans thereunder, the “DIP Loans”) secured by first   priority priming security interests and liens on all properties and assets,   whether tangible, intangible, real, or personal, of each Company Party,   regardless of whether such properties and assets are subject to valid,   perfected, and non-avoidable liens in favor of the First Lien Agent, the   First Lien Revolving Lenders, and the First Lien Term Lenders; provided,   however, that such security interests and liens will be junior, and not   priming, as to (i) a customary carve-out with respect to estate professional   and other fees and (ii) customary “permitted liens” arising under applicable   law with priority over the First Lien Agent’s prepetition liens and security   interests; provided, further that the DIP Facility shall be on terms and   conditions that are consistent in all material respects with the DIP/Exit   Facility Commitment and the DIP Documents and otherwise reasonably acceptable   to the Required Consenting Term Lenders and the Required Consenting   Noteholders. On the Petition Date, the Company Parties shall seek, and the   Consenting Creditors and Ascent shall support, entry of interim (the “Interim   DIP Order”) and final orders (the “Final DIP Order,” and, together with the   Interim DIP Order, the “DIP Orders”) authorizing the Company Parties to enter   into the DIP Facility under the Bankruptcy Code, each of which shall be   reasonably acceptable to the Company Parties, the DIP Lenders, the Required   Consenting Term Lenders, and the Required Consenting Noteholders, and which   shall include terms and conditions related to customary adequate protection   to be provided to the First Lien Term Lenders, including replacement liens,   fees, interest (which interest, if owed to the First Lien Term Lenders, shall   be calculated as if there were no default under the Credit Agreement and at   the non-default rate, subject to the Consenting Term Lenders’ rights to seek interest   on modified terms upon termination of the Agreement Effective Period),3   reporting and milestones. Proceeds of the DIP Facility shall be used to:   (i)provide for the ongoing working capital and capital expenditure needs of   the Company Parties during the 

    

 

7 pendency of   the Chapter 11 Cases; (ii) fund the costs of the administration of the   Chapter 11 Cases; and (iii) repay in full all Claims on account of the   Revolving Credit Loans. On the Plan Effective Date, each DIP Lender shall receive   payment in accordance with the terms and conditions of the DIP/Exit Facility   Commitment. First Lien Revolving Lender Claims On the Plan Effective Date,   each First Lien Revolving Lender shall have received payment in full in cash   from the proceeds of the DIP Facility. First Lien Term Lender Claims On the   Plan Effective Date, each First Lien Term Lender shall receive, on account of   its Claims arising under the Credit Agreement, its pro rata share of: (i)$150   million in cash from (a) the proceeds of the Rights Offering and (b)(1) the   Net Cash Amount (as defined in the Restructuring Support Agreement) and, if   applicable, the Net Cash Shortfall Amount, or (2) the Ascent Default Amount,   as applicable, for application to the outstanding Term Loans (except that no   Equity Commitment Party shall receive any such cash on account of Contributed   Term Loans) (such payments collectively, the “Effective Date Pay Down”); and   (ii) the Takeback Exit Term Loans contemplated under the Takeback Exit Term   Loan Facility, consistent with the terms and conditions set forth in the   Takeback Exit Term LoanFacility Term Sheet (except that no Equity Commitment   Party shall receive any such Takeback Exit Term Loan on account of   Contributed Term Loans). On the Plan Effective Date, an aggregate principal   amount of $100 million of the Term Loans held by the Equity Commitment   Parties will be exchanged for New Common Stock as part of the Equity   Commitments pursuant to the terms of the Put Option Agreement. The principal   amount of all Term Loans (including Contributed Term Loans) shall continue to   accrue interest through the Plan Effective Date, and all accrued but unpaid   interest shall be paid in cash in full on the Plan Effective Date. 

    

 

8 Noteholder   Claims On the Plan Effective Date, in exchange for the full cancellation of   the Notes, each Noteholder will receive on account of its Notes Claim:   (i)cash in an amount equal to 2.5% of the principal and accrued but unpaid   interest due under the Notes held by such Noteholder (the “Cash Payout”); or   (ii) solely to the extent that such Noteholder elects, on a timely and   validly submitted election form, to receive Notes Shares (as defined below)   in lieu of the Cash Payout by affirmatively opting out of the Cash Payout   (such election, the “Cash Opt Out Election,” and any such holder, a “Cash Opt   Out Noteholder”), (1) its pro rata share of 18.0% of the total shares of New   Common Stock to be issued and outstanding as of the Plan Effective Date,   subject to dilution by the Post-Emergence Incentive Plan (as defined below)   (such shares, the “Notes Shares”), plus (2) Rights to acquire New Common   Stock to be issued in the Rights Offering. Notwithstanding anything herein to   the contrary (including the preceding clause (ii)), each Consenting   Noteholder (a) shall receive its pro rata share of the Notes Shares, (b)   shall not receive cash on account of its Notes Claims, and (c) shall   affirmatively exercise the Cash Opt Out Election and be a Cash Opt Out   Noteholder. Exit Financing On the Plan Effective Date, the Company Parties   and/or the reorganized Company Parties, as applicable, shall have entered   into the following credit facilities: (i) revolving credit and term   facilities with the Agent (as defined in the DIP/Exit Facility Commitment)   and the New Exit Facility Lenders on the terms and conditions set forth in   the DIP/Exit Facility Commitment and the New Exit Facilities Documents (the   “New Exit Facilities”) and (ii) a term loan facility with the Administrative   Agent (as defined in the Takeback Exit Term Loan Facility Term Sheet) and the   Takeback Exit Term Loan Facility Lenders in an aggregate dollar amount of   $822.5 million (the “Takeback Exit Term Loan Facility” and the loans   thereunder, the “Takeback Exit Term Loans”), the terms and conditions of   which shall be set forth in the Takeback Exit Term Loan Facility Term Sheet   and the Takeback Exit Term Loan Facility Documents, in each case of (i) and   (ii), acceptable to the Company Parties, the Required Consenting Term   Lenders, and the Required Consenting Noteholders (such 

    

 

4 This assumes   that the Net Cash Amount at the time of the Merger is $23 million.The Ascent   Share Distribution will be adjusted to reflect the actual Net Cash Amount at   the time of the Merger. The Ascent Share Distribution at the time of the   Merger will be calculated as follows: the quotient of the Net Cash Amount   divided by $395,111,570. 5 This amount will be adjusted based on the Ascent   Share Distribution at the time of the Merger. This amount will be calculated   as follows: 100% less 18% less the Ascent Share Distribution. 9 acceptance   not to be unreasonably withheld). For the avoidance of doubt, Reorganized   Monitronics shall be the borrower and obligor under the New Exit Facilities   and the Takeback Exit Term Loan Facility, and all guarantors under the Credit   Agreement shall be guarantors of the New Exit Facilities and the Takeback   Exit Term Loan Facility. Merger Ascent shall file, or shall cause Monitronics   to file, with the SEC a Form S-4 or a preliminary proxy statement, as may be   the case, for the purpose of obtaining stockholder consent for the proposed   Merger within five (5) Business Days following the Agreement Effective Date.   Solely to the extent that the Non-Ascent Restructuring Toggle has not   occurred, on the Plan Effective Date: (i)(a) Through the Merger, Ascent’s   Series B common stock will be effectively converted into Series A common   stock of Ascent; (b) the Merger shall be consummated; (c) as a result of the   Merger, all assets of Ascent (including the Ascent Cash Amount (as defined in   the Restructuring Support Agreement)) shall become assets of Reorganized   Monitronics; and (d) holders of Ascent’s common stock (including equity   compensation award holders whose awards are accelerated and settled in such   common stock) shall receive approximately 5.82% of the total shares of New   Common Stock to be issued and outstanding as of the Plan Effective Date,   subject to dilution by the Post-Emergence Incentive Plan (the “Ascent Share   Distribution”),4 with such shares to be allocated pro rata among such holders   of outstanding shares of common stock of Ascent pursuant to the Form S-4 or   proxy materials, as may be the case, related to the Merger; (ii) additional   shares of New Common Stock, representing 76.4%5 of the total shares of New   Common Stock to be issued and outstanding as of the Plan Effective Date, 

    

 

10 subject to   dilution by the Post-Emergence Incentive Plan, shall be distributed pursuant   to the Plan, the Rights Offering, the Equity Commitments, and the Put Option   Agreement. In the event that the Non-Ascent Restructuring Toggle has   occurred, then: (i)the Parties shall pursue the Restructuring without the   inclusion of the Merger; (ii)the Company Parties shall consummate the   Restructuring without Ascent’s participation and the Merger shall not be   consummated; (iii) the Backstop Commitment Parties shall satisfy their   BackstopCommitments (as defined in the Rights Offering and Equity Commitment   Term Sheet) to purchase the Backstop Commitment Shares (as defined in the   Rights Offering and Equity Commitment Term Sheet) on the terms and conditions   set forth in the Rights Offering and Equity Commitment Term Sheet and the Put   Option Agreement; (iv) Ascent shall make the Toggle Contribution (as defined   in the Restructuring Support Agreement), subject to the receipt of the   release contemplated hereunder; (v)the holders of Ascent’s common stock will   not receive the Ascent Share Distribution; (vi) 100% of the New Common Stock   to be issued and outstanding as of the Plan Effective Date, subject to   dilution by the Post-Emergence Incentive Plan, shall be distributed to   creditors of Monitronics pursuant to the Plan, the Rights Offering, the   Equity Commitments and the Put Option Agreement; and (vii) the Company   Parties and the Consenting Creditors will negotiate in good faith to make   appropriate modifications tothe Definitive Documents to effectuate the   Restructuring contemplated herein without the inclusion of the Merger. 

    

 

11 Treatment of   Other Claims and Interests Administrative, Priority and Tax Claims On or as   soon as practicable after the latest to occur of the Plan Effective Date, the   date such claim becomes allowed, and the date such claim becomes due in the   ordinary course of business, each holder of an allowed administrative,   priority or priority tax claim will, with the reasonable consent of the   Company Parties, the Required Consenting Noteholders, and the Required   Consenting Term Lenders, either be satisfied in full, in cash, or otherwise   receive treatment consistent with the provisions of section 1129(a)(9) of the   Bankruptcy Code. Other Secured Claims Except to the extent that a holder of   an allowed Other Secured Claim agrees to less favorable treatment, in   exchange for the full and final satisfaction, settlement, release, and   discharge of (including any liens related thereto) each allowed Other Secured   Claim (other than claims under the Credit Agreement), each holder of an   allowed Other Secured Claim shall, at the option of the Company Parties, with   the reasonable consent of the Company Parties, the Required Consenting Term   Lenders, and the Required Consenting Noteholders, shall receive (i) treatment   of such allowed Other Secured Claim in a manner that renders such claim   unimpaired in accordance with section 1124(2) of the Bankruptcy Code,   including reinstatement, (ii) payment full in cash in the ordinary course of   business or (iii) the collateral securing such allowed Other Secured Claim.   General Unsecured Claims Except to the extent that a holder agrees to less   favorable treatment, in full and final satisfaction, settlement, release, and   discharge of and in exchange for each allowed general unsecured claim, each   holder of an allowed general unsecured claim shall receive payment in full in   cash on account of their allowed Claims or such other treatment as would   render such Claim unimpaired. Holders of such unsecured claims will not be   required to file any proof of claim in the Chapter 11 Cases. Intercompany   Claims Intercompany claims among the Company Parties shall either be (a)   reinstated as of the Plan Effective Date or (b) cancelled, in which case, no   distribution shall be made on account of such Claim. Intercompany Interests   Equity interests in any Company Party held by another Company Party will   remain effective and outstanding on the 

    

 

12 Plan   Effective Date. Equity Securities Subject to the “Existing Compensation   Arrangements” section of this Restructuring Term Sheet, all equity securities   issued by Monitronics before the Plan Effective Date will be cancelled and   extinguished as of the Plan Effective Date. Voting Rights The First Lien Term   Lenders and the Noteholders will be the only holders of claims or interests   entitled to vote to accept or reject the Plan. All other holders of claims or   interests will be deemed to accept or reject the Plan in accordance with   section 1126 of the Bankruptcy Code. Other Plan Terms Executory Contracts   & Unexpired Leases Unless otherwise set forth herein, the Plan will   provide for the Company Parties to assume all executory contracts and   unexpired leases to which they are party, with any applicable undisputed cure   costs to be paid on or as soon as reasonably practicable after the Plan   Effective Date. The Plan will further provide for a mechanism to resolve   disputed cure claims. Post-Emergence Incentive Plan The Plan will provide   that, as of the Plan Effective Date, Reorganized Monitronics will be deemed   to have adopted a management equity incentive program (the “Post-Emergence   Incentive Plan”), under which at least 7.5% and up to 10% of the New Common   Stock on a fully diluted basis (after giving effect to the awards to be   issued under the Post-Emergence Incentive Plan) shall be reserved for awards   to be granted to certain officers, board members, and other members of   management of Reorganized Monitronics under the Post-Emergence Incentive   Plan. Additional details regarding the Post-Emergence Incentive Plan will be   determined by the New Board (as defined below). Board of Directors The new   Board of Directors of Reorganized Monitronics after the Plan Effective Date   (the “New Board”) shall be made up of 7 directors, as set forth in the   Governance Term Sheet attached as Exhibit 1 hereto (the “Governance Term   Sheet”). 

    

 

6 “Related   Persons” means, with respect to a Person, each of that Person’s current and   former Affiliates, and each of such Person’s and Affiliates’ current and   former directors, officers, managers, managing members, principals, partners,   members, employees, agents, financial advisors, attorneys, accountants,   investment bankers, consultants, representatives, other professionals,   managed accounts, and managed funds, each in their capacity as such. 13   Corporate Governance Corporate governance for Reorganized Monitronics,   including charters, bylaws, articles of incorporation, operating agreements   or similar documents, or other organization or formation documents, as   applicable, shall be materially consistent with the Governance Term Sheet   attached hereto as Exhibit 1 and section 1123(a)(6) of the Bankruptcy Code   and otherwise acceptable to the Company Parties, the Required Consenting   Noteholders, and the Commitment Parties and in consultation with the Required   Consenting Term Lenders. Releases and Exculpation Ascent, the Company   Parties, the Consenting Noteholders, the Consenting Term Lenders, the   Commitment Parties, the DIP Agent, the DIP Lenders, and the Related Persons6   of each of the foregoing will provide all other parties customary mutual and   reciprocal releases and exculpation, in each case, to the fullest extent   permitted by law, and such releases and exculpation will also be documented   and granted in the Plan and the Bankruptcy Court’s order confirming the Plan   (the “Confirmation Order”); provided, however, that, after the occurrence of   the Non-Ascent Restructuring Toggle, the foregoing releases and exculpation   will only be provided to Ascent and its Related Persons (other than the   Company Parties and their respective Related Persons) if the Toggle Contribution   has been made by Ascent. The Plan and the Confirmation Order will also   provide for such releases and exculpation to be provided to such parties by   all consenting holders of claims against and interests in the Company Parties   and parallel injunctive provisions, to the fullest extent approved by the   Bankruptcy Court and permitted by law. Indemnification Prior to the Petition   Date, Ascent and/or the applicable Company Parties will purchase runoff   endorsements to their respective existing directors’ and officers’ liability   insurance policies (collectively, “D&O Liability Insurance Policies”),   extending coverage, including costs and expenses (including reasonable and   necessary attorneys’ fees and experts’ fees) for current or former directors,   managers, and officers of the Company Parties for a six-year period after the   Plan Effective Date for covered liabilities, including sums which any such 

    

 

14 party   becomes legally obligated to pay as a result of judgments, fines, losses,   claims, damages, settlements or liabilities arising from activities occurring   prior to the Plan Effective Date (collectively, “Runoff Endorsements”).   Ascent and/or the applicable Company Parties will purchase new D&O   Liability Insurance Policies for directors, managers, and officers of   Reorganized Monitronics from and after the Plan Effective Date on terms and   conditions acceptable to Ascent, the Company Parties, the Required Consenting   Noteholders, and the Commitment Parties. Under the Plan, the applicable   Company Parties shall assume pursuant to section 365(a) of the Bankruptcy   Code, (a) the existing D&O Liability Insurance Policies with Runoff   Endorsements and (b) all of the existing indemnification provisions for   current or former directors, managers and officers of the Company Parties   (whether in by-laws, certificate of formation or incorporation, board   resolutions, employment contracts, or otherwise), such indemnification   provisions, the “Indemnification Obligations”. All claims arising from the   existing D&O Liability Insurance Policies with Runoff Endorsements and   such Indemnification Obligations shall be unaltered by the Restructuring.   Existing Compensation Arrangements Under the Plan (including in the event of   a Non-Ascent Restructuring Toggle in which the Merger is not consummated),   the applicable Company Parties shall assume, pursuant to section 365(a) of   the Bankruptcy Code (or Ascent shall assign to Reorganized Monitronics, as   applicable), (a) all existing Compensation Arrangements (as defined in the   Restructuring Support Agreement) other than (i) that certain Amended and   Restated Employment Agreement by and between Ascent and William Niles dated   February 1, 2019 (which shall remain an obligation of Ascent) or (ii) as   terminated, cancelled, or settled as provided below); provided, however, that   Monitronics will take all actions necessary to provide that the Monitronics   phantom units will not accelerate and become vested solely due to the   consummation of the Merger or the occurrence of a Non-Ascent Restructuring   Toggle, and (b) such additional Compensation Arrangements for the   restructuring transitional period and for calendar year 2019 and beyond as   may be adopted by the Company Parties with the consent of the Required   Consenting Noteholders and the Commitment Parties in their sole discretion   (clauses (a) and (b) together, the “Designated Compensation Arrangements”),   which may be set forth in the Plan 

    

 

7 Such units   are held under two separate awards: the 2017 grant covering 36,231 RSUs and the   2018 grant covering 135,870 RSUs. 8 Such units are held between two separate   awards, each covering 25,000 RSUs and granted in 2018. 15 Supplement. Any   such Compensation Arrangements that are not Designated Compensation   Arrangements will not be assumed and will be rejected or otherwise   terminated. The consummation of the Merger shall constitute a Change in   Control of Ascent for purposes of the existing Compensation Arrangements as   it relates to double trigger provisions in any Compensation Arrangement that   is an employment agreement with Ascent, or an equity or equity-based   compensation plan of Monitronics. For the avoidance of doubt, notwithstanding   anything to the contrary set forth in this Restructuring Term Sheet or the   Restructuring Support Agreement: (i)In the event a Non-Ascent Restructuring   Toggle does not occur and the Merger is consummated: a. With respect to   awards granted by Ascent: 1.all equity-based compensatory awards held by   directors of Ascent will vest in full immediately prior to the Merger; 2.the   following performance restricted stock unit awards will terminate without   consideration: (1) 172,101 units held by Jeff Gardner; 7 (2) 108,969 units   held by William Fitzgerald; and (3) 50,000 units held by William Niles;8   3.the vesting of any other awards will be accelerated in full and settled by   Ascent in shares of Ascent common stock immediately prior to the Merger,   which awards include the following: (i) 59,443 RSUs held by Jeff Gardner;   (ii) 28,743 RSUs held by William Niles; (iii) 8,504 restricted shares held by   Fred Graffam and (iv) 8,026 RSUs or restricted 

    

 

9 The “Merger   Exchange Ratio” shall be calculated as follows: the quotient of (a)(i) the   Net Cash Amount divided by 395,111,570, multiplied by (ii) 22,500,000, divided   by (b) the total issued and outstanding shares of Ascent common stock   immediately prior to the consummation of the Merger. Each of the Parties   agrees that the number of outstanding shares of New Common Stock as of the   Plan Effective Date shall be 22,500,000. 16 shares held by certain   non-executive employees; and 4.all stock options will be cancelled for no   consideration. Ascent will obtain customary acknowledgements and releases   from affected participants with respect to settlement, cancellation, termination,   and/or vesting of such awards described above. b. With respect to awards   granted by Monitronics: 1.Monitronics phantom unit awards outstanding at the   time of the Merger will remain outstanding but will be adjusted by   Reorganized Monitronics to cover shares of New Common Stock based on the   Merger Exchange Ratio 9 rather than shares of Ascent common stock; 2.the   value paid for a vested phantom unit will be based on the value of New Common   Stock (rather than Ascent common stock); and 3.Reorganized Monitronics will   take all actions necessary to provide that the phantom units will not   accelerate and become vested solely due to the Merger. (ii)In the event that   a Non-Ascent Restructuring Toggle occurs and the Merger is not consummated:   a. With respect to awards granted by Ascent: 1.Sections (i)(a)(1)-(4) above   shall apply, except equity awards held by William Niles and any directors of   Ascent will remain outstanding and eligible to vest pursuant to their terms.   b. With respect to awards granted by Monitronics: 

    

 

17   1.Monitronics phantom unit awards will remain outstanding and Reorganized   Monitronics will make any changes necessary and permitted by the phantom unit   plan to equitably adjust the number of phantom units and/or class of   securities/value covered by the phantom units, and such other terms   reasonably necessary, to reflect the Non-Ascent Restructuring (as   applicable). Transition Services Agreement Prior to the Plan Effective Date,   the Company Parties and Ascent shall agree upon a form of Transition Services   Agreement (a “TSA”), to be entered into on the Plan Effective Date solely in   the event a Non-Ascent Restructuring Toggle occurs, in form and substance   acceptable to the Required Consenting Noteholders, the Commitment Parties,   the Company Parties, and Ascent and with a copy to be provided to counsel to   the Ad Hoc Lender Group. The term of the TSA shall not exceed twelve (12)   months. The TSA shall provide that (a) Ascent and the Reorganized Debtors   will each: (i) cooperate fully and in good faith in the transition of any   shared services between Ascent and the Company Parties and/or the Reorganized   Debtors, and (ii) use commercially reasonable efforts to ensure that all   permits, licenses, software, agreements, contracts, information, and other   items necessary to operate their respective businesses are transitioned and   operations are not disrupted and (b) Ascent will reimburse the Reorganized   Debtors for all services provided to Ascent during the period from the Plan   Effective Date through termination of the TSA (including, without limitation,   IT, accounting, and finance services) at rates to be negotiated at arms’   length between Ascent and the Company Parties and which shall be acceptable   to the Required Consenting Noteholders and the Commitment Parties. Information   Sharing Agreement The Company Parties and the Consenting Noteholders will   enter into a cooperation agreement (the “Information Sharing Agreement”), on   terms and conditions acceptable to the Company Parties and the Required   Consenting Noteholders and with a copy to be provided to counsel to the Ad   Hoc Lender Group, on or prior to the Petition Date, which Information Sharing   Agreement shall provide that the Company Parties will cooperate in good faith   to assist in the transition of the business during the period after the   effectiveness of the Information Sharing Agreement and prior to the Plan   Effective Date. 

    

 

18 Tax Matters   The tax structure of the Restructuring shall be structured to preserve or   otherwise maximize favorable tax attributes (including tax basis) of the   Company Parties to the extent practicable as determined by the Company   Parties, the Required Consenting Noteholders, and the Required Consenting   Term Lenders. Exemption from SEC Registration The Plan and Confirmation Order   shall provide that the issuance of any securities thereunder, including the   New Common Stock, will be exempt from securities laws pursuant to section   1145 of the Bankruptcy Code or another available exemption from registration   (or in the case of the Ascent Share Distribution registered under the   securities laws), and such New Common Stock shall be, following the Plan   Effective Date, freely transferable by the respective holders thereof to the   furthest extent permissible pursuant to section 1145 and applicable   securities law and regulations (or in the case of the Ascent Share   Distribution pursuant to the Form S-4). Conditions to the Plan Effective Date   It shall be a condition to the Plan Effective Date that the following   conditions precedent are satisfied or waived by the Company Parties, the   Consenting Creditors, and solely to the extent that the Non-Ascent   Restructuring Toggle has not occurred, Ascent, and the Plan Effective Date   shall occur on the date upon which the last of such conditions are so satisfied   and/or waived: (i)the Bankruptcy Court shall have entered the Confirmation   Order,in form and substance acceptable to the Consenting Creditors, and the   Confirmation Order shall not be stayed, modified, or vacated; (ii)the New   Exit Facilities under the New Exit Facilities Documents shall have closed,   contemporaneously with the Plan Effective Date; (iii) the Takeback Exit   Facility under the Takeback Exit Facility Documents shall have closed,   contemporaneously with the Plan Effective Date; (iv) the Company Parties   shall have received at least $177 million in value as contemplated in   connection with the Rights Offering and the Put Option Agreement; (v) the   Company Parties shall have received at least $100 million in value as   contemplated in connection with the Equity Commitment and the Put Option   Agreement; (vi) the Company Parties shall have received at least 

    

 

19 $23 million   in cash either from (a) Ascent in the form of the Net Cash Amount and, if   applicable, the Backstop Commitment Parties in the form of the Net Cash   Shortfall Amount, or (b) the Backstop Commitment Parties in the form of the   Ascent Default Amount; (vii) the Company Parties shall have paid or   reimbursed all reasonable and documented fees and out-of-pocket expenses of the   Ad Hoc Noteholder Group in full in cash in connection with the Restructuring,   including the reasonable and documented fees and expenses of their   counsel,local counsel, and existing financial and operational advisors;   (viii) the Company Parties shall have paid or reimbursed all reasonable and   documented fees and out-of-pocket expenses of the First Lien Term Lenders in   connection with the Restructuring, including the reasonable and documented   fees and expenses of their counsel and existing financial advisors; (ix) each   document or agreement constituting the Definitive Documents shall be in form   and substance consistent with this Restructuring Term Sheet and the   Restructuring Support Agreement; (x)all governmental approvals and consents   that are legally required for the consummation of the Restructuring shall   have been obtained, not be subject to unfulfilled conditions and be in full   force and effect; and (xi) such other conditions to the Plan Effective Date   as are customary. 

    

 

EXHIBIT 1 Governance   Term Sheet 

    

 

REORGANIZED   MONITRONICS GOVERNANCE TERM SHEET,1 This term sheet (this “Governance Term   Sheet”) summarizes certain material terms in respect of the corporate   governance of Reorganized Monitronics (as used herein, the “Company”) to be   reflected in the New Governance Documents (as defined below) as of the Plan   Effective Date, and is not an exhaustive list of all terms that will apply in   respect of the corporate governance of the Company. Without limiting the   generality of the foregoing, this Governance Term Sheet and the terms and   undertakings set forth herein are subject in all respects to the negotiation,   execution and delivery (as applicable) of definitive documentation. Corporate   Structure: The Company shall be a Delaware corporation, and the surviving corporation   in a reincorporation merger between Monitronics and a newly formed Delaware   corporation (which reincorporation merger will constitute part of the   Restructuring and be consummated on the Plan Effective Date). Governance   Documents: On the Plan Effective Date, pursuant to the Plan, (a) the   certificate of incorporation of the Company will be amended and restated in   substantially the form to be filed as part of the Plan Supplement (the “New   Charter”), (b) the bylaws of the Company will be amended and restated in   substantially the form to be filed as part of the Plan Supplement (the “New   Bylaws”), and (c) the Company and the other parties thereto will enter into a   registration rights agreement, as more fully described below, in   substantially the form to be filed as part of the Plan Supplement (the   “Registration Rights Agreement”). The New Charter, the New Bylaws, and the   Registration Rights Agreement (collectively, the “New Governance Documents”)   will collectively reflect, without limitation, the terms set forth in this   Governance Term Sheet. New Common Stock: The New Charter shall provide for a   single class of common stock (i.e., the New Common Stock), which shall be   voting stock entitled to one vote per share, The shares of New Common Stock   issued in the Restructuring shall be issued through the facilities of The   Depository Trust Company (DTC). The New Common Stock shall not be listed on   the New York Stock Exchange (“NYSE”), NASDAQ or any other stock exchange,   provided that the New Common Stock may (subject to satisfaction of the   applicable requirements for being admitted to such market) be admitted for   trading and quoted on any markets operated by OTC Markets Group Inc.. It is   contemplated that the New Common Stock will be registered under Section 12(g)   of the Securities Exchange Act of 1934, as amended. The New Charter shall   prohibit the issuance of non-voting equity securities, to the extent required   pursuant to Section 1123(a)(6). 1 Capitalized terms used but not otherwise   defined herein shall have the meanings given to them in the Restructuring   Term Sheet to which this Governance Term Sheet is attached as Exhibit 1 (the   “Restructuring Term Sheet”), or the Restructuring Support Agreement (the   “RSA”) to which the Restructuring Term Sheet is attached as Exhibit A, as   applicable. 

    

 

Board of   Directors: The New Charter shall fix the size of the Board at seven (7)   directors (each, a “Director”), and shall provide for the Board to be divided   into three classes of Directors, designated as Class I, Class II and Class   III, respectively, with two Directors in each of Class I and Class II, and   three Directors in Class III. Each Director shall serve for a term ending on   the date of the third annual meeting following the annual meeting of   stockholders at which such Director was elected; provided, that Director   initially appointed to Class I shall serve for an initial expiring at the   Company’s first annual meeting following the each term Plan Effective Date   (which shall occur no earlier than the date that is 12 months after the Plan   Effective Date); each Director initially appointed to Class II shall serve   for an initial term expiring at the Company’s second annual meeting following   the Plan Effective Date; and each Director initially appointed to Class III   shall serve for an initial term expiring at the Company’s third annual   meeting following the Plan Effective Date; provided further, that the term of   each Director shall continue until the election and qualification of his or   her successor or, if applicable, such Director’s earlier death, resignation   or removal. On the Plan Effective Date, pursuant to the Plan, the Board will   be reconstituted to consist of the following Directors (the “Initial Board”),   and the name and Class of each such Director shall be disclosed in the Plan   Supplement: (a) three (3) Directors designated by holders of New Common Stock   that are funds or accounts that are managed or advised by, or that are   affiliates of, EQT Partners UK Advisors LLP (collectively, the “EQT   Stockholders”), which Directors shall be Class III Directors; provided,   however, that such designation right is subject to the EQT Stockholders’   being entitled to receive, as of the Plan Effective Date, at least 27.5% of   the total shares of New Common Stock to be issued as of the Plan Effective   Date (the “Total Effective Date Shares”), and shall become a right to   designate two (2) Class III Directors if the EQT Stockholders are entitled to   receive at least 17.5% (but less than 27.5%) of the Total Effective Date   Shares; (b) two (2) Directors designated by holders of New Common Stock that   are funds or accounts that are managed or advised by, or that are affiliates   of, Brigade Capital Management, LP (collectively, the “Brigade   Stockholders”), and one such Director shall be designated as a Class II   Director and the other shall be designated as a Class I Director; provided,   however, that such designation right is subject to the Brigade Stockholders’   being entitled to receive, as of the Plan Effective Date, at least 17.5% of   the Total Effective Date Shares; 2 

    

 

(c) the   individual serving, as of the Plan Effective Date, as the Chief Executive   Officer of the Company (the “CEO”), which Director shall be designated as a   Class I Director; and (d) the remaining Director shall be designated by the   Ad Hoc Noteholder Group and shall be designated as a Class II Director (the   “Ad Hoc Group Director”). Chairman of the Board: The initial Chairman of the   Board (the “Chairman”), as of the Plan Effective Date, shall be selected by   the EQT Stockholders and the Brigade Stockholders and shall be a Class III   Director; provided, however, that if the EQT Stockholders and the Brigade   Stockholders cannot reach agreement on the selection of the initial Chairman,   the initial Chairman shall be selected by the holders of a majority of the outstanding   shares of New Common Stock. Thereafter, the Chairman shall be elected   annually by a majority vote of the Board and, for so long EQT has a   Nomination Right with respect to 3 Directors, shall be elected from among the   Class III Directors. The Chairman must be a Director. Board Committees: The   Board may, by majority vote, establish one or more committees of the Board to   exercise the powers of the Board, subject to the limitations set forth in the   Delaware General Corporation Law (the “DGCL”). For so long as the EQT   Stockholders have a Nomination Right (as defined below) with respect to at   least two Director seats, they shall be entitled to proportionate   representation (through their Director nominees) on each committee of the   Board. For so long as the Brigade Stockholders have a Nomination Right with   respect to at least two Director seats, they shall be entitled to   proportionate representation (through their Director nominees) on each   committee of the Board. The New Charter shall designate the initial committees   of the Board, and the members of such committees shall be selected by the   Initial Board. Subsidiary Boards: The composition of the board of directors,   board of managers or other governing body of any wholly-owned subsidiary of   the Company (including any committee thereof) (each, a “Subsidiary Governing   Body”) shall be the same as that of the Board (or any committee of the   Board), except any wholly-owned subsidiary of the Company which is either (i)   a limited liability company that is managed by its members, (ii) a limited   partnership that is managed by its general partner, (iii) not organized under   the laws of the United States of America, any State thereof or the District   of Columbia or (iv) required by law or contract to have a different composition.   The EQT Stockholders (for so long as they have a Nomination Right) and the   Brigade Stockholders (for so long as they have a Nomination Right) shall be   entitled to proportional representation on any Subsidiary Governing Body.   Director Elections and Vacancies: At each annual meeting of the stockholders,   Directors of the Class to be elected at such annual meeting shall be elected   by a plurality vote of the holders of New Common Stock. If at any time a   Director (other than the CEO) resigns, is removed, dies or becomes   incapacitated, or if there is a 3 

    

 

vacancy on the   Board for any other reason, a replacement director shall be promptly elected   by a majority of the Directors then in office, to serve until the end of the   then-current term for such Director seat; provided, however, that if such   vacancy relates to a Director seat that is subject to a Nomination Right,   then the following shall be the exclusive means of filling any such vacancy   (a) the EQT Stockholders or the Brigade Stockholders, as applicable, shall   have the exclusive right to designate such replacement and the Board shall   not otherwise elect a replacement except with the prior written consent of   such stockholders, (b) the Company’s stockholders shall have the right to   fill such vacancy, by the written consent of the holders of a majority of the   outstanding shares of New Common Stock, but only if such consenting majority   includes the EQT Stockholders or the Brigade Stockholders, as applicable and   (c) the EQT Stockholders or the Brigade Stockholders, as applicable, shall   have the right to require that the Company convene a special stockholders   meeting as promptly as practicable to elect a replacement Director to fill   such vacancy, and the Company’s nominee for election to such Director seat at   such meeting shall be designated by the EQT Stockholders or the Brigade   Stockholders, as applicable. The Company’s stockholders shall have also the   right to fill any such vacancy (other than a vacancy that relates to a   Director seat that is subject to a Nomination Right), by a plurality vote of   the holders of New Common Stock at an annual or special meeting of the   stockholders or by written consent of the holders of a majority of the   outstanding shares of New Common Stock. Director Nominations: If the EQT   Stockholders, as of the Plan Effective Date, receive or are entitled to   receive at least 27.5% of the Total Effective Date Shares, then on the Plan   Effective Date the Company shall enter into a Nomination Agreement (as   defined below) with the EQT Stockholders (the “EQT Nomination Agreement”), in   form and substance reasonably acceptable to the Company Parties and the EQT   Stockholders, giving the EQT Stockholders a Nomination Right (i) with respect   to 3 Class III Director seats for so long as they hold at least 27.5% of the   total outstanding shares of New Common Stock, (ii) with respect to 2 Class   III Director seats for so long as they hold at least 17.5% (but less than   27.5%) of the total outstanding shares of New Common Stock and (iii) with respect   to 1 Class III Director seat for so long as they hold at least 10% (but less   than 17.5%) of the total outstanding shares of New Common Stock; provided,   however, that if the EQT Stockholders, as of the Plan Effective Date, receive   or are entitled to receive at least 17.5% (but less than 27.5%) of the Total   Effective Date Shares, then the EQT Nomination Agreement shall initially give   the EQT Stockholders a Nomination Right with respect to only 2 Class III   Directors. If the Brigade Stockholders, as of the Plan Effective Date,   receive or are entitled to receive at least 17.5% of the Total Effective Date   Shares, then on the Plan Effective Date the Company shall enter into a   Nomination Agreement with the Brigade Stockholders (the “Brigade Nomination   Agreement”), in form and substance reasonably acceptable to the Company   Parties and the Brigade Stockholders, giving the Brigade Stockholders a   Nomination Right (i) with respect to 2 Class II Director 4 

    

 

seats for so   long as they hold at least 17.5% (but less than 27.5%) of the total   outstanding shares of New Common Stock and (ii) with respect to 1 Class II   Director seat for so long as they hold at least 10% (but less than 17.5%) of   the total outstanding shares of New Common Stock. As used herein, “Nomination   Agreement” means an agreement between the Company on the one hand, and the   EQT Stockholders or the Brigade Stockholders, as applicable, on the other   hand, giving such stockholders the right (a “Nomination Right”), with respect   to one or more specified Director seats, to require that the Company   nominate, as the Company’s nominee for such Director seat at each stockholder   meeting where such Director seat is up for election, an individual designated   by such stockholders and (b) include such nominee in the Company’s proxy   materials and ballot with respect to such stockholder meeting. In connection   with exercising its Nomination Rights, the EQT Stockholders or Brigade   Stockholders, as applicable, will be required to provide such information   regarding its nominee(s) as the Company may reasonably request for inclusion   in its proxy materials, but shall not otherwise be required to comply with   the procedures set forth in the New Bylaws with respect to Director nominations   by stockholders generally. Notwithstanding anything contained in this   Governance Term Sheet, the Nomination Agreements, the New Charter and/or the   New Bylaws shall include such provisions as may be reasonably requested by   the EQT Stockholders and/or the Brigade Stockholders to help ensure that, if   for any reason a vacancy occurs with respect to a Director seat that is   subject to a Nomination Right, then the EQT Stockholders or the Brigade   Stockholders, as applicable, will have the right to designate the individual   who is elected or appointed to the Board to fill such vacancy. Board   Observer: Each Commitment Party that, as of the Plan Effective Date, receives   or is entitled to receive at least 17.5% of the Total Effective Date Shares   shall have, for so long as it continues to hold at least 10% of the total   outstanding shares of New Common Stock, the right to appoint a non-voting   observer to the Board, pursuant to an agreement (in form and substance   reasonably acceptable to such parties) to be entered into between the Company   and each such Commitment Party. Removal of Directors: Any Director may be   removed from the Board (and as a member of any committee of the Board or any   Subsidiary Governing Body, as applicable) at any time, with or without cause,   by stockholders holding, in the aggregate, a majority of the outstanding   shares of New Common Stock, either by written consent or by the affirmative   vote of such stockholders at a duly convened stockholder meeting (“Majority   Stockholder Approval”); provided, however, that until the Company’s second   annual meeting following the Plan Effective Date (a) the Ad Hoc Group   Director shall not be subject to such removal without cause, (b) none of the   Class III Directors shall (except with the prior written consent of the EQT   Stockholders) be subject to such removal without cause, and (c) none of the   Directors designated or nominated by the Brigade Stockholders shall (except   with the prior written consent of the Brigade Stockholders) be subject to   such removal without cause. Any 5 

    

 

Director may,   in his or her sole discretion, resign from the Board at any time by giving   written notice of such resignation to the Chairman or to each of the other   Directors. In addition, if the individual serving as the CEO is also a   Director, he or she shall automatically be deemed to have resigned as a   Director (and as a member of any Board committees or subsidiary boards or   committees, as applicable) upon his or her ceasing to be the CEO for any   reason. Board Voting; Quorum: A quorum for meetings of the Board will require   the attendance of a majority of the Directors then in office. The vote of a   majority of the Directors then in office shall be the act of the Board,   unless an express provision of the DGCL or otherwise applicable law requires   a different vote, in which case such express provision shall govern and   control. In addition, the Board may take action by the unanimous written   consent of all Directors then in office. Board Meetings: The Board shall hold   regularly scheduled meetings at least once per calendar quarter. In addition,   the Chairman, the CEO or any two (2) Directors may call a special Board   meeting at any time. Any meeting of the Board (or of any Board Committee or   Subsidiary Governing Body) may be held in person or by conference call or   through the use of any other means of remote communication permitted by the   DGCL by which all Directors participating in the meeting can hear each other   at the same time (“Remote Communication”); provided, that for any such   meeting held in person, reasonable provision shall also be made to allow any   Directors who wish to do so to participate in such meeting by conference call   or other means of Remote Communication, and any Director participating   through such means of communication shall be deemed to be present in person   at such meeting. Board Compensation: Directors not employed by the Company or   any of its subsidiaries shall be entitled to receive market-rate compensation   (which may include future equity awards) from the Company, as determined by   the Board from time to time, subject to Majority Stockholder Approval;   provided, however, that the payment of compensation up to the amounts set   forth in the New Bylaws (as determined by the Ad Hoc Noteholder Group prior   to the Plan Effective Date) shall be deemed to have been approved by Majority   Stockholder Approval. All Directors will be reimbursed by the Company for   reasonable and documented expenses related to their service as a Director,   and will be entitled to customary indemnification/advancement and exculpation   provisions and directors’ and officers’ liability insurance coverage. Related   Party Transactions: The Company shall not (and shall not cause or permit any   of its subsidiaries to) enter into or consummate a Related Party Transaction   (as defined below) unless the Related Party Transaction shall have been   approved by a majority of the disinterested Directors then in office and,   with respect to any Related Party Transaction involving total payments or   value (as determined by the disinterested Directors) of more than $1,000,000   (a) such disinterested Directors shall have obtained, prior to such approval,   a fairness opinion with respect to such Related Party 6 

    

 

Transaction   from a nationally recognized investment banking or valuation firm or (b) the   Related Party Transaction shall have been expressly approved by a majority of   the disinterested stockholders. As used herein: “Company Party” means an of   the Company or any of its • subsidiaries. • “Related Party Transaction” means   any transaction or series of related transactions, or any agreement or   arrangement, between a Company Party, on the one hand, and a Related Party   (as defined below), on the other hand. • “Related Party” means: (i) a   Director, a member of a Subsidiary Governing Body, or an executive officer of   a Company Party (or a member of the immediate family of any such person);   (ii) any company or other entity (other than a Company Entity) of which a   person described in clause (i) is a partner, director or executive officer;   (iii) any person that beneficially owns, or otherwise controls (or shares   control of), at least 10% of the outstanding shares of New Common Stock or   the voting power with respect thereto, or that is an affiliate of any such person;   or (iv) any director or executive officer of a person described in clause   (iii) (or a member of the immediate family of any such director or executive   officer). Preemptive Rights: If at any time after the Plan Effective Date the   Company or any of its subsidiaries proposes to issue shares of New Common   Stock or other equity securities (including preferred equity), or any   options, warrants, rights or other securities that are convertible into, or   exchangeable or exercisable for, any shares of New Common Stock or other such   equity securities (any of the foregoing, “New Equity Securities”), each   stockholder that at the time of such offering is a Significant Stockholder   (as defined below) shall have the right to participate in such offering on a   pro rata basis, based on such stockholder’s pro rata share of the outstanding   shares of New Common Stock, subject to customary exceptions including for New   Equity Securities issued pursuant to the Plan, or as purchase price   consideration in acquisitions approved by the Board, or pursuant to the   Post-Emergence Incentive Plan or any other equity incentive plan approved by   the Board. “Significant Stockholder” means each holder of New Common Stock   that (together with its Affiliates) holds at least 10% of the outstanding shares   of New Common Stock at the time of the offering in question, and is an   “accredited investor” (as defined in Section 501 of Regulation D of the   Securities Act of 1933, as amended (the “Securities Act”)) or a “qualified   institutional buyer” (as defined in Rule 144A under the Securities Act).   Stockholder Meetings: Special meetings of the stockholders may be called by   the Board, by the Chairman or CEO, or by the Secretary of the Company at the   written request of one or more stockholders holding, in the aggregate, at   least 20% of the total outstanding shares of New Common Stock. 7 

    

 

The New Bylaws   shall include notice and other procedural requirements for any meetings of   the stockholders (e.g., place, date, hour, record date for determining   stockholders entitled to vote, means of remote communication, etc.),   including procedures for nominating Directors or submitting or voting on   stockholder proposals, that are typical and customary for public companies.   Stockholder Voting: The stockholders may take action at a duly convened   meeting of the stockholders at which a quorum is present. In addition, any   action that may be taken by stockholders at a meeting may also be taken by   written consent of the stockholders without a meeting. Any such action by   written consent shall require the consent of stockholders that own or hold   the same percentage of shares of New Common Stock that would be required to   take the same action at a stockholder meeting at which all then-issued and   outstanding shares of New Common Stock entitled to vote thereon were present   and voted. Information Rights: The New Governance Documents shall provide   that (a) for so long as Reorganized Monitronics is not registered under   Section 12(g) of the Exchange Act or otherwise required to file periodic   reports with the SEC, its stockholders shall have customary information   rights reasonably acceptable to the Required Consenting Noteholders   (including annual audited financial statements, quarterly financial   statements, and notice of events that would require a Form 8K filing if it   were a reporting company) and (b) Reorganized Monitronics shall hold   quarterly conference calls with stockholders (and reasonable prior notice and   dial-in information will be made available Company’s results of operations   and immediately preceding fiscal quarter to stockholders) to discuss the   financial performance for the and year-to-date, including a question and   answer session consistent with Ascent’s historical practice. Corporate   Opportunities: The New Charter will include a provision pursuant to which the   Company (a) acknowledges that Directors who are not employees of the Company   or any of its subsidiaries (“Non-Employee Directors”) may directly or   indirectly engage in the same or similar lines of business as the Company and   its subsidiaries and (b) renounces any interest, expectancy or right to   participate that the Company might otherwise have with respect to any   business opportunity that the Non-Employee Director becomes aware of and that   may be a corporate opportunity for the Company or any of its subsidiaries,   excluding any corporate opportunity expressly presented or offered to such   Non-Employee Director solely in his or her capacity as a Director (including   as a member of any committee of the Board or any Subsidiary Governing Body).   DGCL 203: The Company shall, pursuant to the New Charter, affirmatively opt   out of Section 203 of the DGCL. Registration Rights: On the Plan Effective   Date, the Company and each Eligible Holder (as defined below) that desires to   do so shall enter into the Registration Rights Agreement. The Registration   Rights Agreement shall be in form 8 

    

 

and substance   reasonably satisfactory to the Company and the Eligible Holders party   thereto, and shall, among other things, (a) require that the Company (i) file   with the Securities and Exchange Commission (the “SEC”), as promptly as   practicable after the Plan Effective Date (and in no event more than 45 days   thereafter), a “shelf” registration statement to register all the shares of   New Common Stock issued to such Eligible Holders as of the Plan Effective   Date (such shares, the “Registrable Securities”), (ii) use reasonable best   efforts to cause such registration statement (the “Shelf Registration   Statement”) to be declared effective by the SEC as promptly as practicable   after such filing and (iii) maintain the effectiveness of the Shelf   Registration Statement until all Registrable Securities have been sold   thereunder or have otherwise ceased to be Registrable Securities, (b) provide   Eligible Holders with customary rights to require underwritten take-downs of   Registrable Securities, (c) provide Eligible Holders with customary   “piggyback” and “demand” registration rights that can be exercised at any   time after the one year anniversary of the Plan Effective Date, but only to   the extent an effective Shelf Registration Statement is not available to sell   the Registrable Securities proposed to be sold pursuant thereto and (d)   include other customary provisions including, without limitation, with   respect to indemnification, contribution and payment of registration   expenses. As used herein, “Eligible Holder” means any holder of New Common   Stock that that (together with its Affiliates) receives or is entitled to   receive, as of the Plan Effective Date, at least 10.0% of Total Effective   Date Shares. 9 

    

 

EXHIBIT B   Rights Offering and Equity Commitment Term Sheet 

    

 

EXECUTION   VERSION RIGHTS OFFERING AND EQUITY COMMITMENT TERM SHEET1 1 Capitalized terms   used but not otherwise defined herein shall have the meanings given to them   in the Restructuring Support Agreement (the “RSA”) to which this Rights   Offering and Equity Commitment Term Sheet is attached as Exhibit B, or the   Restructuring Term Sheet attached to the RSA as Exhibit A, as applicable.   Term Description Rights Offering The Debtors shall conduct an offering (the   “Rights Offering”) of subscription rights (the “Rights”) to purchase, in the   aggregate, 44.80% of the total shares of New Common Stock to be issued and   outstanding as of the Plan Effective Date, subject to dilution by the   Post-Emergence Incentive Plan (the “Rights Offering Shares”), for an   aggregate purchase price of $177 million (the “Aggregate Rights Offering   Amount”), to all Cash Opt Out Noteholders (as defined in the Restructuring   Term Sheet). Cash Opt Out Noteholders who timely and validly elect to   participate in the Rights Offering by electing to exercise their Rights for   their corresponding share of the Rights Offering Shares at the Exercise Price   (as defined below) shall constitute the “Rights Offering Participants”.   Rights shall be issued in respect of all outstanding Notes but may only be   exercised by Cash Opt Out Noteholders. The Rights shall be issued to the Cash   Opt Out Noteholders at no charge. The Rights may be exercised at a price per   share (the “Exercise Price”) that reflects an approximately 16.13% discount to   Plan equity value, after giving effect to the Rights Offering. Rights   Offering Procedures The Rights Offering Procedures shall: 1.contemplate that   the Debtors will, subject to the prior entry of the Rights Offering Approval   Order, commence the Rights Offering within five (5) Business Days of the   Petition Date; 2.specify the deadline for exercising Rights as set forth in   the Rights Offering Procedures, which shall be the first business day that is   thirty (30) days after the commencement date of the Rights Offering, subject   to extension (the “Rights Offering Exercise Deadline”); 3.include a mechanism   whereby any Backstop Commitment Party that is also a First Lien Term Lender   will have the ability to exercise its Rights by (a) (x) exchanging an   aggregate principal amount of its Term Loans (excluding any Contributed Term   Loans (as defined below)) in an amount not to exceed its ratable portion of   the Effective Date Pay Down, on a dollar-for-dollar basis and (y) waiving   such amount of its ratable portion of the Effective Date Paydown, in lieu of   submitting cash to pay the Exercise Price for the shares it 

    

 

2 Term   Description elects to purchase pursuant to the exercise of its Rights, and   (b) paying cash for the remainder, if any, of such Exercise Price. All other   Rights Offering Participants (excluding the Backstop Commitment Parties) must   pay the full amount of their respective aggregate Exercise Price in cash;   4.require that each Rights Offering Participant certify in a   questionnairethat is included in the Rights Offering Solicitation Materials   (the “Questionnaire”) that it is either (a) an “accredited investor” (as   defined in Regulation D of the Securities Act), a non U.S. person (as defined   in Regulation S of the Securities Act) and not participating on behalf or on   account of a U.S. person, or a “qualified institutional buyer” (as defined in   Rule 144A of the Securities Act) (an “Accredited Noteholder”) or (b) not an   Accredited Noteholder (a “Non-Accredited Noteholder”); 5.provide for the exemptions   for the Rights Offering to the registration requirements of the Securities   Act to be based on Section 1145 of the Bankruptcy Code (“Section 1145”) and   Section 4(a)(2), Regulation D and/or Regulation S of the Securities Act (the   “Private Placement Exemption”) with respect to the issuance of Rights (and of   the Rights Offering Shares issuable pursuant to the exercise of such Rights)   based on an allocation mechanism that: •first, allocates Rights issued under   Section 1145 to Rights Offering Participants who are Non-Accredited   Noteholders, on a pro rata basis; and •second, allocates any remaining Rights   issued under Section 1145 to Rights Offering Participants that are Accredited   Noteholders on a pro rata basis and, to the extent necessary to preserve the   availability of Section 1145 pursuant to applicable SEC guidance, any   remaining Rights will be issued to such Accredited Noteholders under the   Private Placement Exemption; 6.provide that there will be no   over-subscription rights associated with the Rights Offering. Any Rights   Offering Shares that are not subscribed for and purchased by a Rights   Offering Participant (excluding the Backstop Commitment Parties) by the   Rights Offering Expiration Deadline (as defined below) (the “Unsubscribed   Shares”) will not be offered to other Rights Offering Participants but,   rather, will be purchased by the Backstop Commitment Parties, subject to the   terms and conditions set forth in the Put Option Agreement, in accordance   with their respective Backstop 

    

 

3 Term   Description Commitments (as defined below); 7.contemplate, consistent with   the “Funding of the Rights Offering and Equity Commitments” section hereof,   that the cash proceeds of the Rights Offering and, to the extent applicable,   the proceeds of the funding of the Backstop Commitments will be deposited   into an escrow account subject to a customary escrow agreement (or a   segregated bank account maintained by the subscription agent for the Rights   Offering, the “Subscription Agent”), with funds released consistent with this   Rights Offering and Equity Commitment Term Sheet as of the Plan Effective   Date; 8.include other terms, conditions and procedures as are customary for   similar rights offerings by a debtor in a chapter 11 bankruptcy or an   out-of-court restructuring where the shares to be issued in a rights offering   are to be issued through the facilities of The Depository Trust Company; and   9.provide that the Rights Offering will be conducted in accordance with the   RSA, the Restructuring Term Sheet, this Rights Offering and Equity Commitment   Term Sheet and the Put Option Agreement and shall otherwise be on terms and   conditions acceptable to the Company Parties, the Required Consenting   Noteholders, and the Backstop Commitment Parties, and reasonably acceptable   to the Required Consenting Term Lenders, including with respect to the form   and content of the Rights Offering Solicitation Materials (as defined below)   and the Put Option Agreement. For the avoidance of doubt, the Rights   Offering, in the full amount of the Aggregate Rights Offering Amount,   together with the Ascent Default Amount or Net Cash Shortfall Amount, will be   backstopped by the Backstop Commitment Parties in accordance with their   respective Backstop Commitments. Equity Commitments The Equity Commitment   Parties, severally and not jointly, agree to purchase 25.31% of the total   shares of New Common Stock to be issued and outstanding as of the Plan   Effective Date, subject to dilution by the Post-Emergence Incentive Plan (the   “Equity Commitment Shares”) for an aggregate purchase price of $100 million   (at a per-share purchase price equal to the Exercise Price), payable by   exchanging an aggregate principal amount of $100 million of Term Loans owned   or controlled by such Equity Commitment Parties (the “Contributed Term   Loans”) in accordance with the terms and conditions of the RSA, the   Restructuring Term Sheet, this Rights Offering and Equity 

    

 

4 Term   Description Commitment Term Sheet, and the Put Option Agreement. For purposes   of paying the purchase price for the Equity Commitment Shares, any   Contributed Term Loans shall be treated as equal to cash on a   dollar-for-dollar basis based on the aggregate principal amount of such   Contributed Term Loans (it being understood and agreed that (a) the principal   amount of all such Contributed Term Loans shall continue to accrue interest   through the Plan Effective Date in the same manner as the remaining Term   Loans and (b) all accrued and unpaid interest on such Contributed Term Loans   as of the Plan Effective Date shall be paid consistently with the remaining   Term Loans). The obligations of the Equity Commitment Parties with respect to   the Equity Commitments shall be conditioned on the consummation of the Rights   Offering. Funding of the Rights Offering and Equity Commitments By the date   and time that is the Rights Offering Exercise Deadline, the Rights Offering   Participants (other than the Backstop Commitment Parties and the Equity   Commitment Parties) will be required to fund into escrow with the Debtors (or   a segregated account maintained by the Subscription Agent) cash in an amount   equal to the aggregate Exercise Price for Rights exercised by such Rights Offering   Participants. The Backstop Commitment Parties will be required to fund into   escrow with the Debtors (or a segregated account maintained by the   Subscription Agent) their respective obligations with respect to the Rights   Offering (including pursuant to the Backstop Commitments) on the date that is   three (3) Business Days prior to the Plan Effective Date; and the Equity   Commitment Parties will not be required to fund their respective obligations   with respect to the Equity Commitments until the Plan Effective Date, but may   be required to deliver into escrow with the Debtors, by the date that is one   (1) Business Day prior to the Plan Effective Date, the instrument providing   for the exchange of their Contributed Term Loans. For the avoidance of doubt,   the Commitment Parties will be required to fund, or contribute (as   applicable), in the aggregate, on the terms and conditions set forth in the   Put Option Agreement, the Backstop Commitments and/or the Equity Commitments   (as applicable). Notwithstanding anything contained in this Rights Offering   and Equity Commitment Term Sheet, the RSA or the Restructuring Term Sheet,   the obligations of the Commitment Parties with respect to the Backstop   Commitments, the Equity Commitments and the Rights Offering shall in all respects   be subject to the negotiation, completion, execution and delivery by the   Commitment Parties and 

    

 

5 Term   Description the other parties thereto of a definitive Put Option Agreement   acceptable to the Commitment Parties. Use of Proceeds The proceeds of the   Rights Offering and the Equity Commitments, together with either (i) the Net   Cash Amount and, if applicable, the Net Cash Shortfall Amount, or (ii) the   Ascent Default Amount, as applicable, shall, on the Plan Effective Date, be   used to: (a) pay down, in cash, $50 million of the revolving credit portion   of the DIP Facility, (b) pay down, in cash, $150 million of the Term Loan   (excluding the Contributed Term Loans), and (c) equitize $100 million of the   Contributed Term Loans. New Common Stock Allocation On the Plan Effective   Date, after giving effect to the consummation of the Rights Offering, the   Backstop Commitments, the Equity Commitments and the other transactions   contemplated by the Plan: (a) the Cash Opt Out Noteholders, collectively,   shall receive the Notes Shares on account of their Notes Claims; (b) solely   to the extent that the Non-Ascent Restructuring Toggle has not occurred and   the Merger is in fact consummated, the holders of Ascent’s common stock shall   receive the Ascent Share Distribution; (c) the Equity Commitment Parties   shall receive the Equity Commitment Shares on account of the purchase of New   Common Stock pursuant to the Equity Commitments (in accordance with the   schedules annexed to the Put Option Agreement); (d) the Rights Offering   Participants shall receive Rights Offering Shares on account of their   participation in the Rights Offering; (e) the Commitment Parties shall   receive the Put Option Premium Shares on account of their Backstop   Commitments or Equity Commitments, as applicable; and (f) to the extent   applicable, the Backstop Commitment Parties shall receive (i) the   Unsubscribed Shares, if any, and (ii) the Ascent Default Shares or Net Cash   Shortfall Shares (each as defined below), if applicable, pursuant to the Backstop   Commitments (in accordance with their respective Backstop Commitment   Percentages). U.S. Federal Securities Law The issuance of the Notes Shares   shall be exempt from the registration requirements of U.S. federal securities   laws pursuant to 

    

 

6 Term   Description Exemptions and Registration Section 1145. The issuance of the   Rights and the issuance of the Rights Offering Shares upon the exercise   thereof shall be exempt from the registration requirements of the Securities   Act pursuant, in part, to Section 1145 and, in part, to the Private Placement   Exemption as contemplated above under “Rights Offering Procedures”. The   issuance of the Equity Commitment Shares, the Put Option Premium Shares and   the Backstop Commitment Shares (as defined below) shall be exempt from the   registration requirements of the securities laws pursuant to a Private   Placement Exemption. The issuance of the Ascent Share Distribution (if   applicable) shall be registered under the Securities Act pursuant to a Form   S-4 registration statement to be initially filed with the SEC within five (5)   Business Days following the Agreement Effective Date, by Monitronics. Certain   Definitions “Adjusted Commitment Percentage” means, with respect to any   Non-Defaulting Backstop Commitment Party (as defined below) that elects to   purchase Backstop Commitment Shares not purchased by Defaulting Backstop   Commitment Parties (as defined below), a fraction, expressed as a percentage,   the numerator of which is the Backstop Commitment of such Non-Defaulting   Backstop Commitment Party and the denominator of which is the aggregate   Backstop Commitments of all Non-Defaulting Backstop Commitment Parties that   elect to purchase Backstop Commitment Shares not purchased by Defaulting   Backstop Commitment Parties. “Backstop Commitment” means, with respect to any   Backstop Commitment Party, the right, on the terms and conditions set forth   herein and in the Put Option Agreement, of the Debtors to require such   Backstop Commitment Party to (i) purchase the Unsubscribed Shares (which, for   the avoidance of doubt, shall result in an aggregate purchase price for all   Rights Offering Shares equal to the Aggregate Rights Offering Amount), (ii)   solely in the event that the Non-Ascent Restructuring Toggle occurs, purchase   a number of shares equal to the quotient of $23,000,000 divided by the   Exercise Price (“Ascent Default Shares”) for an aggregate purchase price   equal to $23 million (the “Ascent Default Amount”) and (iii) solely in the   event that the Non-Ascent Restructuring Toggle shall not have occurred and   the Net Cash Amount is less than $23 million (but not less than $20 million),   purchase a number of shares equal to the quotient of (x) $23 million less the   Net Cash Amount (such amount, the “Net Cash Shortfall Amount”), divided by   (y) the Exercise Price (the “Net Cash Shortfall Shares”) for an 

    

 

7 Term   Description aggregate purchase price equal to the Net Cash Shortfall Amount,   in each case, in a proportion based on a percentage that shall be set forth   opposite the name of such Backstop Commitment Party on a schedule to be   annexed to the Put Option Agreement (the “Backstop Commitment Percentage”).   The aggregate Backstop Commitments shall total $200 million. The Backstop   Commitments of the Backstop Commitment Parties are several, not joint,   obligations of the Backstop Commitment Parties, such that no Backstop   Commitment Party shall be liable or otherwise responsible for the Backstop   Commitment of any other Backstop Commitment Party. Backstop Commitment   Parties shall not be entitled to transfer, directly or indirectly, all or any   portion of their Backstop Commitments other than (a) to any other Commitment   Party, (b) to any controlled Affiliate of a Commitment Party (other than a   portfolio company of such Commitment Party or any of its Affiliates or   Related Funds), (c) to any Related Fund of a Commitment Party or (d) with the   prior written consent of Monitronics and the Requisite Commitment Parties,   which consent shall not be unreasonably withheld, conditioned or delayed;   provided, however, that in the event of any such transfer, and for any such   transfer to be valid, the transferee will be required to execute and deliver   a joinder that has the effect of such transferee’s joining the Put Option   Agreement, in the form contemplated in the Put Option Agreement. “Backstop   Commitment Shares” means, collectively, the Unsubscribed Shares and, if   applicable, the Ascent Default Shares or the Net Cash Shortfall Shares.   “Equity Commitment” means, with respect to any Equity Commitment Party, the   right, on the terms and conditions set forth herein and in the Put Option   Agreement, of the Debtors to cause such Equity Commitment Party to purchase   the Equity Commitment Shares by exchanging the Contributed Term Loans, in a proportion   based on a percentage that shall be set forth opposite the name of such   Equity Commitment Party on a schedule to be annexed to the Put Option   Agreement. The aggregate Equity Commitments shall be $100 million. The Equity   Commitment obligations of the Equity Commitment Parties are several, not   joint, obligations of the Equity Commitment Parties, such that no Equity   Commitment Party shall be liable or otherwise responsible for the Equity   Commitment of any other Equity Commitment Party. Equity Commitment Parties   shall not be entitled to transfer, directly or indirectly, all or any portion   of their Equity Commitments other than (a) to an Affiliate or Related Fund of   the transferring Equity Commitment Party (other than a portfolio company of   the Equity Commitment 

    

 

8 Term   Description Party, its Affiliates or Related Funds), (b) to any other   Commitment Party, or (c) with the prior written consent of Monitronics and   the Requisite Commitment Parties, which consent shall not be unreasonably   withheld, conditioned or delayed; provided, however, that in the event of any   such transfer, and for any such transfer to be valid, the transferee will be   required to execute and deliver a joinder that has the effect of such   transferee’s joining the Put Option Agreement, in the form contemplated in   the Put Option Agreement. “Related Fund” means, with respect to any   Commitment Party, any fund, account or investment vehicle that is controlled   or managed by (a) such Commitment Party, (b) a controlled Affiliate of such   Commitment Party or (c) the same investment manager or advisor as such   Commitment Party or an Affiliate of such investment manager or advisor.   “Requisite Commitment Parties” means, as of any date of determination, (a)   Non-Defaulting Backstop Commitment Parties as of such date whose Backstop   Commitment Percentages constitute more than 50.0% of the Backstop Commitment   Percentages of all Non-Defaulting Backstop Commitment Parties as of such date   of determination and (b) Non-Defaulting Equity Commitment Parties as of such   date whose Equity Commitment Percentages constitute more than 50.0% of the   Equity Commitment Percentages of all Non-Defaulting Equity Commitment Parties   as of such date of determination. “Rights Offering Solicitation Materials”   means the offering document for the Rights Offering (which may be the   Disclosure Statement), the Rights Offering Procedures, together with the   subscription form, the Questionnaire and other documents to be provided to   Cash Opt Out Noteholders in connection with the Rights Offering. Backstop Commitment   Percentages The initial Backstop Commitment Percentages shall be as set forth   on Schedule 1 annexed hereto; provided, however, that if one or more Backstop   Commitment Parties acquires additional Notes on or before the date that is   seven (7) days after the Agreement Effective Date, the Requisite Commitment   Parties may, by written notice delivered to Monitronics and the other   Commitment Parties within ten (10) days after the Agreement Effective Date,   require that (a) the initial Backstop Commitment Percentages of such Backstop   Commitment Parties (each, an “Additional Backstop Note Party”) shall be   increased proportionally to reflect the net principal amount of the   additional Notes that it acquired (as compared to its Initial Backstop   Notes), and (b) the initial Backstop Commitment Percentages of the other   Backstop Commitment Parties shall be 

    

 

9 Term   Description correspondingly decreased pro rata as necessary to provide for   such increases to the Backstop Commitment Percentages of the Additional   Backstop Note Parties. Such Backstop Commitment Percentages, as adjusted (if   applicable), shall be set forth as the initial Backstop Commitment Schedule   to the Put Option Agreement (as the same may be updated or modified as   provided in the Put Option Agreement). For the avoidance of doubt, a Backstop   Commitment Party’s sale of all or any portion of its Initial Backstop Notes   during such seven (7)-day period shall not result in any decrease in such   Backstop Commitment Party’s initial Backstop Commitment Percentage. As used   herein, “Initial Backstop Notes” means, with respect to any Backstop   Commitment Party, the aggregate principal amount of Notes held by it on the   Agreement Effective Date. 

    

 

10 Term   Description Backstop Commitments Each of the Backstop Commitment Parties,   severally and not jointly, will be required to fully exercise (or cause to be   exercised) all of the Rights issued to it in the Rights Offering, on the   other terms and conditions set forth in this Rights Offering and Equity   Commitment Term Sheet, the Rights Offering Procedures, and the Put Option   Agreement. Upon exercise of the put option by Monitronics, each of the   Backstop Commitment Parties, severally and not jointly, will be required to   purchase its Backstop Commitment Percentage of the Unsubscribed Shares, at   the Exercise Price, on the other terms and conditions set forth in this   Rights Offering and Equity Commitment Term Sheet, and the Put Option   Agreement. Upon exercise of the put option by Monitronics, each of the   Backstop Commitment Parties, severally and not jointly, will be required to   purchase its Backstop Commitment Percentage of (i) Ascent Default Shares,   solely in the event of a Non-Ascent Restructuring Toggle, for an aggregate   purchase price equal to the Ascent Default Amount, or (ii) Net Cash Shortfall   Shares, solely in the event the Non-Ascent Restructuring Toggle has not   occurred, for an aggregate purchase price equal to the Net Cash Shortfall   Amount, in each case, on the terms and conditions set forth in this Rights   Offering and Equity Commitment Term Sheet, and the Put Option Agreement. In   the event that a Backstop Commitment Party defaults on its obligation to   purchase Backstop Commitment Shares (a “Defaulting Backstop Commitment   Party”), then each Backstop Commitment Party that is not a Defaulting   Backstop Commitment Party (each, a “Non-Defaulting Backstop Commitment   Party”) shall have the right, but not the obligation, to purchase, at the   Exercise Price and on the other terms set forth in this Rights Offering Term   Sheet, and the Put Option Agreement, its Adjusted Commitment Percentage of   such Backstop Commitment Shares. Debtors’ Representations and Warranties The   Put Option Agreement shall contain representations and warranties made by the   Debtors that are customary for transactions of this nature, including without   limitation a representation regarding no material adverse effect. Debtors’   Covenants The Put Option Agreement shall contain covenants to be performed or   complied with by the Debtors that are customary for transactions of this   nature, including, without limitation, covenants (i) to carry on their   business in the ordinary course and use commercially reasonable efforts to   preserve intact their current material business organizations and their   material relationships with customers, suppliers, licensors, licensees,   distributors and others having 

    

 

11 Term   Description business dealings with the Debtors, taking into account the   Restructuring, and (ii) not to enter into any transactions that are material   to the Debtors (including any transactions with Ascent), other than   transactions in the ordinary course of business that are consistent with   prior business practices or in accordance with the parameters set forth in the   Put Option Agreement, the RSA or the Plan. Conditions to Commitments The Put   Option Agreement shall provide that the Backstop Commitments of the Backstop   Commitment Parties and the Equity Commitments of the Equity Commitment   Parties are subject to the satisfaction or waiver of conditions that are   customary for transactions of this nature, including, without limitation,   that there has been no material adverse effect that is continuing.   Termination Rights The Put Option Agreement shall contain termination rights   of the Backstop Commitment Parties and the Equity Commitment Parties that are   customary for transactions of this nature and consistent with the termination   rights set forth in the RSA. Put Option Premium In consideration for granting   the Debtors the right to (i) sell and cause the Backstop Commitment Parties   to purchase the Backstop Commitment Shares in exchange for the Backstop   Commitment Parties’ funding their Backstop Commitments and (ii) sell and   cause the Equity Commitment Parties to purchase the Equity Commitment Shares   in exchange for the Equity Commitment Parties’ funding their Equity   Commitments, in each case pursuant to the terms and conditions of the Put   Option Agreement, the Debtors shall be required to issue to the Commitment   Parties a put option premium (the “Put Option Premium”), which Put Option   Premium shall be payable on the Plan Effective Date in the form of New Common   Stock at a discount to Plan value (but without any need for further payment   for such New Common Stock by the Commitment Parties), representing 6.07% of   the total shares of New Common Stock to be issued and outstanding as of the   Plan Effective Date, subject to dilution by the Post-Emergence Incentive Plan   (the “Put Option Premium Shares”). Upon entry of the Backstop Approval Order,   the Put Option Premium shall be deemed earned in full on the date on which   the Debtors duly execute and deliver to each of the Commitment Parties a   countersigned copy of the Put Option Agreement. The Put Option Premium: (a)   shall not be refundable under any circumstance or creditable against any fee   or other amount paid in connection with the Put Option Agreement (or the   transactions contemplated thereby) or otherwise; (b) shall be paid on the   Plan Effective Date to the Commitment Parties on a pro rata basis (based 

    

 

12 Term   Description on their respective Backstop Commitments and Equity Commitments)   in the form of the Put Option Premium Shares; and (c) shall be paid without   setoff or recoupment and shall not be subject to defense or offset on account   of any claim, defense or counterclaim. Registration Rights Each of the   Commitment Parties and each other Noteholder that receives, in the aggregate,   10% or more of the total shares of New Common Stock to be issued and   outstanding as of the Plan Effective Date, subject to dilution by the   Post-Emergence Incentive Plan (collectively, the “Registration Rights   Agreement Parties”), shall enter into a registration rights agreement, as of   the Plan Effective Date, with Reorganized Monitronics (the “Registration   Rights Agreement”) pursuant to which Reorganized Monitronics is required to   (a) file a shelf registration statement to register all shares held by the   Registration Rights Agreement Parties at emergence and (b) maintain the   effectiveness of the shelf registration statement until all the shares   registered thereunder are sold, with customary rights to require underwritten   take-downs. The Registration Rights Agreement shall be in form and substance   acceptable to the Commitment Parties that will be parties thereto. Court   Approval On the Petition Date, the Debtors shall file a motion, in form and   substance acceptable to the Commitment Parties and reasonably acceptable to   the Required Consenting Term Lenders, seeking approval of the Put Option   Agreement, the Rights Offering Procedures and any other Backstop Commitment   Documents (the “Backstop Approval Motion”). Upon or before entry of the   Confirmation Order, but in any event no later than forty-five (45) days after   the Petition Date, the Bankruptcy Court shall enter an order, in form and   substance acceptable to the Commitment Parties and reasonably acceptable to   the Required Consenting Term Lenders, approving the relief requested in the   Backstop Approval Motion on a final basis (the “Backstop Approval Order”),   which Backstop Approval Order shall be in accordance with the RSA and which,   for the avoidance of doubt, may be the same order as the Confirmation Order.   Commitment Party Professional Fees The Debtors will pay all fees and expenses   of Stroock & Stroock & Lavan LLP, Houlihan Lokey, Inc. and Mike R   Meyers LLC (collectively, the “Commitment Party Professionals”), as advisors   to the Commitment Parties, on a current basis, in accordance with the Put   Option Agreement and in accordance with any letter agreements entered into   between the Debtors and the Commitment 

    

 

13 Term   Description Party Professionals, including, without limitation, any   “success”, “transaction”, “deferred” or similar fees (such fees and expenses   collectively, the “Commitment Party Professional Fees”), in each case,   without the requirement for the filing of retention applications, fee   applications, or any other applications in the Chapter 11 Cases, and without   any requirement for further notice or Bankruptcy Court review or approval.   The Commitment Party Professional Fees shall constitute allowed   administrative expenses of the Debtors’ estates under sections 503(b) and 507   of the Bankruptcy Code pursuant to the Backstop Approval Order.   Indemnification The Put Option Agreement shall contain indemnification   provisions in favor of the Commitment Parties and their respective related   parties (in their capacities as such) that are customary for transactions of   this nature, including indemnification for (a) losses of the Commitment   Parties and their respective related parties (in their capacities as such)   arising out of or relating to the Rights Offering, the Backstop Commitments,   the Equity Commitments, the Put Option Agreement or the transactions   contemplated by any of the foregoing and (b) losses of the Commitment Parties   and their respective related parties arising out of or relating to any   breaches by the Debtors of representations, warranties and/or covenants set   forth in the Put Option Agreement; provided, however, that the foregoing   indemnity will not apply to: (i) losses, claims, damages, liabilities or   expenses to the extent that they result from a material breach by the   Commitment Parties of the Commitment Parties’ obligations under the Rights   Offering Term Sheet, or the Put Option Agreement, or any act by the   Commitment Parties of bad faith, gross negligence or willful misconduct, each   as determined by a final, non-appealable decision by a court of competent   jurisdiction; and (ii) any punitive, exemplary or special damages unless such   indemnified party is required to pay such damages to a third party, as   determined by a final, non-appealable decision by a court of competent   jurisdiction. 

    

 

Schedule 1   Initial Backstop Commitment Percentages [to be supplied] 

    

 

 

EXHIBIT C   DIP/Exit Facility Commitment 

    

 

EXECUTION   VERSION KKR CREDIT ADVISORS (US) LLC 555 California Street, 50th Floor San   Francisco, California 94104 PERSONAL AND CONFIDENTIAL May 20, 2019 Mr. Fred   Graffam Chief Financial Officer Monitronics International, Inc. 1990   Wittington Place Farmers Branch, Texas 75234 Commitment Letter Dear Mr.   Graffam: You have advised KKR Credit Advisors (US) LLC, on behalf of itself   and certain of its affiliates and its or their managed funds and accounts   (“KKR”, “us” or “we”) that we have been exclusively authorized by Monitronics   International, Inc. (the “Company” or “you”) to act as structuring advisor   (in such capacity, “Structuring Advisor”) and that KKR Capital Markets LLC   (“KCM”) has been exclusively authorized by the Company to act as sole lead   arranger and bookrunner in connection with the financing for, certain   transactions described herein, in each case on the terms and subject to the   conditions set forth in this letter and in the attached Annexes A and B   hereto (collectively, the “Commitment Letter”). On the basis of such terms   and conditions, we are hereby pleased to provide you with a commitment to   provide such financing. You have (i) advised KKR that the Company and each of   its subsidiaries (collectively, the “Companies”) intend to file petitions   commencing cases (the “Bankruptcy Cases”) under Chapter 11 of Title 11 of the   United States Bankruptcy Code (the “Bankruptcy Code”) in the United States   Bankruptcy Court for the Southern District of Texas (Houston Division) (the   “Bankruptcy Court”), and thereafter refinance their existing prepetition   revolving credit facility (the “Existing Prepetition Revolving Credit   Facility”) under that certain Amended and Restated Credit Agreement, dated as   of March 23, 2012 (as amended through the date hereof, the “Existing   Prepetition Credit Agreement”), among the Company, the guarantors party   thereto from time to time, the lenders party thereto from time to time and   Bank of America, N.A., as administrative agent, and (ii) requested that KKR   provide (A) credit facilities consisting of up to $245 million of commitments   under a debtor-in-possession revolving loan financing facility (the ”DIP   Revolving Credit Facility” or the “DIP Facilities”), which will be used (w)   to refinance the Existing Prepetition Revolving Credit Facility as described   above, (x) to pay related transaction fees and expenses, (y) for working   capital and general corporate purposes and (z) to fund Chapter 11 expenses,   and (B) in the event a plan of reorganization for the Companies (the “Plan of   Reorganization”) is confirmed under the Bankruptcy Code and upon Companies'   election, (1) an exit term loan credit facility (the “Exit Term Loan   Facility”) in an aggregate principal amount equal to $150 million and (2) an   exit revolving credit facility (the “Exit Revolving Credit Facility”), with   commitments in an aggregate principal amount equal to $145 million (the Exit   Revolving Facility, together with the Exit Term Loan Facility, the “Exit   Facilities” and 

    

 

Monitronics   International, Inc. May 20, 2019 Page 2 collectively with the DIP Facilities,   the “Credit Facilities”), in each case substantially on the terms and   conditions set forth in the Summary of Terms and Conditions of the Credit   Facilities attached hereto as Annex B (the “Term Sheet”). Each of KKR and KCM   understands that the Bankruptcy Code requires the entry of interim and final   orders by the Bankruptcy Court approving the DIP Facilities, such orders to   be in form and substance reasonably satisfactory to the Required Lenders and   the Company (the “DIP Orders”). KCM is pleased to confirm its commitment to   act as sole lead arranger for the Credit Facilities on the terms and subject   to the conditions contained in this Commitment Letter and the Term Sheet. KKR   is pleased to confirm its commitment to act as structuring advisor for the   Credit Facilities and to provide the Company 100% of the Credit Facilities,   in each case, on the terms and subject to the conditions contained in this   Commitment Letter and the Term Sheet. You hereby appoint KCM and KKR to act   in each such role. The obligations of KKR to provide its portion of the   Credit Facilities shall be, to the extent Additional Lenders (as defined   below) provide commitments to provide portions of the Credit Facilities,   several, not joint and several. KKR’s commitment to provide the Credit   Facilities is subject in all respects to the satisfaction of the terms and   conditions contained in this Commitment Letter. Our fees for our services   related to the Credit Facilities are set forth in a separate fee letter (the   “Fee Letter”), dated as of the date hereof, entered into by the Company and   KKR. You acknowledge and agree that KKR may share or assign any portion of   such fees with any Additional Lenders. Our commitments to fund the DIP   Facilities and the Exit Facilities on the applicable Closing Date are subject   to the satisfaction or waiver by KKR (or, if there are Additional Lenders, a   majority of the commitments to fund the DIP Facilities and the Exit   Facilities held by KKR and such Additional Lenders (KKR alone or such   majority, as the case may be, the “Required Lenders”)) of the conditions set   forth in the “Conditions to All Borrowings” section of the Term Sheet and   Exhibits B or C to the Term Sheet, as applicable, and upon satisfaction or   waiver of such conditions, the initial funding of the applicable Credit   Facility shall occur. By executing this Commitment Letter, the Company, on   behalf of itself, its subsidiaries, affiliates and Parent, agrees that from   the date hereof until June 30, 2019, (i) it will cease any discussion with   other potential debtor-in-possession financing providers and will not engage   in any discussion or provide any information or pay any commitment fee,   arrangement fee or any other similar fee or pay any expense deposit to any person   or persons other than KKR, KCM, and, if applicable, each Additional Lender,   in connection with soliciting from such financing provider, person or persons   a proposal or commitment to provide debtor-in-possession debt financing in   lieu of the DIP Facilities and (ii) that it will not enter into any   definitive agreement for a debtor-in-possession debt financing (including any   modification, extension, or continuation of existing credit facilities) in   lieu of the DIP Facilities if KKR and, if applicable, each Additional Lender,   are ready, willing and able to provide the proceeds of the DIP Facilities on   the terms and conditions substantially as set forth in this Commitment   Letter. For the avoidance of doubt, this paragraph shall not prohibit the   Companies from amending or otherwise modifying the Existing Prepetition   Credit Agreement and the other Loan Documents (as defined in the Existing   Prepetition Credit Agreement) with respect to the loans thereunder to effect   necessary waivers or forbearances with respect to existing or future defaults   under the Existing Prepetition Credit Agreement, reflect the payment in full   of the Existing Prepetition Revolving Credit Facility and otherwise in   connection with the transactions contemplated herein. KKR (together with certain   of its affiliates and its or their managed funds and accounts) is   underwriting the full amount of their respective commitments of the Credit   Facilities. However, KCM may syndicate the commitments with respect to the   Credit Facilities to financial institutions and/or other lenders 

    

 

Monitronics   International, Inc. May 20, 2019 Page 3 who are members of the Ad Hoc Lender   Group (“Additional Lenders”). You acknowledge and agree that, with respect to   the Exit Facilities, syndication to any Additional Lender will occur only to   the extent such Additional Lender agrees to provide commitments for both the   Exit Term Loan Facility and the Exit Revolving Credit Facility, pro rata with   respect to the total principal amounts of each. You also acknowledge and   agree that any Additional Lender shall provide both commitments and loans   under the DIP Facilities and the Exit Facilities which shall be no less than   such Ad Hoc Group Lender’s Pro Rata Share (unless otherwise agreed by KKR and   such Additional Lender), but shall not exceed the maximum commitment amount   that such Additional Lender indicates in its commitment (such maximum amount,   the “Additional Lender’s Maximum Amount”). By way of example, if less than   all of the Ad Hoc Group Lenders commit to be Additional Lenders, the   allocations of each such Additional Lender shall be increased on a pro rata   basis across KKR and such Additional Lenders until each Additional Lender’s   Maximum Amount has been reached. If all Additional Lenders’ Maximum Amounts   have been reached, and there are excess commitments to be allocated, KKR will   be allocated such commitments. For purposes hereof: “Ad Hoc Lender Group”   shall have the meaning assigned thereto in the Restructuring Support   Agreement, dated as of May 20, 2019. “Ad Hoc Group Lender” means an   Additional Lender who is a member of the Ad Hoc Lender Group; and “Pro Rata   Share” means, with respect to any Ad Hoc Group Lender, (i) the percentage of   such Ad Hoc Group Lender’s share of commitments and loans under the Existing   Prepetition Credit Agreement, as of the date hereof, divided by (ii) 0.60. So   long as no event of default has occurred and is continuing under the   applicable Credit Facility, unless you agree in writing, we will not   syndicate our commitments to (i) those banks, financial institutions and   other lenders and persons and any controlled affiliate of such person   reasonably identifiable by name (excluding (x) any affiliate that is a person   that is engaged in making, purchasing, holding or otherwise investing in   commercial loans and similar extensions of credit in the ordinary course of   business and (y) subject to clause (i) of the final sentence of this   paragraph, any person that is a lender under the Existing Prepetition Credit   Agreement), in all cases to the extent identified by name in writing by you   to us prior to the date hereof or (ii) those persons who are competitors of   the Companies and any controlled affiliate of such competitor reasonably   identifiable by name (in each case, excluding (x) their respective financial   investors that are not operating companies, and (y) any person that is   engaged in making, purchasing, holding or otherwise investing in commercial   loans and similar extensions of credit in the ordinary course of business)   that are separately identified by name in writing by you to us prior to the   date hereof and as such written notice may be updated from time to time with   our written approval (such persons above, collectively, the “Disqualified   Lenders”); provided that no such written notice shall apply retroactively to   disqualify any person that has acquired an assignment or participation   interest in the loans or commitments under the applicable Credit Facility   prior to the delivery of such notice. Notwithstanding anything to the contrary   contained in this Commitment Letter (i) unless you agree in writing, no   person that is a lender under the Existing Prepetition Credit Agreement that   is not a party to the Restructuring Support Agreement shall be permitted to   be a lender under either Credit Facility and (ii), neither the commencement   nor the completion of any such syndication of the Credit Facilities shall   constitute a condition precedent to the availability and funding of any   Credit Facility. In addition, the Company represents (it being understood   that the accuracy of such representation shall not be a condition to the   commitments hereunder or the funding of the Credit Facilities) and covenants   (it being understood that compliance with such covenant shall not be a   condition to the commitments hereunder or the funding of the Credit   Facilities) that (i) all written information, other than Projections (as   defined below) and information of a general economic or industry specific   nature, which has been or is hereafter provided directly or indirectly by the   Company or any of its representatives to KKR, KCM or the Lenders (as defined   in the Term Sheet) in connection with the transactions contemplated hereby 

    

 

Monitronics   International, Inc. May 20, 2019 Page 4 (the “Information”), as and when   furnished, is and will be complete and correct in all material respects and   does not and will not contain any untrue statement of a material fact or omit   to state a material fact necessary to make the statements contained therein   not misleading, taken as a whole, in light of the circumstances under which   such Information is provided (after giving effect to all supplements and   updates thereto) and (ii) all financial projections concerning the Companies   that have been or will be made available to KKR, KCM or the Lenders by the   Company or any of its representatives (the “Projections”) have been and will   be prepared in good faith based upon assumptions that are believed by you to   be reasonable at the time made and at the time any such Projections are   delivered to KKR and KCM (it being understood that any such Projections are   not to be viewed as facts, are subject to significant uncertainties and   contingencies, many of which are beyond your control, that no assurance can   be given that any particular Projections will be realized, that actual   results may differ and that such differences may be material). You agree that   if at any time prior to the applicable Closing Date, any of the representations   in the preceding sentence would be incorrect in any material respect if the   Information and Projections were being furnished, and such representations   were being made, at such time, then you will promptly supplement, or cause to   be supplemented, the Information and Projections so that such representations   will be correct in all material respects under those circumstances. By   executing this Commitment Letter, you agree to reimburse KKR, KCM and, if   there are Additional Lenders, the Ad Hoc Lender Group, on each Closing Date   (or if this Commitment Letter terminates in accordance with the terms hereof,   on demand) for all reasonable and documented out-of-pocket fees and expenses   (including, but not limited to, (i) the reasonable fees, disbursements and   other charges of (x) Proskauer Rose, LLP, as counsel to KKR and KCM, (y)   Jones Day as counsel to the Lenders (other than KKR) and Ad Hoc Lender Group,   and (z) a single local counsel to the Lenders, KKR and KCM for each   applicable jurisdiction, and, solely in the case of an actual or potential   conflict of interest, one additional counsel to each group of similarly   situated persons taken as a whole and (ii) search fees, due diligence   expenses, transportation expenses and insurance consultant costs and expenses   and fees and expenses incurred by KKR and KCM in connection with background   checks) incurred in connection with the Credit Facilities, the syndication   thereof, the preparation of the definitive documentation therefor and the   other transactions contemplated hereby (collectively, the “Expenses”),   regardless of whether any of the transactions contemplated hereby are   consummated. Within one business day after the execution of this Commitment   Letter, the Company shall pay to KKR an additional expense deposit of   $100,000 (the “Expense Deposit”), to fund Expenses incurred by or on behalf   of KKR and KCM. Prior to the termination of this Commitment Letter, KKR may   request in writing (with such request to be accompanied, upon the Company’s   request, by a reasonably detailed description (but not an itemized list) of   (x) disbursements from the Expense Deposit to date and (y) expected future   disbursements from the Expense Deposit), and the Company shall promptly pay   to KKR, in immediately available funds, an additional expense deposit if the   amount of Expenses incurred or expected to be incurred by KKR and KCM in   connection with the Credit Facilities exceeds or are expected to exceed the   amount of the Expense Deposit being held by KKR. The Expense Deposit will not   be segregated and may be commingled with other funds and the Company will not   be entitled to receive interest on the Expense Deposit. Upon the earlier of   (i) termination of this Commitment Letter and (ii) the Exit Facilities   Closing Date, any unused portion of the Expense Deposit (other than amounts   reasonably expected to be incurred as a result of any post-closing matters   under the Exit Loan Documents) shall be promptly returned to the Company. In   addition, in connection with arrangements such as this, it is KKR’s and KCM’s   policy to receive indemnification. The Company agrees to indemnify and   reimburse KKR, KCM and, if applicable, 

    

 

Monitronics   International, Inc. May 20, 2019 Page 5 each Additional Lender, in accordance   with the provisions set forth in Annex A, which is incorporated by reference   into this Commitment Letter. Please note that this Commitment Letter, the   Term Sheet and the Fee Letter and any written or oral advice provided by us   in connection with this arrangement are exclusively for the information of   the board of directors and senior management of the Company and may not be   disclosed to any third party or circulated or referred to publicly without   our prior written consent; provided, however, that we hereby consent to your   disclosure of (i) this Commitment Letter, the Term Sheet and the Fee Letter   on a confidential and “need to know” basis, to your or the Parent's (as   defined in the Term Sheet) respective directors, officers, employees,   accountants, attorneys and other professional advisors retained by you or the   Parent in connection with the transactions contemplated hereby, (ii) this   Commitment Letter and the Term Sheet (but not the Fee Letter) (A) to the   agents under the Existing Prepetition Credit Agreement, the Ad Hoc Lender   Group, the indenture trustee under the Senior Unsecured Note Indenture (as   defined in the Existing Prepetition Credit Agreement), the adhoc group of   holders of the Senior Unsecured Notes (as defined in the Existing Prepetition   Credit Agreement), and on a confidential and “need to know” basis, each of   their respective directors, officers, employees, accountants, attorneys and   other professional advisors, (B) after your acceptance of this Commitment   Letter and the Fee Letter, in any proxy statement or other public filing in   connection with the transactions contemplated hereby (including filings with   the Securities and Exchange Commission and other applicable regulatory   authorities and stock exchanges) and (C) in the Plan of Reorganization or in   a Bankruptcy Court filing in order to implement the transactions as   contemplated hereby (in which case you agree to inform us promptly thereof to   the extent not prohibited by law, rule or regulation); provided that at the   request of KKR or KCM, certain parts shall be redacted and not filed   publicly, (iii) the Fee Letter, to any Additional Lender, (iv) the aggregate   amount of the fees (including any upfront fees and original issue discount)   payable under the Fee Letter either as part of (A) a generic disclosure regarding   sources and uses (but without disclosing any specific fees set forth therein)   as part of a disclosure of overall transaction fees and expenses (not limited   to fees associated with the Credit Facilities) or (B) to the attorneys and   other professional advisors to the adhoc group of the Existing Term Loan   Lenders and the adhoc group of holders of the Senior Unsecured Notes, in each   case, on a confidential and “need to know” basis, (v) upon granting of a   motion to file the Fee Letter under seal, (A) unredacted copies of the Fee   Letter may be filed under seal with the Bankruptcy Court and disclosed to   such other persons or entities determined by KKR in our sole discretion on a   confidential basis and (B) a redacted version of the Fee Letter to the extent   required in motions, in form and substance satisfactory to KKR, to be filed   with the Bankruptcy Court solely in connection with obtaining the entry and   order approving your execution, delivery and performance of this Commitment   Letter, the Fee Letter or other agreements necessary to approve the   transactions contemplated hereby, (vi) the Term Sheet only, to each of   Standard & Poor’s Ratings Group, a Standard & Poor’s Financial   Services Business and Moody’s Investors Service, Inc., on a confidential basis,   in connection with obtaining ratings for the Exit Facilities and (vii) as   required to be disclosed by applicable law or compulsory legal process (in   which case you agree to inform us promptly thereof to the extent not   prohibited by law, rule or regulation) (including in connection with the   Bankruptcy Cases). Each of KKR and KCM agrees to treat any Evaluation   Material (as defined in the NDA referenced below) in accordance with the   terms of the letter agreement, dated as of February 27, 2019, between the   Company, Ascent Capital Group, Inc. and KKR Credit Advisors (US) LLC (the   “NDA”). KKR, KCM, each Additional Lender, if applicable, and each of their   respective affiliates may have economic interests that conflict with those of   the Company. You agree that each of KKR, KCM and, each Additional Lender, if   applicable, will act under this Commitment Letter as an independent   contractor and that nothing in this Commitment Letter, the Term Sheet or the   Fee Letter or otherwise will be deemed to create an advisory, fiduciary or   agency relationship or fiduciary or other implied duty between 

    

 

Monitronics   International, Inc. May 20, 2019 Page 6 KKR, KCM or, if applicable, any   Additional Lender, on the one hand, and the Company, its stockholders or its   affiliates, on the other hand. You acknowledge and agree that (i) the   transactions contemplated by this Commitment Letter, the Term Sheet and the   Fee Letter are arm's-length commercial transactions between KKR, KCM or, if   applicable, any Additional Lender,, on the one hand, and the Company and its   affiliates, on the other, (ii) in connection with the transactions   contemplated hereby, and with the process leading thereto, each of KKR, KCM   or, if applicable, any Additional Lender, is acting solely as a principal and   not the agent or fiduciary of the Company, its management, stockholders,   affiliates, creditors or any other person, (iii) none of KKR, KCM or, if   applicable, any Additional Lender has assumed an advisory or fiduciary   responsibility in favor of the Company and its affiliates with respect to the   transactions contemplated hereby or the process leading thereto (irrespective   of whether KKR, KCM or, if applicable, any Additional Lender, or any of their   respective affiliates has advised or is currently advising the Company and   its affiliates on other matters) or any other obligation to the Company and   its affiliates except the obligations expressly set forth in this Commitment   Letter, the Term Sheet and the Fee Letter and (iv) the Company has consulted   its own legal and financial advisors to the extent it deemed appropriate. The   Company further acknowledges and agrees that it is responsible for making its   own independent judgment with respect to such transactions and the process   leading thereto. The Company, on behalf of itself and its affiliates, agrees   that it will not claim that either KKR, KCM or, if applicable, any Additional   Lender, or any of their respective affiliates has rendered advisory services   of any nature or respect, or owes a fiduciary or similar duty to the Company   and its affiliates, in connection with such transactions or the process   leading thereto. In addition, each of KKR, KCM or, if applicable, any   Additional Lender may employ the services of their respective affiliates in   providing certain services hereunder and subject to the terms of the NDA, may   exchange with such affiliates information concerning the Company and other   companies that may be the subject of this Commitment Letter, the Term Sheet   and the Fee Letter, and such affiliates shall be entitled to the benefits   afforded to KKR, KCM or, if applicable, such Additional Lender hereunder. The   provisions of the immediately preceding three paragraphs shall remain in full   force and effect regardless of whether any definitive documentation for the   Credit Facilities shall be executed and delivered, and notwithstanding the   termination of this Commitment Letter or any commitment or undertaking   hereunder; provided that your obligations under this Commitment Letter with   respect to indemnification shall automatically terminate and be superseded by   the corresponding provisions of the Credit Facilities upon the initial   funding thereunder and you shall be released from all liability in connection   therewith at such time. In the event the closing of the DIP Facilities does   not occur by June 30, 2019 (the “DIP Commitment Termination Date”), our   commitment to provide the DIP Facilities shall automatically expire on such   date unless extended by KKR and any Additional Lender in writing. In the   event that our commitment to provide the DIP Facilities expires or the   closing of the Exit Facilities does not occur within 150 days of the Filing   Date (as defined below) (such date, the “Exit Commitment Termination Date”),   our commitment to provide the Exit Facilities shall automatically expire on   such date unless extended by KKR and any Additional Lender in writing;   provided, however, that the Exit Commitment Termination Date shall be   automatically extended to the date that the Exit Milestone (as defined in   Exhibit A to Annex B hereto) is extended in accordance with the terms set   forth on such Exhibit A. This Commitment Letter may not be assigned by the   Company without KKR’s and KCM’s prior written consent (and any purported   assignment without such consent shall be null and void), is intended to be   solely for the benefit of the parties hereto and is not intended to confer   any benefits upon, or create any rights in favor of, any person other than   the parties hereto. KKR may assign its commitments hereunder, in whole or in   part (including, for example, our commitment to provide the Credit   Facilities), to 

    

 

Monitronics   International, Inc. May 20, 2019 Page 7 any of its affiliates or to any   Lender (it being understood that any such assignment will not relieve KKR, as   applicable, of any of its commitments to extend the Credit Facilities   hereunder on the applicable Closing Date (as defined below), subject to the   provisions hereof. Unless you agree in your sole discretion in writing to the   contrary, KKR shall retain exclusive control over all rights and obligations   with respect to its commitment in respect of each Credit Facility including   all rights with respect to consents, modifications, waivers, supplements and   amendments, until after the initial funding under such Credit Facility has   occurred. Neither this Commitment Letter (including the Term Sheet) nor the   Fee Letter may be amended or any term or provision hereof or thereof waived   or modified except by an instrument in writing signed by each of the parties   hereto or thereto. KKR hereby notifies you that pursuant to the requirements   of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October   26, 2001)) (the “Act”) and other applicable law relating to money laundering   and terrorist financing, KKR and each other Lender under the proposed Credit   Facilities may be required to obtain, verify and record information that   identifies the Company and each other Credit Party, which information   includes the name, address and taxpayer identifying number of the Company and   each other Credit Party and other information that will allow KKR and each   other Lender to the proposed Credit Facilities to identify the Company and   each other Credit Party in accordance with the Act and such other applicable   law. This notice is given in accordance with the requirements of the Act and   is effective for KKR and each other the Lender. This Commitment Letter may be   executed in any number of counterparts, each of which when executed shall be   an original, and all of which, when taken together, shall constitute one   agreement. Delivery of an executed counterpart of a signature page of this   Commitment Letter by facsimile or other electronic transmission shall be   effective as delivery of a manually executed counterpart hereof. Please confirm   that the foregoing is in accordance with your understanding by signing and   returning the enclosed copy of this Commitment Letter to KKR and KCM and the   Fee Letter to KKR, accompanied by the relevant fees described in the Fee   Letter and the Expense Deposit by wiring the amounts thereof to KKR or its   designee as described in an invoice or letter which will be separately   provided to you, in each case, on or before 5:00 p.m. (New York time) on May   21, 2019, whereupon this Commitment Letter shall become a binding agreement   among KKR, KCM and the Company and the Fee Letter shall become a binding   agreement between KKR and the Company, in each case, as of the date hereof.   If not signed and returned, together with the delivery of the Expense   Deposit, as described in the preceding sentence by such date and time, this   offer will terminate on such date and time. In addition, if the Bankruptcy   Cases are commenced prior to the execution and delivery of this Commitment   Letter and the Fee Letter, together with the delivery of the fees described   in this paragraph and the Expense Deposit, in each case, as described in the   preceding sentence, this offer will terminate upon the commencement of the   Bankruptcy Cases. THIS COMMITMENT LETTER AND THE FEE LETTER REPRESENT THE FINAL   AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF   PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE   ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. If this Commitment   Letter or the Fee Letter becomes the subject of a dispute, each of the   parties hereto hereby waives trial by jury. The Company agrees that any suit   or proceeding arising in respect to this Commitment Letter or the Fee Letter   or any matter referred to in this Commitment Letter or the Fee Letter will be   tried exclusively in the Bankruptcy Court or, if that court does not have   subject matter 

    

 

Monitronics   International, Inc. May 20, 2019 Page 8 jurisdiction, then the U.S. District   Court for the Southern District of New York or, if that court does not have   subject matter jurisdiction, then in any state court located in the County of   New York in the State of New York, and the Company agrees to submit to the   exclusive jurisdiction of, and to venue in, such courts. This Commitment   Letter, the Term Sheet and the Fee Letter (i) supersedes all prior   discussions, agreements (other than the NDA), commitments, arrangements,   negotiations and understandings, whether oral or written, of the parties with   respect thereto, (ii) shall be governed by the law of the State of New York,   without giving effect to the conflict of laws provisions thereof, (iii) shall   be binding upon the parties and their respective successors and assigns, and   (iv) may not be relied upon or enforced by any other person or entity other   than the parties hereto or any Additional Lender. [Remainder of page   intentionally left blank] 

    

 

Annex A In the   event that KKR, KCM and/or any Additional Lender becomes involved in any   capacity in any action, proceeding or investigation brought by or against any   person, including stockholders, partners, or other equity holders of the   Company, in connection with or as a result of either this arrangement or any   matter referred to in this Commitment Letter or the Fee Letter (together, the   “Letters”), the Company agrees to periodically reimburse KKR, KCM and such   Additional Lender for their reasonable and documented legal and other   expenses (in the case of legal expenses limited to fees, disbursements and   other charges of one primary counsel to KKR and one primary counsel for the   Lenders selected by the Ad Hoc Lender Group, single local counsel to KKR and   a single local counsel for the Lenders selected by the Ad Hoc Lender Group   for each applicable jurisdiction, and, solely in the case of an actual or   potential conflict of interest, one additional counsel to each group of   similarly situated persons taken as a whole) (including the cost of any   investigation and preparation) incurred in connection therewith. The Company   also agrees to indemnify and hold each of KKR, KCM and any Additional Lender   harmless against any and all losses, claims, damages or liabilities to any   such person in connection with or as a result of either this arrangement or   any matter referred to in the Letters, and without regard to the exclusive or   contributory negligence of KKR, KCM, such Additional Lender or their respective   affiliates, or the partners, directors, agents, employees and controlling   persons (if any), as the case may be, of KKR, KCM, any Additional Lender and   any such affiliate, except to the extent that such have been found by a   final, non-appealable judgment of a court of competent jurisdiction to have   resulted from the gross negligence or willful misconduct of KKR, KCM or such   Additional Lender, as applicable. If for any reason the foregoing   indemnification is unavailable to KKR, KCM or such Additional Lender, or is   insufficient to hold them harmless, then the Company shall contribute to the   amount paid or payable by KKR, KCM or such Additional Lender, as applicable,   as a result of such loss, claim, damage or liability in such proportion as is   appropriate to reflect the relative economic interests of the Company and its   stockholders, partners, or other equity holders on the one hand and KKR, KCM   and such Additional Lender, as applicable, on the other hand in the matters   contemplated by the Letters as well as the relative fault of the Company and   KKR, KCM and such Additional Lender, as applicable, with respect to such   loss, claim, damage or liability and any other relevant equitable   considerations. The reimbursement, indemnity and contribution obligations of   the Company under this paragraph shall be in addition to any liability which   the Company may otherwise have, shall extend upon the same terms and   conditions to any affiliate of KKR, KCM, any Additional Lender and the   partners, directors, agents, employees and controlling persons (if any), as   the case may be, of KKR, KCM, any Additional Lender and any such affiliate,   and shall be binding upon and inure to the benefit of any successors,   assigns, heirs and personal representatives of the Company, KKR, KCM, such   Additional Lender, any such affiliate and any such person. The Company also   agrees that neither any indemnified party nor any of such affiliates,   partners, directors, agents, employees or controlling persons shall have any   liability based on its or their exclusive or contributory negligence or   otherwise to the Company or any person asserting claims on behalf of or in   right of the Company or any other person in connection with or as a result of   either this arrangement or any matter referred to in the Letters; except in   the case of the Company to the extent that any losses, claims, damages,   liabilities or expenses incurred by the Company or its affiliates,   stockholders, partners or other equity holders have been found by a final,   non-appealable judgment of a court of competent jurisdiction to have resulted   from the gross negligence or willful misconduct of such indemnified party in   performing the services that are the subject of the Letters; provided,   however, that in no event shall such indemnified party or such other parties   have any liability for any indirect, consequential or punitive damages in   connection with or as a result of such indemnified party's or such other   parties' activities related to the Letters. The provisions of this Annex A   shall survive any termination or completion of the arrangement provided by   the Letters. Annex A-1 

    

 

Annex B   Monitronics International, Inc. Summary of Terms and Conditions of the Credit   Facilities Capitalized terms used in this Annex B but not defined herein   shall have the meanings given to them in the Commitment Letter to which this   Annex B is attached. Borrower: DIP Facilities: Monitronics International,   Inc., a Texas corporation (“Monitronics”), as debtor-in-possession in the   Bankruptcy Cases to be filed (the date of such filings referred to herein as   the “Filing Date”) under the Bankruptcy Code in the Bankruptcy Court. Exit   Facilities: Monitronics, as reorganized pursuant to the Bankruptcy Cases   (“Reorganized Monitronics”). “Borrower” or “Company” shall mean (i)   Monitronics prior to the Exit Facilities Closing Date and (ii) Reorganized   Monitronics on and after the Exit Facilities Closing Date. “Reorganized   Companies” shall mean the Companies, as reorganized pursuant to the   Bankruptcy Cases. Guarantors: Each of Borrower’s existing and future direct   and indirect subsidiaries (excluding any foreign subsidiary to the extent   that the Borrower and the Agent determine that any change to the U.S tax laws   after the Closing Date would result in materially adverse tax consequences to   the Credit Parties taken as a whole) (collectively, such subsidiaries are the   “Guarantors”, and, collectively with the Borrower, the “Credit Parties” or   each individually a “Credit Party”) shall guaranty (the “Guaranty”) all obligations   under the Credit Facilities. All guarantees shall be guarantees of payment   and not of collection. Administrative Agent and Collateral Agent: Cortland   Capital Market Services LLC or another third party designated by the   Structuring Advisor and reasonably acceptable to the Borrower (in such   capacity, the “Agent”). Structuring Advisor: KKR Credit Advisors (US) LLC   (“KKR”) (in such capacity, the “Structuring Advisor”). Sole Lead Arranger and   Bookrunner: KKR Capital Markets LLC (“KCM”) (in such capacity, the   “Arranger”). Lenders: KKR and certain of its affiliates and its or their   managed funds and accounts and/or, subject to the applicable provisions of   the DIP Loan Documents (as defined below) or the Exit Loan Documents (as   defined below) and the Additional Lenders (each, a “Lender” and,   collectively, the “Lenders”). During the effectiveness of the DIP Annex B-1 

    

 

Facilities,   Lenders shall refer to the Lenders under the DIP Facilities (the “DIP   Lenders”), and during the effectiveness of the Exit Facilities, Lenders shall   refer to the Lenders under the Exit Facilities (the “Exit Lenders”). DIP   Facilities: DIP Revolving Credit Facility: A senior secured revolving credit   facility of up to $245 million, which shall include a $10 million subfacility   for the issuance of letters of credit (each a “Letter of Credit”), which   shall be issued by a third party financial institution reasonably acceptable   to the Borrower, and whom the parties shall use commercially reasonable   efforts to engage on or prior to the Filing Date; provided that to the extent   that a letter of credit issuer is not engaged by the date of the entry of the   interim order, any undrawn letters of credit outstanding under the Existing   Prepetition Credit Facility shall be cash collateralized with proceeds of DIP   Revolving Loans. Exit Facilities: Exit Revolving Credit Facility: An   aggregate principal amount equal to $145 million (the “Exit Revolving Credit   Facility”) Exit Term Loan Facility: An aggregate principal amount equal to   $150 million (the “Exit Term Loan Facility”). Availability: DIP Revolving   Credit Facility: Subject to the terms of the DIP Orders, revolving loans   under the DIP Revolving Credit Facility (the “DIP Revolving Loans”) may be   borrowed, repaid and re-borrowed on and after the DIP Facilities Closing Date   until the DIP Facilities Maturity Date. Under the DIP Revolving Credit   Facility, Agent (at the direction of the Structuring Advisor) will have the   right to establish a reserve against availability under the commitments under   the DIP Revolving Credit Facility and the Borrowing Base (as defined below)   in the amount of the Carve-Out Expenses (as hereinafter defined). The DIP   Lenders shall provide a portion of the DIP Revolving Credit Facility in an   aggregate amount not less than the sum of (1) the amount necessary to retire   the Existing Prepetition Revolving Credit Facility in full and cash   collateralized any letters of credit thereunder, if so required, and (2) $45   million as the Bankruptcy Court may approve (the “Interim DIP Facility”) on   terms and conditions set forth in, and to the extent permitted by, the   Interim Order and on terms and conditions set forth in the DIP Loan   Documents. The Interim DIP Facility will have a final maturity of not more   than 45 days from the date of the Interim Order (the “Interim Facility   Maturity Date”). The portion of the DIP Facilities made under the Interim DIP   Facility will be due and payable on the Interim Facility Maturity Date unless   the Final DIP Order (as defined below) shall have been entered by the   Bankruptcy Court on or before such date. The Interim DIP Facility shall have   substantially the same terms and conditions as the DIP Facilities, except to   the extent set forth in this paragraph. “Final DIP Order” means a Final Order   (as defined below), in form and substance reasonably acceptable to the   Required Lenders, approving the DIP Annex B-2 

    

 

Facilities.   “Final Order” means an order of the Bankruptcy Court, the operation and   effect of which has not been vacated, stayed, amended, reversed or modified,   and as to which (a) the time to appeal, petition for certiorari, or motion   for argument or rehearing has expired and as to which no appeal, petition for   certiorari, or motion for re-argument or rehearing shall then be pending, or   (b) in the event that an appeal, writ for certiorari, re-argument or   rehearing thereof has been sought, such order shall have been affirmed as   originally entered by the Bankruptcy Court by the highest court to which an   appeal, petition for certiorari or re-argument or rehearing was sought and   the time to take any further appeal, petition for certiorari, or motion for   re-argument or rehearing shall have expired. Exit Revolving Credit Facility:   Revolving loans under the Exit Revolving Credit Facility (the “Exit Revolving   Loans” and together with the DIP Revolving Loans, the “Revolving Loans”) may   be borrowed, repaid and re-borrowed on and after the Exit Facilities Closing   Date (as defined below) until the Exit Facilities Maturity Date (as defined below).   Exit Term Loan Facility: The term loan under the Exit Term Loan Facility (the   “Exit Term Loan” and together with the Exit Revolving Loans, the “Exit   Loans”) shall be fully drawn on the Exit Facilities Closing Date. In each   Revolving Credit Facility, the aggregate amount of Revolving Loans and   Letters of Credit shall not exceed the lesser of (i) the total commitment   under the applicable Revolving Credit Facility and (ii) the amount of the   Borrowing Base minus with respect solely to the Exit Revolving Credit   Facility, the aggregate principal amount of the Term Loans outstanding.   “Borrowing Base” means ten (10) times the Eligible RMR (as defined below)   balance of the Credit Parties for the month most recently ended for which   financial statements and a borrowing base certificate were required to be   delivered under the applicable Loan Documents. “Eligible RMR” means, as of   any time, 100% of the aggregate amount of (a) RMR subject to billing under   Monitoring Contracts between customers and the Credit Parties and (b) 14.6/28   of RMR under agreements to provide wholesale monitoring services (provided,   that the amount under this clause (b) shall not exceed 5% of total Eligible   RMR), in each case, in effect in which no person other than the Credit   Parties or any of their Subsidiaries and the Agent has any interest (other   than (x) Liens permitted under the applicable Loan Document to the extent   junior to the Liens of the Agent and (y) Liens on Monitoring Contracts   acquired from new Approved Alarm Dealers that secure residual contingent   obligations to previous buyers of Monitoring Contracts from such Approved   Alarm Dealers that will be terminated in the ordinary course of business;   provided that not more than 5% of Eligible RMR shall be derived from   Monitoring Contracts subject to such Liens), provided, however, that Eligible   RMR will not include any revenue: Annex B-3 

    

 

(i) from   customers whose balances are more than ninety (90) days past due; (ii) that   is not periodic in nature, but rather relates to installation purchase   payments or onetime assessments or charges; (iii) from stand alone service   agreements and extended repair service, maintenance or inspection agreements   that are not provided in conjunction with alarm monitoring; (iv) from   Monitoring Contracts that (A) do not have FICO Scores (unless such Monitoring   Contracts are for commercial accounts with acceptable credit reviews pursuant   to customary credit criteria for commercial subscribers) or (B) have FICO   Scores less than 625; provided that notwithstanding the foregoing, (x) not   more than 2% of Eligible RMR can be comprised of Monitoring Contracts that   have FICO Scores of less than 600, (y) not more than 15% of Eligible RMR can   be comprised of Monitoring Contracts that have FICO Scores of greater than   599, but less than 625 and (z) not more than 6% of Eligible RMR (other than   from commercial accounts with acceptable credit reviews pursuant to customary   credit criteria for commercial subscribers) can be comprised of Monitoring   Contracts that do not have FICO Scores; (v) reimbursement for or payment of   any taxes, fees or other charges imposed by any Governmental Authority   relative to the furnishing of alarm services or maintenance services; and   (vi) late fees or fees for not sufficient fund checks. Capitalized terms in   the definition of Eligible RMR shall have the meanings given such terms in   the Existing Prepetition Credit Agreement (subject to the Documentation   Principles). DIP Facilities Closing Date: The DIP Facilities shall close on   the first date on which all of the conditions precedent set forth in   “Conditions to All Borrowings” section of this Term Sheet and Exhibit B   hereto are satisfied (the “DIP Facilities Closing Date”). Exit Facilities   Closing Date: The Exit Facilities shall close on the first date on which all   of the conditions precedent set forth in “Conditions to All Borrowings”   section of this Term Sheet and Exhibit C hereto are satisfied (the “Exit   Facilities Closing Date” and together with the DIP Facilities Closing Date,   each, a “Closing Date”). Conditions to All Borrowings: In the case of each   Credit Facility: (i) prior written notice of borrowing (which must be   received by the Agent no later than 1:00 p.m. (A) three (3) business days   prior Annex B-4 

    

 

to the   requested date of any borrowing or, or conversion to or continuation of,   loans bearing interest at LIBOR or of any conversion of loans bearing   interest at LIBOR to loans bearing interest at the Base Rate, and (B) on the   requested date of any borrowing of loans bearing interest at the Base Rate);   (ii) the accuracy of representations and warranties as of the date of each   borrowing; (iii) a pro forma calculation of borrowing base utilization, in   form and substance reasonably satisfactory to the Structuring Advisor; and   (iv) the absence of any default or event of default. DIP Facilities Maturity   Date: The earliest of (a) the Interim Facility Maturity Date, if the Final   DIP Order has not been entered by the Bankruptcy Court on or prior to such   date, (b) the date that is 12 months after the Filing Date, (c) the effective   date with respect to any Plan of Reorganization, (d) the filing of a motion   by the Credit Parties seeking dismissal of any Bankruptcy Cases, the   dismissal of any of the Bankruptcy Cases, the filing of a motion by the   Credit Parties seeking to convert any of the Bankruptcy Cases to a case under   Chapter 7 of the Bankruptcy Code or the conversion of any of the Bankruptcy   Cases to a case under Chapter 7 of the Bankruptcy Code, (e) the date a sale   of all or substantially all of the Credit Parties’ assets is consummated   under Section 363 of the Bankruptcy Code, (f) the acceleration of the   obligations under the DIP Facilities following the occurrence of an event of   default under the DIP Loan Documents, and (g) the appointment of a Chapter 11   Trustee (such earliest date, the “DIP Facilities Maturity Date”). Unless the   Companies elect to convert the DIP Facilities into Exit Facilities, all   amounts outstanding under the DIP Facilities shall be due and payable in full   on the DIP Facilities Maturity Date. Unless the DIP Facilities Maturity Date   shall occur in connection with a refinancing pursuant to the Exit Facilities,   any Letters of Credit outstanding on the DIP Facilities Maturity Date shall   be cash collateralized in an amount equal to 105% of the face amount thereof   or backed by letter(s) of credit reasonably acceptable to issuing bank. Exit   Facilities Maturity Date: The 5th anniversary of the DIP Facilities Closing   Date (the “Exit Facilities Maturity Date”). Amortization: None. Interest   Rates: Calculated on a 360-day basis: Current Rate: With respect to each   Credit Facility: A floating rate equal to LIBOR + 5.00% or Base Rate + 4.00%.   Default Rate: 2.00% in addition to the Current Rate, payable on demand. As   used herein, the terms “Base Rate” and “LIBOR” shall have meanings customary   and appropriate for financings of this type, and the basis for calculating   Annex B-5 

    

 

accrued   interest and the interest periods for loans bearing interest based on LIBOR   shall be customary and appropriate for financings of this type; provided that   at no time would LIBOR be less than 1.50% and at no time would the Base Rate   be less than 4.50%. There shall be no more than ten (10) outstanding interest   periods in effect in respect of the Credit Facilities. Unused Line Fee: A   commitment fee of 0.75% per annum on the average daily unused portion of each   of the DIP Revolving Credit Facility and Exit Revolving Credit Facility, as   applicable, payable quarterly in arrears commencing with the first full   fiscal quarter following the DIP Facilities Closing Date or the Exit   Facilities Closing Date, as applicable, Such fees shall be distributed to   each Lender under such facility pro rata in accordance with the amount of   each such Lender’s commitment under such facility. Letter of Credit Fees:   Letter of Credit fees equal to the margin included in the Current Rate from   time to time on the Revolving Credit Facility for LIBOR advances on a per   annum basis will be payable quarterly in arrears and shared proportionately   by the Lenders under the Revolving Credit Facility. In addition, a fronting   fee will be payable to the issuing bank for such Letters of Credit for its   own account, in an amount equal to 0.25% per annum of the aggregate face   amount under each Letter of Credit, payable quarterly in arrears. Such   issuing bank will also receive such documentary and processing charges for   any issuance, amendment, transfer or payment of a Letter of Credit as are in   accordance with the Letter of Credit issuer’s standard schedule for such   charges and as in effect at the time of such issuance, amendment, transfer or   payment, as the case may be. All Letter of Credit fees will be calculated on   a 360-day basis and may be modified by the applicable third party financial   institution providing such Letters of Credit as agreed to by such institution   and the Borrower. Payment Schedule: Interest at the Current Rate is due   monthly for borrowings bearing interest with reference to the Base Rate, on   the last day of selected interest periods (which shall be one, two or three   months) for borrowings bearing interest with reference to LIBOR and upon   prepayment, in each case, payable in arrears. Upon the occurrence and during   the continuance of an event of default, at the election of the Required   Lenders, all obligations owed under the applicable Loan Documents shall bear   interest at the Default Rate from the date such event of default occurred   until the date such event of default is waived in accordance with the terms   of the Loan Documents. Notwithstanding the foregoing, no election of the   Required Lenders shall be required in connection with any payment or   insolvency default, and upon a payment or insolvency default, all obligations   owed under the applicable Loan Documents shall bear interest at the Default   Rate automatically from the date of the occurrence of such event of default. Interest   at the Default Rate shall be payable on demand. Annex B-6 

    

 

Documentation   Principles: The terms of the Credit Facilities shall be generally consistent   with, and based on, those set forth in (a) the Existing Prepetition Credit Agreement   and (b) the other Loan Documents (as defined in the Existing Prepetition   Credit Agreement), in each case, with such changes as are necessary or   appropriate (i) for debtor-in-possession financings (in the case of the DIP   Facilities), (ii) to address terms of the Credit Facilities as set forth in   the Commitment Letter, this Term Sheet and the Fee Letter, (iii) to reflect   the changes in the capital structure and the credit profile of the Companies   since the date of the Existing Prepetition Credit Agreement (which shall   include, without limitation, the changes set forth in Exhibit D hereto), and   (iv) such other changes to the extent agreed by the Company and the Required   Lenders; provided, that the borrowing mechanics (including provisions related   to the Letters of Credit) and other operational provisions applicable to the   Credit Facilities will be reasonably satisfactory to the Required Lenders and   agency provisions applicable to the Credit Facilities will be reasonably   satisfactory to the Required Lenders. Notwithstanding the foregoing,   representations and warranties, covenants (other than financial covenants)   and other terms and conditions under the Loan Documents may conform to the   Amended Existing Prepetition Credit Agreement as reasonably determined by the   Required Lenders. The provisions of this paragraph are referred to herein as   the “Documentation Principles”. The Collateral securing the Credit Facilities   shall be subject to the Intercreditor Agreement (as defined below).   “Intercreditor Agreement” means (i) prior to the Exit Facilities Closing   Date, the existing Intercreditor and Collateral Agency Agreement, dated as of   September 30, 2016 (as such agreement may be modified by the Interim Order,   the “Existing Intercreditor Agreement”) and (ii) on and after the Exit   Facilities Closing Date, an intercreditor agreement in form and substance   reasonably satisfactory to the Structuring Advisor and the Agent (the “Exit   Intercreditor Agreement”). The Exit Intercreditor Agreement shall (a) provide   that the Credit Facilities and the term loans under the Amended Existing   Prepetition Credit Agreement (such term loans, the “Term B-2 Loans”) will be   secured on a pari passu basis, (b) set forth the superpriority nature of the   Credit Facilities and (iii) require that all enforcement actions (other than   certain enforcement actions to be agreed) shall require the consent of both a   majority of the Lenders under the Credit Facilities and a majority of the   holders of the Term B-2 Loans. Mandatory Prepayments: Consistent with the   Existing Prepetition Credit Agreement but subject to the Documentation   Principles and shall also require a permanent reduction and full termination   of the commitments under the Exit Revolving Credit Facility to the extent the   Exit Term Loan Facility is prepaid in full and/or refinanced in its entirety.   For the avoidance of doubt, the Loan Documents will include each mandatory   prepayment included in the Amended Existing Prepetition Credit Agreement.   Prepayment Annex B-7 

    

 

Application: In   the DIP Facilities, all mandatory prepayments shall be applied as directed by   the Borrower to the DIP Facilities (without a permanent reduction in the   revolving commitments under the DIP Revolving Credit Facility). In the Exit   Facilities, all optional prepayments shall be applied in the following order:   (i) first, to the outstanding principal balance of the Revolving Loans under   the Exit Revolving Credit Facility (without a permanent reduction in the   revolving commitments under the Exit Revolving Credit Facility, except as   provided above under “Mandatory Prepayments”) and (ii) second, to the Term   Loans under the Exit Term Loan Facility until paid in full. In the Exit   Facilities, a Specified Mandatory Prepayment (as defined in Exhibit D) shall   be applied in the following order: (i) first, to the outstanding principal   balance of the Revolving Loans under the Exit Revolving Credit Facility   (without a permanent reduction in the revolving commitments under the Exit   Revolving Credit Facility); (ii) second, to cash collateralize any Letters of   Credit then outstanding in an amount equal to 105% of the face amount thereof   to the extent that the aggregate principal balance of the Revolving Loans and   the Letters of Credit under the Exit Revolving Credit Facility exceed the   Borrowing Base and (iii) third, to the Exit Term Loans. In the Exit   Facilities, all mandatory prepayments (other than the Specified Mandatory   Prepayment) shall be applied in the following order: (i) first, to the Exit   Term Loans until paid in full; (ii) second, to the Exit Revolving Loans   (without a permanent reduction in the revolving commitments under the Exit   Revolving Credit Facility) and (iii) third, following the occurrence and   during the continuation of an Event of Default, to cash collateralize any   Letters of Credit then outstanding in an amount equal to 105% of the face   amount thereof. Any Lender (a “Declining Lender”) may elect not to accept its   pro rata portion of any mandatory prepayment (other than the Specified   Mandatory Prepayment) (such portion of mandatory prepayment, the “Declined   Amount”). The Declined Amount shall be applied to the loans held by the   non-Declining Lenders, at their election, and to the extent there is any   excess of the Declined Amount remaining after such application, it may be   applied as a mandatory prepayment under the Amended Existing Prepetition   Credit Agreement to the extent the mandatory prepayment declined by the   Declining Lenders is a required mandatory prepayment under the Amended   Existing Prepetition Credit Agreement. Prepayment Premium: All (i) voluntary   prepayments of Exit Term Loans, (ii) mandatory prepayments of Exit Term Loans   (excluding (x) mandatory prepayments required in connection with   Extraordinary Receipts (as defined in the Existing Prepetition Credit   Agreement), (y) mandatory prepayments described in Section 2.04(b)(i) of the   Existing Prepetition Credit Agreement, and (z) Specified Mandatory   Prepayments), (iii) voluntary prepayments of the Exit Revolving Loans (up to   any permanent reduction of the commitments under the Exit Revolving Facility)   and Annex B-8 

    

 

(iv) any   Insolvency Event (to be defined in the Exit Loan Documents) or acceleration   of the Exit Loans, in each case of the foregoing clauses (i)-(iii), shall be   accompanied by a premium (expressed as a percentage of the principal amount   of such Exit Loans to be prepaid) equal to (a) on and prior to the first   anniversary of the DIP Facilities Closing Date, 2.00% and (b) following the   first anniversary of the DIP Facilities Closing Date but on and prior to the   second anniversary of the DIP Facilities Closing Date, 1.00% and (c)   thereafter, 0%; provided, however, that in the event that a Lender or   Lenders, whose commitments individually or in the aggregate account for at   least 10% of the Exit Revolving Credit Facility, fail to timely fund a   borrowing request under the Exit Revolving Credit Facility (“Defaulting   Lenders”), within ten (10) Business Days after the borrowing date set forth   in such borrowing request (such period the “Exit Loan Option Period”), the   non-Defaulting Lenders have an option, but not an obligation, to either (A)   assume such Defaulting Lender’s interests, rights and obligations under the   Exit Facility by way of an assignment and fund such request or (B) assign   such Defaulting Lender’s interests, rights and obligations under the Exit   Facility to another financial institution, reasonably acceptable to the   Borrower, which financial institution, upon execution of an assignment   agreement, shall fund such borrowing; provided further, that in the event   that the non-Defaulting Lenders fail or opt not to exercise their option to   assume or assign such Defaulting Lender’s interests, rights and obligations   under the Exit Facility within the Exit Loan Option Period, the Borrower may   voluntarily prepay and terminate the Exit Revolving Loans (provided that, if   the Borrower opts to voluntarily prepay the Exit Revolving Loans and   terminate the Exit Revolving Credit Facility, (a) from and after the first   day after the Exit Loan Option Period has expired and up to and including the   date which is ninety (90) days thereafter, no prepayment premium shall be   owed with respect to the repayment and termination of the Exit Revolving   Loans; and (b) no consent of the Required Lenders or any other Person or   group, under the Intercreditor Agreement or otherwise, shall be required to   prepay the Exit Revolving Loans and terminate the Exit Revolving Credit   Facility , if so prepaid and terminated by the Borrower during the period set   forth in the immediately preceding clause (a)). Use of Proceeds: DIP   Facilities: To refinance the Existing Prepetition Revolving Credit Facility,   to pay related transaction fees and expenses and for working capital and   general corporate purposes. Exit Facilities: To refinance the DIP Facilities,   to pay related transaction fees and expenses and for working capital and   general corporate purposes. Collateral for DIP Facilities: All obligations   and liabilities under the DIP Facilities shall be secured by a first priority   perfected lien and security interest pursuant to Sections 364(c)(2),   364(c)(3) and 364(d)(1) of the Bankruptcy Code in substantially all of the   Credit Parties’ assets and property of the estate (as defined in the   Bankruptcy Code), whether real, personal, tangible, or intangible, and   wherever located (all such Annex B-9 

    

 

security being   the “DIP Collateral”), including but not limited to, collateral assignment of   all Material Contracts (as defined in the Existing Prepetition Credit   Agreement) (provided that no third party consents to such assignment will be   required), the proceeds of all leasehold interests, purchase options, if any,   and further all cash and cash equivalents, deposit accounts, accounts   receivable, contract rights, equipment, inventory, and owned and leased real   property, fixtures, general intangibles, payment intangibles, contract   rights, chattel paper, instruments, investment property, commercial tort   claims, causes of action under Chapter 5 of the Bankruptcy Code (subject to   entry of the Final DIP Order), trademarks, copyrights, patents and other   intellectual property and all other tangible and intangible assets of every   type and nature, whether now existing or hereafter created, acquired, or   arising, and all proceeds thereof. DIP Collateral shall also include a pledge   of 100% of the issued and outstanding ownership interests in each Credit   Party (including, until the merger of Ascent Capital Group, Inc. (the   “Parent”) with the Borrower (the “Proposed Merger”), a non-recourse pledge of   the ownership interest in the Borrower from the Parent), but excluding more   than 66 2/3% of the equity of any foreign subsidiary to the extent that the   Borrower and the Required Lenders reasonably determine that any change in U.S.   tax law after the Closing Date would result in materially adverse tax   consequences to the Credit Parties taken as a whole. The Interim Order and   the Final DIP Order shall provide that the first priority security interests   and liens granted in favor of the Agent and the DIP Lenders shall “prime” the   liens on all of the assets of the Credit Parties (including all liens   securing obligations under the Credit Parties' prepetition credit   facilities), other than permitted liens under the DIP Credit Agreement. In addition,   the obligations under the DIP Facilities shall constitute claims entitled to   super-priority administrative expense claim status in accordance with   Sections 364(c)(1) and 507(b) of the Bankruptcy Code, with priority in   payment over any and all other administrative expenses in the Bankruptcy   Cases of the kinds specified or ordered pursuant to any provision of the   Bankruptcy Code, subject only to (A) the payment of allowed professional fees   and disbursements incurred by the Companies and any official committees   appointed in the Bankruptcy Cases, in an aggregate amount not to exceed an   amount to be agreed (the ”Professional Expense Cap”), provided that (x)   during the continuance of an event of default under the DIP Loan Documents or   a default by any Credit Party of its obligations under any DIP Order, any   payments actually made to such professionals during such continuance shall   reduce the Professional Expense Cap on a dollar-for-dollar basis and (y) for   the avoidance of doubt, so long as no event of default under the DIP Loan   Documents or default by any Company Party of its obligations under any DIP   Order shall have occurred and be continuing, payments made to such   professionals shall not reduce the Professional Expense Cap, and (B) the   payment of fees pursuant to 28 U.S.C. § 1930 (collectively, the “Carve-Out   Expenses”). Annex B-10 

    

 

Collateral for   Exit Facilities: All obligations and liabilities under the Exit Facilities   shall be secured by a first priority perfected lien and security interest in   all of the Credit Parties’ assets and property, whether real, personal,   tangible, or intangible, and wherever located (all such security being the   “Exit Collateral”), including but not limited to, collateral assignment of   all Material Contracts (provided that no third party consents to such   assignment will be required), the proceeds of all leasehold interests,   purchase options, if any, and further all cash and cash equivalents, deposit   accounts, accounts receivable, contract rights, equipment, inventory, owned   and leased real property, fixtures, general intangibles, payment intangibles,   contract rights, chattel paper, instruments, investment property, commercial   tort claims, trademarks, copyrights, patents and other intellectual property   and all other tangible and intangible assets of every type and nature,   whether now existing or hereafter created, acquired, or arising, and all   proceeds thereof. Exit Collateral shall also include a pledge of 100% of the   issued and outstanding ownership interests in each Credit Party other than   the Borrower (but excluding more than 66 2/3% of the equity of any foreign   subsidiary to the extent that the Borrower and the Required Lenders   reasonably determine that any change in U.S. tax law after the Closing Date would   result in materially adverse tax consequences to the Credit Parties taken as   a whole). At all times (but solely in the case of the DIP Facilities, on and   after the 30th day following the Filing Date), all collections of the Credit   Parties shall be deposited in deposit accounts subject to deposit account   control agreements reasonably satisfactory to the Agent and Structuring   Advisor (collectively, the “Blocked Accounts”); provided that the Credit   Parties shall not be required to enter into any control agreement in respect   of (a) payroll and similar accounts, (b) deposit or securities accounts the   balance of which individually and in the aggregate at all times are less than   an amount to be agreed or (c) other accounts to be agreed (collectively, the   “Excluded Accounts”). Upon the occurrence and during the continuance of an   event of default, all funds deposited in the Blocked Accounts shall be   transferred to a deposit account designated by the Structuring Advisor on   each business day and applied to repay the outstanding obligations under the   Credit Facilities in the order and manner to be determined. The cash   management system of the Credit Parties shall be otherwise maintained in a   manner reasonably satisfactory to the Structuring Advisor. Cash Management: Representations   and Warranties: In the case of each Credit Facility, substantially consistent   with the Existing Prepetition Credit Agreement but subject to the   Documentation Principles. Affirmative Covenants: In the case of each Credit   Facility, substantially consistent with the Existing Prepetition Credit   Agreement but subject to the Documentation Principles. In the case of the DIP   Facilities, covenants to include an obligation to deliver certain items   (including copies of pleadings, motions, applications and other documents   Annex B-11 

    

 

filed with the   Bankruptcy Court or distributed to any official committee appointed in the   Chapter 11 Cases). Negative Covenants: In the case of each Credit Facility,   substantially consistent with the Existing Prepetition Credit Agreement but   subject to the Documentation Principles. In addition, the DIP Loan Documents   will include, among other covenants: reporting with respect to financial   matters (including, without limitation, from and after the Filing Date,   updates to the Budget (such updates to the approved by the Structuring   Advisor)), limitations on payment of any pre-petition indebtedness other than   payments set forth in the Budget which have been approved by the Bankruptcy   Court, the Budget Covenant (as defined below) and covenants requiring periodic   updates as to the status of the milestones set forth on Exhibit A (the   “Reorganization Milestones”). “Budget” means a budget (in form and substance   reasonably acceptable to the Structuring Advisor), depicting on a weekly   basis cash revenue, receipts, expenses, disbursements and other information   for the first 13 weeks from the DIP Facilities Closing Date or the date any   such updates to the Budget are delivered, as applicable. Budget Covenant: The   Companies shall not (a) pay any expenses or make any other operating   disbursements (exclusive of (x) professional fees and restructuring charges   arising on account of the Bankruptcy Cases (including Chapter 11 Trustee fees   and professional fees and expenses incurred by the Agent, the Structuring   Advisor and/or the DIP Lenders) and (y) disbursements made on account of   prepetition claims pursuant to any customary first day orders) other than as   set forth in the Budget (subject to a 15% aggregate variance during the   period ending with the third full calendar week after the Filing Date, and   thereafter for any rolling four-week period) or (b) permit aggregate cash   receipts, for any time period, to be less than the levels set forth in the   Budget for the corresponding period (subject to a 15% aggregate variance   during the period ending with the third full calendar week after the Filing   Date, and thereafter for any rolling four-week period). Such covenant shall   be measured weekly (i) for the 3 consecutive full week period ending on the   third Friday following the Filing Date and (ii) for each week ending   thereafter, on a rolling four-week basis. Events of Default: In the case of   each Credit Facility, consistent with the Existing Prepetition Credit   Agreement but subject to the Documentation Principles. In addition, in the   case of the DIP Facilities, the following events of default, among others,   shall be included: (a) unless consented to by the Required Lenders, payment   of any pre-petition indebtedness other than payments in compliance with the   Budget Covenant and which have been approved by the Bankruptcy Court or   pursuant to any confirmed Plan of Reorganization; Annex B-12 

    

 

(b) the filing   of a motion by the Credit Parties seeking dismissal of any Bankruptcy Cases,   the dismissal of any of the Bankruptcy Cases, the filing of a motion by the   Credit Parties seeking to convert any of the Bankruptcy Cases to a case under   Chapter 7 of the Bankruptcy Code or the conversion of any of the Bankruptcy   Cases to a case under Chapter 7 of the Bankruptcy Code; (c) the filing of any   Credit Party of a motion seeking the appointment in any of the Bankruptcy   Cases of (i) a Chapter 11 trustee or (ii) an examiner with expanded powers   (beyond those set forth under Sections 1106(a)(3) and (4) of the Bankruptcy   Code) or the entry of any order of the Bankruptcy Court granting such relief;   (d) except with respect to the Carve-Out, the grant of any super-priority   administrative expense claim or any lien which is pari passu with or senior   to those of the Agent and the DIP Lenders, or the authorization to use cash   collateral without the consent of the DIP Lenders; (e) the grant of relief   from the automatic stay to permit enforcement of rights by any other party   with respect to any assets of any Credit Party having a value in an amount   equal to or exceeding an amount to be agreed upon; (f) any Credit Party’s   board of directors shall authorize the liquidation of such Credit Party’s   business pursuant to one or more Section 363 sales or otherwise, or shall   file any motion under Section 363 of the Bankruptcy Code seeking approval to   liquidate all or substantially all of the assets of the Credit Parties, other   than as consented to by the Required Lenders; (g) failure of any Credit Party   to comply with the terms of the Interim Order or the Final DIP Order; (h)   failure of the Final DIP Order to be entered in the Bankruptcy Cases within   45 days after the Filing Date; (i) failure to timely achieve any   Reorganization Milestone (subject to any agreed upon cure period); (j) the   (A) amendment, modification, reversal, revocation, issuance of a stay or   order to vacate or supplementing of the Interim Order, the Final DIP Order,   or any other order of the Bankruptcy Court, in any way adversely affecting or   relating to the DIP Facilities or the claims of Agent, the Structuring   Advisor and the DIP Lenders, in a manner not acceptable to the Structuring   Advisor and DIP Lenders, (B) material amendment, modification or   supplementing of the Plan Documentation Annex B-13 

    

 

(as defined   below) in any manner not reasonably acceptable to the Structuring Advisor or   the DIP Lenders to the extent any such material amendment, modification or   supplement adversely affects any Credit Facility or the claims of the Agent,   the Structuring Advisor, the DIP Lenders or the Exit Lenders, or (C) waiver   of any condition precedent to confirmation of the Plan of Reorganization or   effective date of the Plan of Reorganization in any manner not reasonably   acceptable to the Structuring Advisor or any DIP Lender to the extent that   any such waiver adversely affects any Credit Facility or the claims of the   Agent, the Structuring Advisor, the DIP Lenders or the Exit Lenders; (k) the   solicitation, filing and/or seeking of confirmation by the Borrower of any   Plan of Reorganization and disclosure statement that does not provide for   repayment in full, in cash, of all outstanding amounts under the DIP   Facilities at the time of the consummation of such Plan of Reorganization;   (l) if any Plan Documentation is executed, filed or delivered which is not   (i) in form and substance reasonably acceptable to the Required Lenders in   respect of the treatment of the claims of the Agent, the Structuring Advisor   and the DIP Lenders or (ii) otherwise in form and content reasonably   acceptable to the Required Lenders; and (m)if the Confirmation Order is   entered in form and substance which is not (i) reasonably acceptable to the   Required Lenders in respect of the treatment of the claims of the Agent and   the DIP Lenders or (ii) otherwise reasonably acceptable to the Structuring   Advisor. Assignments: The Lenders may sell, transfer, negotiate or assign to   one or more of their affiliates or one or more banks, financial institutions,   or other entities that are eligible assignees (as defined in the applicable   Loan Documents) (other than Disqualified Lenders absent an event of default)   a portion of its loans, rights and obligations under the Loan Documents,   subject to the prior written consent of the Structuring Advisor and, unless   an event of default has occurred and is continuing, the Borrower, and   compliance with other limitations to be set forth in the applicable Loan   Documents. The Lenders will also have rights to sell participations to   persons (other than Disqualified Lenders absent an event of default), subject   to customary limits on voting rights. Assignments to affiliates of the   Company shall not be permitted. Voting: Amendments and waivers of each of the   DIP Revolving Credit Facility, Exit Term Loan Facility and Exit Revolving   Credit Facility, will require the approval of Lenders holding more than 50%   of the aggregate amount of the loans and commitments under the facilities;   provided that agent, all lender, or affected lender consent shall be required   for certain customary amendments and waivers, including but not limited to,   (a) the consent of each Lender directly and adversely affected Annex B-14 

    

 

thereby shall   be required with respect to (i) increases in commitments, (ii) reductions of   principal (it being understood that a waiver of any condition precedent or   the waiver of any default, event of default or mandatory prepayment shall not   constitute a reduction in principal), interest (other than a waiver of   default interest) or fees, (iii) extensions of scheduled amortization or   final maturity of loans or commitments or extensions of time of payment for   interest or fees and (iv) changes in pro rata sharing provisions and the   “waterfall” and (b) the consent of 100% of the Lenders shall be required with   respect to (i) modifications to any of the voting percentages and (ii) a   release of all or substantially all of the guarantees or collateral. Funding   Protection: Customary for transactions of this type, including breakage   costs, gross-up for withholding, compensation for increased costs and   compliance with capital adequacy and other regulatory restrictions. Taxes,   Reserve Requirements and Indemnities: All payments are to be made free and   clear of any taxes (other than franchise taxes and taxes on overall net   income), imposts, assessments, withholdings or other deductions whatsoever.   Foreign Lenders shall furnish to the Agent appropriate certificates or other   evidence of exemption from U.S. federal tax withholding. The Company will   indemnify the Lenders against all increased costs of capital resulting from   reserve requirements or otherwise imposed, in each case subject to customary   increased costs, capital adequacy and similar provisions to the extent not   taken into account in the calculation of the Base Rate or LIBOR. Brokers’   Fees: The Company will agree to assume obligations to pay broker fees (to the   extent applicable), and the Company will agree to indemnify KKR and any   Additional Lender and hold KKR or such Additional Lender harmless from and   against any claim of any other broker or finder arising out of any   transaction or any commitment issued to the Company. Indemnification;   Expenses: Substantially consistent with the Existing Prepetition Credit   Agreement, subject to the Documentation Principles. Choice of Law; Jurisdiction:   The Loan Documents will be governed by and construed in accordance with the   laws of the State of New York, except (i) with respect to security documents,   to the extent the creation and/or perfection of a security interest is   governed by the laws of a different state of the United States, the Interim   Order or the Final DIP Order and (ii) as governed by the Bankruptcy Code. The   Credit Parties will submit to the non-exclusive jurisdiction and venue of the   federal and state courts of the State of New York and shall waive any right   to trial by jury. To the extent that the Bankruptcy Cases are pending, the   Bankruptcy Court shall have exclusive jurisdiction related any disputes   related to the Credit Facilities. Annex B-15 

    

 

Counsel to the   Structuring Advisor: Proskauer Rose LLP Counsel to the Lenders (other than   KKR) and the Ad Hoc Lender Group: Jones Day Counsel to the Agent: To be   determined Public Announcement: Upon closing, the Structuring Advisor may, at   its own expense, issue news releases and publish “tombstone advertisements”   and other customary announcements in newspapers, trade journals, and other   appropriate media (collectively, “Trade Announcements”) and disclose such   other information in accordance with the confidentiality provisions of the   Loan Documents and no Credit Party shall issue any Trade Announcement prior   to or after the DIP Facilities Closing Date except (i) to the extent required   by applicable law, regulation, legal process or the rules of a national securities   exchange or (ii) with the prior consent of the Structuring Advisor (such   consent not to be unreasonably withheld or delayed); provided, that the   Credit Parties may issue a Trade Announcement that announces the closing of   the Credit Facilities without identifying the names of the Agent, the   Structuring Advisor and the Lenders or any economic terms of the Credit   Facilities. Annex B-16 

    

 

Exhibit A   Milestones for Reorganization Plan and Disclosure Statement Date Milestone   Filing Date Filing by the Borrower of the Plan of Reorganization and related   disclosure statement requiring payment in full of the obligations under the   DIP Facilities in cash (including cash collateralization of Letters of Credit   if applicable) upon the effectiveness of such Plan of Reorganization, and   otherwise in form and substance reasonably acceptable to and the Required   Lenders. Earlier of (i) the date set for the Plan Milestone in the   Restructuring Support Agreement and (ii) the date that is 75 days following   the Filing Date Entry of an order confirming such Plan of Reorganization by   the Bankruptcy Court (the “Plan Milestone”) Earlier of (i) the date set for   the Exit Milestone in the Restructuring Support Agreement and (ii) the date   that is 120 days following the Filing Date Effectiveness of such Plan of   Reorganization (the “Exit Milestone”) * Any of the above mentioned dates may   be extended with the prior written consent of the Required Lenders. Exhibit   A-1 

    

 

Exhibit B   Conditions Precedent to the DIP Facilities Closing Date The fulfillment, to   the satisfaction of the Required Lenders, of each of the following conditions   precedent: A) The Filing Date shall have occurred on or prior to June 30,   2019; B) The Bankruptcy Court shall have entered an order, in form and   substance reasonably satisfactory to the Required Lenders approving the   transactions and fees outlined in the Commitment Letter and the Fee Letter   and granting the priority liens and administrative expense claims referred to   therein (as amended, modified or otherwise supplemented from time to time in   accordance with the terms hereof, the “Interim Order”), which Interim Order   shall (i) be in full force and effect and shall not have been vacated,   modified, amended (without the express written consent of the Required   Lenders), reversed, overturned or stayed in any respect, and (ii) provide for   the payment in full, in cash of all obligations under the Existing   Prepetition Revolving Credit Facility; C) All amounts due under the Existing   Prepetition Revolving Credit Facility shall have been paid in full, in cash,   and all commitments relating thereto shall have been terminated; D) All filed   “first day” pleadings and “first day” orders filed on the Filing Date which   relate to the DIP Facilities shall be reasonably acceptable in form and   substance to the Required Lenders. All other filed “first day” pleadings and   “first day” orders filed on the Filing Date shall not be adverse to the   Agent’s or the DIP Lenders’ interests or inconsistent, in any material   respect, with the terms of the DIP Loan Documents; E) The Interim Order shall   provide that all obligations of the Credit Parties with respect to the DIP   Loan Documents are secured by valid, enforceable and non-avoidable first   priority liens and security interests in the DIP Collateral subject only to   Permitted Liens (to be defined in the DIP Loan Documents) and the Carve-Out   on the terms set forth in the DIP Loan Documents; F) The Plan of   Reorganization and all documentation, including without limitation any   amendments, any subsequent plans of reorganization, the Plan Documents (as   defined in the Plan of Reorganization or such other similar term used in the   Plan of Reorganization), the Plan Supplement (as defined in the Plan of   Reorganization or such other similar term used in the Plan of Reorganization)   and/or the Confirmation Order (as defined below) (all of the foregoing being   collectively referred to as, the “Plan Documentation”), to be executed,   delivered or filed pursuant thereto shall be in form and substance reasonably   acceptable to the Required Lenders. Prior to the DIP Facilities Closing Date,   Borrower shall have solicited acceptances of the Plan of Reorganization from   the term loan lenders under the Existing Prepetition Credit Agreement (the   “Existing Term Loan Lenders”) and certain holders of the Senior Unsecured   Notes (as defined in the Existing Prepetition Credit Agreement) to accept the   Plan of Reorganization. The Borrower shall have received the requisite number   of votes accepting the Plan of Reorganization under Section 1126 of the   Bankruptcy Code from the Existing Term Loan Lenders, and the holders of the   Senior Unsecured Notes holding, in the aggregate, in excess of 662/3% of the   principal amount outstanding of all Senior Unsecured Notes shall have voted   to accept the Plan of Reorganization under Section 1126 of the Bankruptcy   Code. G) The Restructuring Support Agreement, which shall be in form and   substance reasonably Exhibit B-1 

    

 

satisfactory to   the Required Lenders, shall be in full force and effect and shall not have   been amended, modified or supplemented in a manner materially adverse to the   interests of the Agent or the DIP Lenders, and no Plan Support Party (as   defined in the Plan of Reorganization or such other similar term used in the   Plan) shall have withdrawn its support for or refused to abide by the terms   of the Restructuring Support Agreement; H) The negotiation, execution and   delivery of definitive documentation evidencing the DIP Facilities, a joinder   to the Existing Intercreditor Agreement, the Guaranties and the security   interests in the DIP Collateral (collectively, the “DIP Loan Documents”),   which DIP Loan Documents shall be prepared by counsel to KKR and shall be in   form and substance satisfactory to the Agent and the DIP Lenders, subject to   the Documentation Principles; I)The Agent and the Structuring Advisor shall   have received (i) a certificate of status with respect to each Credit Party,   dated within a recent date of the DIP Facilities Closing Date, such   certificate to be issued by the appropriate officer of the jurisdiction of   organization of such Credit Party, which certificate shall indicate that such   Credit Party is in good standing in such jurisdiction and (ii) certificates   of status (to the extent applicable) with respect to each Credit Party, dated   within a recent date from the DIP Facilities Closing Date, such certificates   to be issued by the appropriate officer of the jurisdictions (other than the   jurisdiction of organization of such Credit Party) in which its failure to be   duly qualified or licensed would constitute a Material Adverse Effect (as   defined in the Existing Prepetition Credit Agreement), which certificates   shall indicate that such Credit Party is in good standing in such jurisdictions;   J)The Agent and the Structuring Advisor shall have received certificates from   the Secretary of each Credit Party (i) attesting to the resolutions of such   Credit Party’s Board of Directors authorizing its execution, delivery, and   performance of the DIP Loan Documents to which such Credit Party is a party,   (ii) authorizing specific officers of such Credit Party to execute the same,   (iii) attesting to the incumbency and signatures of such specific officers of   such Credit Party and (iv) certifying such Credit Party’s governing documents   as in effect or contemplated to be in effect as of the DIP Facilities Closing   Date; K) The Agent and the DIP Lenders shall have received opinion(s) of   Credit Parties’ counsel with respect to certain customary corporate   housekeeping matters, enforceability of the DIP Loan Documents, no conflicts   with organizational documents and federal, Texas or New York law, no required   consents or approvals under federal, Texas or New York law or Delaware   organizational statutes, based upon a review of the Bankruptcy Court docket,   the Interim Order has been entered by the Bankruptcy Court, and that no order   amending, granting re-argument with respect to, staying, vacating, rescinding   or reversing the Interim Order has been entered by the Bankruptcy Court,   creation and perfection of lien on UCC collateral and certificated securities   and no required registration under the Investment Company Act of 1940, and   otherwise in form and substance reasonably satisfactory to the Agent and the   Required Lenders; L) The Agent shall have received certificates of insurance   indicating the Credit Parties’ compliance with the terms of the DIP Loan   Documents, the form and substance of which shall be satisfactory to the Agent   and the Structuring Advisor; M) Since the date of the Commitment Letter, no   change, occurrence or development shall have occurred or become known to the   Companies that has had or could reasonably be expected to have a Material   Adverse Effect other than the filing of the Bankruptcy Cases and the events   that typically result from the filing of a case under Chapter 11 of the   Bankruptcy Code; Exhibit B-2 

    

 

N) The Agent,   the Structuring Advisor and the DIP Lenders shall have received all necessary   Patriot Act compliance information, the results of which are reasonably   satisfactory to the Structuring Advisor, the Agent and the DIP Lenders in   their sole discretion, in each case requested by the Structuring Advisor, the   Agent or such DIP Lender in writing at least five (5) business days prior to   the DIP Closing Date; O) The Agent and the DIP Lenders shall have received   the Budget, and the Required Lenders shall have approved the Budget; P)   Borrower shall have paid all fees and expenses of the Structuring Advisor,   the Agent and DIP Lenders required to be paid under the Fee Letter and the   DIP Loan Documents; and Q) The DIP Facilities Closing Date shall have occurred   on or before the date that is three business days after the date of entry of   the Interim Order. Exhibit B-3 

    

 

Exhibit C   Conditions Precedent to the Exit Facilities Closing Date The fulfillment, to   the satisfaction of the Required Lenders, of each of the following conditions   precedent: A) The Exit Facilities Closing Date shall have occurred on or   prior to the due date for the Exit Milestone; B) Any amendment, modification   or supplement to the Plan Documentation shall be on terms and conditions   reasonably satisfactory to the Required Lenders and all Plan Documentation to   be executed, delivered or filed pursuant to the Plan of Reorganization shall   be in form and substance reasonably acceptable to the Required Lenders and   such Plan Documentation shall have been executed, delivered or filed, as the   case may be; C) (i) The Plan of Reorganization shall have been confirmed by   the Bankruptcy Court pursuant to a confirmation order, in form and substance   reasonably satisfactory to the Required Lenders (the “Confirmation Order”);   (ii) the Confirmation Order shall be a Final Order and shall not have been   modified or vacated on appeal and, unless otherwise agreed to by the Required   Lenders (such consent not to be unreasonably withheld), at least 10 days   shall have passed since the entry of the Confirmation Order, the Confirmation   Order shall have been entered upon proper notice to all parties to be bound   by the Plan of Reorganization, all as may be required by the United States   Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and any applicable   local bankruptcy rules, and the Confirmation Order shall have become a Final   Order; (iii) all conditions precedent to the effectiveness of the Plan of   Reorganization shall have been satisfied (or, with the prior written consent   of the Required Lenders, waived) in the reasonable judgment of the Required   Lenders and (iv) except as consented to by the Required Lenders, the   Bankruptcy Court’s retention of jurisdiction under the Confirmation Order   shall not govern the enforcement of the Exit Loan Documents or any rights or   remedies related thereto; D) All pre-petition indebtedness and other claims   against the Borrower shall have been paid as provided for in the Plan of   Reorganization, and all amounts due under the DIP Facilities shall have been   paid in full, in cash (other than with respect to letters of credit which   shall be deemed issued under the Exit Revolving Credit Facility), and all   commitments relating to the DIP Facilities shall have been terminated; E) All   obligations of the Credit Parties with respect to the Exit Loan Documents are   secured by valid, enforceable and non-avoidable first priority liens and   security interests in the Exit Collateral, subject only to Permitted Liens   (to be defined in the Exit Loan Documents); F) The capital structure of the   Reorganized Companies shall be substantially consistent with the capital   structure set forth in the Plan of Reorganization and Plan Supplement; G) The   negotiation, execution and delivery of definitive documentation evidencing   the Exit Facilities, the Exit Intercreditor Agreement in form and substance   reasonably satisfactory to the Required Lenders, the Guaranties and the   security interests in the Exit Collateral (collectively, the “Exit Loan   Documents” and together with the DIP Loan Documents, the “Loan Documents”),   which Exit Loan Documents shall be prepared by counsel to KKR and shall be in   form and substance satisfactory to the Structuring Advisor, the Agent and the   Exit Lenders, subject to the Documentation Principles. Exhibit C-1 

    

 

H) Agent and   the Structuring Advisor shall have received (i) a certificate of status with   respect to each Credit Party, dated within a recent date from the Exit   Facilities Closing Date, such certificate to be issued by the appropriate   officer of the jurisdiction of organization of such Credit Party, which   certificate shall indicate that such Credit Party is in good standing in such   jurisdiction and (ii) certificates of status with respect to each Credit Party,   dated within a recent date from the Exit Facilities Closing Date, such   certificates to be issued by the appropriate officer of the jurisdictions   (other than the jurisdiction of organization of such Credit Party) in which   its failure to be duly qualified or licensed would constitute a Material   Adverse Effect, which certificates shall indicate that such Credit Party is   in good standing in such jurisdictions; I)Agent and the Structuring Advisor   shall have received certificates from the Secretary of each Credit Party (i)   attesting to the resolutions of such Credit Party’s Board of Directors   authorizing its execution, delivery, and performance of the Exit Loan   Documents to which such Credit Party is a party, (ii) authorizing specific   officers of such Credit Party to execute the same, (iii) attesting to the   incumbency and signatures of such specific officers of such Credit Party and   (iv) certifying such Credit Party’s Governing Documents as in effect or   contemplated to be in effect as of the Exit Facilities Closing Date; J)Agent   and the Structuring Advisor shall have received opinion(s) of Credit Parties’   counsel in form and substance reasonably satisfactory to the Required   Lenders; K) All actions, authorizations, filings, consents and regulatory   approvals required, if any, shall have been obtained, effected or executed in   a manner reasonably acceptable to the Required Lenders; L) The Exit   Facilities shall have received public ratings (but no specific rating) from   each of Standard & Poor’s Ratings Group, a Standard & Poor’s   Financial Services Business and Moody’s Investors Service, Inc.; M) Agent and   the Structuring Advisor shall have received certificates of insurance   indicating the Credit Parties’ compliance with the terms of the Exit Loan   Documents, the form and substance of which shall be reasonably satisfactory   to the Required Lenders; N) The Agent shall have completed its updated UCC   and tax lien searches, in each case, the results of which, in each case,   shall be reasonably satisfactory to the Required Lenders; O) The Agent and   KKR shall have received (i) completed reference checks with respect to all   new members of each Credit Party’s senior management, the results of which   are reasonably satisfactory to the Agent and the Required Lenders, and (ii)   all necessary Patriot Act compliance information and reports with respect to   all new members of each Credit Party’s senior management, the results of   which are satisfactory to Agent and the Exit Lenders in their sole   discretion; P) Since the date of the Commitment Letter, no change, occurrence   or development shall have occurred or become known to the Companies that has   had or could reasonably be expected to have a Material Adverse Effect other   than the filing of the Bankruptcy Cases and the events that typically result   from the filing of a case under Chapter 11 of the Bankruptcy Code; Q) A Final   Order, which may be the Confirmation Order, shall have been entered by the   Bankruptcy Court authorizing and approving the assumption by the Company of   each Material Contract; Exhibit C-2 

    

 

R) Borrower   shall have paid all fees and expenses of the Structuring Advisor, the Agent   and Exit Lenders required to be paid under the Fee Letter and the Exit Loan   Documents; and S) Agent and the Structuring Advisor shall have received duly   executed copies of an amendment to the Existing Prepetition Credit Agreement,   an amended and restated agreement thereof or any other agreement replacing or   refinancing such agreement, in form and substance reasonably satisfactory to the   Structuring Advisor (the “Amended Existing Prepetition Credit Agreement”).   Exhibit C-3 

    

 

Exhibit D   Changes to the Existing Prepetition Credit Agreement Exhibit D-1 Provision of   the Existing Prepetition Credit Agreement Changes to be made to each Credit   Facility Definition of Permitted Holders The definition of “Permitted   Holders” for purposes of a Change of Control (as defined in the Existing   Prepetition Credit Agreement) shall include any person that beneficially owns   greater than 15% of the Equity Interests (as defined in the Existing   Prepetition Credit Agreement) of the Borrower as of the Exit Facilities   Closing Date. Mandatory Prepayments: Section 2.04(b)(ii) - Reinvestment right   capped at $50 million per fiscal year and $100 million in the aggregate In   addition to the mandatory prepayment events in the Existing Prepetition   Credit Agreement, the following mandatory prepayment (the “Specified   Mandatory Prepayment”) shall be required: •Borrowing Base: Prepayments in an   amount equal to the extent that the aggregate principal balance of the   applicable Term Loan and Revolving Loans and the Letters of Credit exceed the   Borrowing Base. Sections 2.15-2.19 To be deleted in their entirety along with   related definitions and other related provisions in the Existing Prepetition   Credit Agreement Representations and warranties, covenants and events of   default Materiality thresholds to be agreed by the Company and the Required   Lenders Covenants Covenants regarding the following to be added to the Loan   Documents: •Restrictions on amendments and termination of any material alarm   monitoring contracts, material alarm monitoring purchase agreements and other   Material Contracts, in each case, that are materially adverse to the Agent,   the Structuring Advisor and the Lenders. •Restrictions on amendments to the   Amended Existing Prepetition Credit Agreement that are materially adverse to   the Agent, the Structuring Advisor and the Lenders. •The Borrower shall not   enter into or acquire any alarm monitoring agreement for which the monitoring   services provided to the customers thereunder are not freely assignable and   transferrable to a third-party; provided that the foregoing restriction shall   not apply to (i) alarm monitoring agreements generated under the Master Sales   and Services Agreement, dated as of July 14, 2017, between 

    

 

Exhibit D-2   Provision of the Existing Prepetition Credit Agreement Changes to be made to   each Credit Facility the Company and Nest Labs, Inc. (as amended, restated,   amended and restated, replaced (with Nest Labs, Inc. or any other affiliate   of Alphabet Inc.), supplemented or otherwise modified from time to time, the   “Nest Agreement”) and (ii) alarm monitoring agreements (excluding, for the   avoidance of doubt, alarm monitoring agreements generated under the Nest   Agreement) that represent, in the aggregate, less than 5% of the Eligible   RMR. •Quarterly lender calls and annual lender meetings upon request of the   Required Lenders. •The Borrower shall use commercially reasonable efforts to   deliver within 60 days of the Exit Facilities Closing Date executed copies of   access agreements with Iron Mountain and DocuSign (and any other party that   stores the alarm monitoring contracts of the Credit Parties). •At all times,   the Liquidity (defined as availability under the applicable Revolving Credit   Facility plus Qualified Cash (as defined below)) of the Credit Parties shall   not be less $25,000,000. The Loan Documents shall not contain any other   financial covenant. “Qualified Cash” means the amount of unrestricted cash   and cash equivalents of the Credit Parties that is in deposit accounts or in   securities accounts, or any combination thereof, which such deposit account   or securities account is subject to a control agreement and is maintained by   a branch office of the bank or securities intermediary located within the   United States. Section 6.01(b) Quarterly financials to be delivered for each   fiscal quarter (including the last fiscal quarter). Quarterly financials for   the last fiscal quarter of each fiscal year shall be delivered within 60 days   of the end of such fiscal quarter; provided, that, for the last fiscal   quarter of 2019, such financials shall be delivered within 75 days of the end   of such quarter. Section 6.02 Borrowing Base certificates to be delivered on   a monthly basis, as of the end of the month immediately following the month   of determination. Section 7.02(d) Existing Section 7.02(d) shall be deleted   and replaced with the 

    

 

1 Note to draft   – Will be a new facility, not an amendment and restatement. Exhibit D-3   Provision of the Existing Prepetition Credit Agreement Changes to be made to   each Credit Facility following: Unsecured indebtedness; provided, that, after   giving effect to the incurrence of such indebtedness the total debt to EBITDA   ratio (to be defined in the Loan Documents) shall not be greater than the   Specified Ratio (as defined below). “Specified Ratio” shall mean (A) on or   prior to December 31, 2020, 4.50:1.00, (B) on and after January 1, 2021   through and including December 31, 2021, 4.25:1.00 and (C) thereafter,   4.00:1.00; provided, that, if the total debt to EBITDA covenant level then in   effect under the Amended Existing Prepetition Credit Agreement is lower than   the applicable ratio set forth above, the Specified Ratio shall mean the   total debt to EBITDA covenant level then in effect under the Amended Existing   Prepetition Credit Agreement. Section 7.02(l) Deleted in its entirety along   with related definitions and other related provisions in the Existing   Prepetition Credit Agreement Section 7.03(g) Permitted Acquisitions to be subject   to a $25,000,000 pro forma Liquidity test. Section 7.03(h) Permitted   Portfolio Purchases to be subject to a $25,000,000 pro forma Liquidity test   Section 7.06(f) Change “$25,000,000” to “$15,000,000”; such cap to be an   aggregate cap shared under Section 7.06(f) and new Section 7.18 set forth   below Also subject to a $50,000,000 pro forma Liquidity test Sections   7.11-7.12 To be deleted in their entirety along with related definitions and   other related provisions in the Existing Prepetition Credit Agreement Section   7.18 Existing Section 7.18 to be replaced with a covenant restricting   principal payments of indebtedness (other than (x) the Credit Facilities and   (y) capital leases); provided, that, the following payments shall be   permitted: (i) scheduled payments of principal under the Amended Existing   Prepetition Credit Agreement 1 in an aggregate amount not to exceed   $2,056,250 in any quarter and (ii) optional prepayments of such indebtedness   (each such optional prepayment subject to (x) a pro forma minimum Liquidity   test of 

    

 

Exhibit D-4   Provision of the Existing Prepetition Credit Agreement Changes to be made to   each Credit Facility $25,000,0000, and (y) no Event of Default before or   after giving effect to such payment). Restrictions on optional prepayments of   such indebtedness shall not apply to prepayments made with proceeds of equity   issuances or refinancings with permitted refinancing debt. For the avoidance   of doubt, no mandatory prepayment shall be made under the Amended Existing Prepetition   Credit Agreement other than with the Declined Amount. Section 8.01 Delivery   of borrowing base certificates shall not be subject to any grace period. The   following events of defaults to be added: •Cross-default to the Term B-2   Loans under the Amended Existing Prepetition Credit Agreement; provided,   that, the occurrence of any event of default under the Amended Existing   Prepetition Credit Agreement resulting solely from a breach of a financial   covenant thereunder shall only result in an event of default under the Loan   Documents if such event of default under the Amended Existing Prepetition   Credit Agreement has occurred and is continuing for more than 30 days. •(i)   Any Credit Party or any of its subsidiaries is enjoined, restrained or in any   way prevented by the order of any court or any governmental authority from   conducting all or any material part of its business for more than 15 days;   (ii) any Credit Party or any of its subsidiaries is not able to provide a   material portion of their subscribers with central monitoring services for a   period to be agreed upon; or (iii) any material portion of their subscribers   are not able due to an act of God to receive central monitoring services for   a period to be agreed upon, in each case of clauses (ii) and (iii), to the   extent such inability could reasonably be expected to have a Material Adverse   Effect •There shall occur and be continuing any “Event of Default” (or any   comparable term) under, and as defined in the documents evidencing or   governing any subordinated indebtedness, (ii) any of the obligations under   the Credit Facilities for any reason shall cease to be “Senior Indebtedness”   or “Designated Senior Indebtedness” (or any comparable terms) under, and as   defined in the documents 

    

 

Exhibit D-5   Provision of the Existing Prepetition Credit Agreement Changes to be made to   each Credit Facility evidencing or governing any subordinated indebtedness,   (iii) any indebtedness other than the obligations under the Credit Facilities   shall constitute “Designated Senior Indebtedness” (or any comparable term)   under, and as defined in, the documents evidencing or governing any   subordinated indebtedness, (iv) any holder of subordinated indebtedness shall   fail to perform or comply with any of the subordination provisions of the   documents evidencing or governing such subordinated indebtedness (including,   without limitation, any subordination agreement), or (v) the subordination   provisions of the documents (including, without limitation, any subordination   agreement) evidencing or governing any subordinated indebtedness shall, in   whole or in part, terminate, cease to be effective or cease to be legally   valid, binding and enforceable against any holder of the applicable   subordinated indebtedness 

    

 

EXHIBIT D   Takeback Exit Term Loan Facility Term Sheet 

    

 

MONITRONICS   INTERNATIONAL, INC. Takeback Exit Term Loan Facility Term Sheet1 Summary of   Principal Terms and Conditions Monitronics International, Inc. (the “Borrower”).   The Borrower’s existing and future direct and indirect subsidiaries and each   other party that executes a guaranty (excluding any foreign subsidiary to the   extent that the Borrower and the Administrative Agent determine that any   change to the U.S tax laws after the Closing Date would result in materially   adverse tax consequences to the Credit Parties taken as a whole)   (collectively, the “Guarantors” and together with the Borrower, the “Credit   Parties”). Borrowers Guarantors Administrative Agent A third party designated   by the Required Consenting Term Lenders and reasonably acceptable to the   Borrower (the “Administrative Agent”). Credit Facility Secured term loan   facility (the “Takeback Exit Term Loan Facility”), the holders thereof   referred to as the “Takeback Term Lenders”, comprised of term loans (the   “Takeback Exit Term Loan”) converted on a dollar-for-dollar basis from the   “Term Loans” under that certain Amended and Restated Credit Agreement, dated   as of March 23, 2012 (as amended through the date hereof, the “Existing   PrepetitionCredit Agreement”), among the Borrower, the guarantors party   thereto from time to time, the lenders party thereto from time to time and   Bank of America, N.A., as administrative agent, on the effective date of the   Takeback Exit Term Loan Facility (the “Effective Date”), in the principal   amount of $822,500,000.00. Takeback Exit Term Loans that are prepaid may not   be reborrowed. The Takeback Exit Term Loan Facility will be used to refinance   a portion of the “Term Loans” under the Existing Prepetition Credit Agreement   on the Effective Date. March 31, 2024 (the “Maturity Date”). A first priority   perfected lien on substantially all assets of the Credit Parties, including,   without limitation, a pledge of 100% of the issued and outstanding ownership   interests in each Credit Party other than the Borrower (but excluding more   than 66 2/3% of the equity of any foreign subsidiary to the extent that the   Borrower and the Administrative Agent reasonably determine that any change in   U.S. tax law after the Closing Date would result in materially adverse tax   Use of Proceeds Maturity Collateral 1 Capitalized terms used herein but not   defined herein shall have the meaning ascribed thereto in the Restructuring   Term Sheet. 

    

 

consequences to   the Credit Parties taken as a whole), collateral assignments of all Material   Contracts (provided that no third party consents to such assignment will be   required) and deposit account control agreements, other than certain baskets   and exclusions substantially consistent with the Existing Prepetition Credit   Agreement and the New Exit Facilities and with any modifications reasonably   satisfactory to the Required Consenting Term Lenders and the Borrower (the   “Collateral”), secured on a pari passu basis with the New Exit Facilities,   which shall be satisfied on a “first-out” basis, subject to the Intercreditor   Agreement (hereafter defined). As used herein, “Intercreditor Agreement”   shall mean an intercreditor agreement establishing ranking and intercreditor   arrangements with respect to the Collateral reasonably satisfactory to the   Required Consenting Term Lenders, which shall provide for, among other   things, all enforcement actions shall require the consent of both a majority   of the Takeback Exit Term Lenders and a majority of the lenders under the New   Exit Facility. Usual and customary for facilities of this type, including,   without limitation, the following: Conditions to Effectiveness A. Customary   definitive documentation in connection with the New Exit Facility and the   Intercreditor Agreement, all of which shall be subject to the reasonable   satisfaction of the Required Consenting Term Lenders. The negotiation,   execution and delivery of definitive documentation in respect of the Takeback   Exit Term Loan Facility consistent with the terms set forth herein, and as   otherwise reasonably satisfactory to the Required Consenting Term Lenders,   the Borrower and the Administrative Agent (the “Takeback Exit TermLoan   Financing Documentation”). The Restructuring shall have been consummated in   accordance with the Restructuring Support Agreement (the “RSA”) (all   conditions set forth therein having been satisfied or waived in accordance   with the terms of the RSA), and substantial consummation of the RSA in   accordance with its terms shall have occurred contemporaneously with the   closing of the Takeback Exit Term Loan Facility and such closing shall have   occurred not later than the Outside Date (as defined in the RSA). The   Required Consenting Term Lenders shall be reasonably satisfied that, on the   Effective Date, immediately after giving effect to the consummation of the   Restructuring, the conversion of the Term Loans to occur on the Effective   Date and any other transactions to occur on the Effective Date, the Credit   Parties and their subsidiaries shall have outstanding no indebtedness other   than (i) indebtedness outstanding under the Takeback Exit Term B. C. - 2 - 

    

 

Loan Facility,   (ii) the New Exit Facility, (iii) capital leases and other ordinary course   indebtedness and (iv) any additional indebtedness on terms and conditions   (including as to amount) reasonably satisfactory to the Required Consenting   Term Lenders and, if such additional indebtedness is secured, subject to   intercreditor arrangements reasonably satisfactory to the Required Consenting   Term Lenders. Delivery of evidence that all required insurance policies are   in force and that the Administrative Agent has been named as lender’s loss   payee or additional insured, as applicable. Accuracy of representations and   warranties contained in the Takeback Exit Term Loan Financing Documentation   in all material respects (or, in the case of representations and warranties   that are qualified by materiality, in all respects) and absence of default   and event of default under the Takeback Exit Term Loan Financing   Documentation. Compliance with customary documentation conditions, including   the delivery of customary legal opinions and closing certificates (including   a customary solvency certificate), certification regarding beneficial   ownership, good standing certificates and certified organizational documents,   in each case, in form and substance reasonably satisfactory to the Required   Consenting Term Lenders and the Administrative Agent. The Administrative Agent   shall have a first priority perfected lien on all assets of the Credit   Parties constituting Collateral, other than Permitted Liens, subject in   priority of payment to the New Exit Facility which shall be subject to the   Intercreditor Agreement. Receipt by the Administrative Agent of reasonably   satisfactory results of customary lien searches. All requisite governmental   and third party approvals shall have been obtained, and there shall be no   litigation, governmental, administrative or judicial action against the   Credit Parties that could reasonably be expected to restrain, prevent or   impose materially burdensome restrictions on the Restructuring or the   Takeback Exit Term Loans. Delivery of all documentation and other information   required by bank regulatory authorities under applicable “know-your-customer”   and anti-money laundering rules and regulations, including without limitation   the Patriot Act and delivery of beneficial ownership certification for all   “legal entity customers” D. E. F. G. H. I. J. - 3 - 

    

 

under 31 C.F.R.   § 1010.230 to the extent requested in writing at least 5 business days prior   to the Effective Date. K.Payment by the Borrower on the Effective Date of all   reasonable and documented out-of-pocket expenses due and payable on the   Effective Date pursuant to the Takeback Exit Term Loan Financing   Documentation and invoiced no fewer than 2 business days prior to the   Effective Date. L. The Borrower shall use commercially reasonable efforts to   obtain a private corporate credit rating from S&P and a private corporate   family rating from Moody’s; provided, that this condition shall not require   any specific rating. M. The Required Consenting Term Lenders and the   Administrative Agent shall be reasonably satisfied with the flow of funds in   connection with the closing. N.Such other conditions precedent as the   Required Consenting Term Lenders and the Administrative Agent shall   reasonably require. Interest Rate Interest shall be paid in cash (“Cash   Interest”). Cash Interest on the Loans will accrue at LIBOR plus the   Applicable Margin. As used herein, the Applicable Margin means “6.50% per   annum”. As used herein, the term “LIBOR” will have a meaning customary and   appropriate for financings of this type, and the basis for calculating   accrued interest and the interest periods for loans bearing interest at LIBOR   will be customary and appropriate for financings of this type (which in no   event shall be less than 1.25%). Automatically during the continuance of a   payment or bankruptcy event of default, and at the request of the Required   Consenting Term Lenders during the continuance of any other event of default,   the loans and all other outstanding obligations will bear interest at an   additional 2.00% per annum above the interest rate otherwise applicable.   Commencing on the last day of the first full fiscal quarter ended after the   Effective Date, the Takeback Exit Term Loans shall be repayable in equal   quarterly installments in aggregate annual amounts equal to 1.0% per annum of   the original principal amount of the Takeback Exit Term Loans, with the   balance payable on the Maturity Date. The Takeback Exit Term Loans may be   optionally prepaid at any time in whole or in part from time to time at the   option of the Borrower at Scheduled Amortization Optional Prepayments - 4 - 

    

 

par with no   prepayment premium, subject to customary breakage costs if applicable.   Subject to the terms of the Intercreditor Agreement while the New Exit   Facility is outstanding, the Takeback Exit Term Loans shall be prepaid with:   (i) 100% of the net cash proceeds of any asset sales or casualty or   condemnation events (subject to reinvestment rights, baskets and other   customary exclusions substantially consistent with the terms of the Existing   Prepetition Credit Agreement and with any modifications as reasonably   satisfactory to the Required Consenting Term Lenders and the Borrower); (ii)   50% of Excess Cash Flow (to be defined in the Takeback Exit Term Loan   Financing Documentation substantially the same as the Existing Prepetition   Credit Agreement), no later than 5 business days after delivery of the   financial statements for each fiscal year of the Borrower (commencing with   the fiscal year ended 2020); provided, that, at the option of the Borrower,   the amount of such Excess Cash Flow prepayment shall be reduced on a   dollar-for-dollar basis by the amount of voluntary prepayments at or below   par (as permitted pursuant to the Takeback Exit Term Loan Financing   Documentation) of the Term Loans; and Mandatory Prepayments (iii)100% of the   proceeds of debt incurrences permitted under the Takeback Exit Term   Documentation). To be substantially consistent with the terms (other than   debt Loan Financing of the Existing Representations and Warranties   Prepetition Credit Agreement and with any modifications as reasonably   satisfactory to the Required Consenting Term Lenders. To be substantially   consistent with the terms of the Existing Prepetition Credit Agreement and   with any modifications as reasonably satisfactory to the Required Consenting   Term Lenders. To be substantially consistent with the terms of the Existing   Prepetition Credit Agreement and the New Exit Facility, including without   limitation, a prohibition on additional senior or pari debt, restricted   payment, debt incurrence and other covenants to be sized to address   operational requirements, in each case to reflect the changes in the capital   structure and the credit profile of the Borrower and its subsidiaries since   the date of the Existing Prepetition Credit Agreement (which shall be no less   favorable to the Lenders than the covenants set forth in the New Exit   Facility), subject to customary baskets and exclusions, and with any other   modifications as reasonably satisfactory to the Required Consenting Term   Lenders. Affirmative Covenants Negative Covenants - 5 - 

    

 

The Takeback   Exit Term Loan Financing Documentation will contain the following financial   covenants: (a) Maximum Senior Secured Debt to RMR Ratio of 30.0x; (b) Maximum   Total Debt to EBITDA Ratio of 4.5x for each fiscal quarter ending on or prior   to December 31, 2020. with a stepdown to 4.25x for the fiscal quarters ending   on March 31, 2021 through December 31, 2021 and 4.0x beginning with the   fiscal quarter ending on March 31 2022 and for each fiscal quarter   thereafter; and (c) Minimum Liquidity: $25.0 million Financial Covenant   definitions (including the definition of EBITDA) to be substantially   consistent with the terms of the Existing Prepetition Credit Agreement (and   shall be no less favorable than the New Exit Facility, if applicable) and   with any modifications as reasonably satisfactory to the Required Consenting   Term Lenders; provided that revenue recognition and capital leases shall be   determined in accordance with GAAP as in effect as of September 30, 2016. To   be substantially consistent with the terms of the Existing Prepetition Credit   Agreement (and shall be no less favorable than the New Exit Facility, if   applicable) and with any modifications as reasonably satisfactory the   Required Consenting Term Lenders. To be substantially consistent with the   terms of the Existing Prepetition Credit Agreement and with any modifications   as reasonably satisfactory to the Required Consenting Term Lenders; provided,   that no Default or Event of Default shall result from delivery of an audit   opinion with qualification relating to upcoming maturities. To be   substantially consistent with the terms of the Existing Prepetition Credit   Agreement and with any modifications as reasonably satisfactory to the   Required Consenting Term Lenders. To be substantially consistent with the   terms of the Existing Prepetition Credit Agreement and with any modifications   as reasonably satisfactory to the Required Consenting Term Lenders. The   Takeback Exit Term Loan Financing Documentation will include customary   provisions regarding increased costs, illegality, tax indemnities, waiver of   trial by jury and other similar provisions. Customary for facilities of this   type. Financial Covenants Events of Default Financial and Other Reporting   Amendments and Voting Expenses and Indemnification Other Provisions   Assignments and Participations Governing Law State of New York. - 6 - 

    

 

EXHIBIT E Form   of Joinder The undersigned (“Joinder Party”) hereby acknowledges that it has   read and understands (the “Agreement”)1 by and the Restructuring Support   Agreement, dated as of among Monitronics International, Inc., (“Monitronics”)   and certain of its subsidiaries bound thereto, Ascent Capital Group, Inc.   (“Ascent”) and the Consenting Creditors and agrees to be bound by the terms   and conditions thereof to the extent the other Parties are thereby bound, and   shall be deemed a “Consenting Creditor” and [a “Consenting Noteholder”] [a   “Consenting Term Lender”] under the terms of the Agreement. The Joinder Party   specifically agrees to be bound by the terms and conditions of the Agreement,   a copy of which is attached to this Joinder as Annex 1 (as the same has been   or may hereafter be amended, restated, amended and restated, supplemented, or   otherwise modified from time to time in accordance with the terms hereof).   The Joinder Party hereby represents and warrants to each other Party to the   Agreement that, as of the date hereof, such Joinder 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,   Revolving Credit Loans, and/or Term Loans identified below its name on the   signature page hereto, and (b) makes, as of the date hereof, the   representations and warranties contained in the Agreement as of the date   hereof. This Joinder shall be governed by and construed in accordance with   the internal laws of the State of New York, without regard to any conflicts   of law provisions which would require the application of the law of any other   jurisdiction. All notices and other communications given or made pursuant to   the Agreement shall be sent to the Joinder Party at: Email: The Joinder Party   shall deliver a copy of this Agreement to counsel to the Company Parties,   counsel to the Ad Hoc Noteholder Group, counsel to the Ad Hoc Lender Group,   and counsel to Ascent. 1 Capitalized terms not used but not otherwise defined   herein shall have the meanings ascribed to such terms in the Agreement. 

    

 

Date Executed:   Name: Title: Aggregate Amounts Beneficially Owned or Managed on Account of:   Notes Revolving Credit Loans Term Loans 

    

 

EXHIBIT F   Provision for Transfer Agreement The undersigned (“Transferee”) hereby   acknowledges that it has read and understands (the “Agreement”),1 by and the   Restructuring Support Agreement, dated as of among Monitronics International   Inc., (“Monitronics”) and certain of its subsidiaries bound thereto, Ascent   Capital Group, Inc. (“Ascent”) and the Consenting Creditors, including the   transferor to the Transferee of any Company Claims (each such transferor, a   “Transferor”), and agrees to be bound by the terms and conditions thereof to   the extent the Transferor was thereby bound, and shall be deemed a   “Consenting Creditor” under the terms of the Agreement. The Transferee   specifically agrees to be bound by the terms and conditions of the Agreement,   a copy of which is attached to this Transfer Agreement as Annex 1 (as the   same has been or may hereafter be amended, restated, amended and restated,   supplemented, or otherwise modified from time to time in accordance with the   terms hereof). The Transferee hereby represents and warrants to each other   Party to the Agreement that, as of the date hereof, such Transferee (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, Revolving Credit Loans, and/or Term Loans identified below its name on   the signature page hereto, and (b) makes, as of the date hereof, the   representations and warranties contained in the Agreement as of the date   hereof, including the agreement to be bound by the vote of the Transferor if   such vote was cast before the effectiveness of the Transfer discussed herein.   This Transfer 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 provisions which would require the application of the law of any other   jurisdiction. All notices and other communications given or made pursuant to   the Agreement shall be sent to the Transferee at: Email: The Transferee shall   deliver a copy of this Transfer Agreement to counsel to the Company Parties,   counsel to the Ad Hoc Noteholder Group, counsel to the Ad Hoc Lender Group,   and counsel to Ascent. 1 Capitalized terms not used but not otherwise defined   herein shall have the meanings ascribed to such terms in the Agreement. 

    

 

Date Executed:   Name: Title: Aggregate Amounts Beneficially Owned or Managed on Account of:   Notes Revolving Credit Loans Term LoansExhibit 10.2

 

AMENDMENT NO. 7 TO FORBEARANCE AGREEMENT

 

This Amendment No. 7 to the Forbearance Agreement (this “Seventh Amendment”) is entered into as of May 15, 2019 by and between Monitronics International, Inc., a Texas corporation (the “Borrower”), each other Loan Party to the Credit Agreement, Bank of America, N.A., as administrative agent (in such capacity, the “Administrative Agent”) and certain Lenders party hereto (collectively, the “Parties”).

 

RECITALS

 

A.                               On April 1, 2019, the Parties entered into that certain Forbearance Agreement (as amended by Amendment No. 1, dated April 12, 2019, Amendment No. 2, dated April 24, 2019, Amendment No. 3, dated April 30, 2019, Amendment No. 4, dated May 3, 2019, Amendment No. 5, dated May 8, 2019, and Amendment No. 6, dated May 10, 2019, the “Forbearance Agreement”), under which the Required Lenders agreed to temporarily forbear on enforcement of the Specified Defaults, subject to the terms and conditions contained in the Forbearance Agreement.

 

B.                               The Forbearance Agreement contains a milestone that provides that no later than 5:00 p.m. (New York Time) on May 15, 2019 (the “RSA Deadline”), the Borrower shall have entered into a restructuring support agreement acceptable to holders of at least 50% of the outstanding Term B-2 Loans, in their sole discretion (the “RSA Milestone”). In the event that the RSA Milestone is not satisfied by the RSA Deadline, the Forbearance Period terminates pursuant to the terms of the Forbearance Agreement. In addition, the Forbearance Agreement provides that the Forbearance Termination Date is, among other things, May 15, 2019 (the “Outside Date”).

 

C.                               The Parties hereby desire to (1) further extend the RSA Deadline to no later than 5:00 p.m. (New York Time) on May 17, 2019 and (2) extend the Outside Date to May 17, 2019.

 

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

 

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

 

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

 

3.                                 Amendments.

 

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

 

“4.                                Forbearance. During the period (the “Forbearance Period”) commencing on the Forbearance Effective Date (as defined herein) and ending on the date (the “Forbearance  Termination Date”) which is the earliest to occur of (a) May 17, 2019, (b) the failure to meet any Milestone (as defined in Section 8 hereof); (c) the occurrence of any Default or Event of Default under the Credit Agreement (other than the Specified Defaults), (d) the failure of the Borrower to comply with any of the requirements of Section 6 or Section 7 hereof, (e) the acceleration of the 9.125% Senior Notes due 2020 (the “Notes”) issued pursuant to that certain Indenture dated as of March 23, 2012 (the “Notes Indenture”) by and among the Borrower, the guarantors party thereto, and U.S. Bank National

 

 

Association, as trustee (in such capacity, the “Notes Trustee”), or (f) any action by the Notes Trustee and/or any holder of Notes to exercise rights or remedies pursuant to the Notes Indenture after an Event of Default (as defined in the Notes Indenture), the Required Lenders hereby forbear from enforcement of:

 

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

 

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

 

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

 

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

 

 

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

 

“(b) No later than 5:00 p.m. (New York Time) on May 17, 2019, the Borrower shall have entered into a restructuring support agreement acceptable to holders of at least 50% of the outstanding Term B-2 Loans, in their sole discretion.”

 

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

 

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

 

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

 

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

 

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

 

[signature pages follow]

 

 

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

 

	
 
    	
MONITRONICS   INTERNATIONAL, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ William E. Niles
    
	
 
    	
 
    	
Name:
    	
William E. Niles
    
	
 
    	
 
    	
Title:
    	
Executive Vice President and   Secretary
    

 

[Signature page to Amendment No. 7 to Forbearance Agreement]

 

 

[BANK OF AMERICA, N.A.]

 

[Signature page to Amendment No. 7 to Forbearance Agreement]

 

 

[CONSENTING LENDER]

 

[Signature page to Amendment No. 7 to Forbearance Agreement]

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