Exhibit 10.9
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of August 25, 2003, among (i) Austin Ventures
III-A, L.P., a Delaware limited partnership, Austin Ventures III-B, L.P., a
Delaware limited partnership, Austin Ventures V, L.P., a Delaware limited
partnership, Austin Ventures V Affiliates Fund, L.P., a Delaware limited
partnership (collectively, and jointly, severally and jointly and severally,
"Austin Ventures"), (ii) Capital Resource Lenders II, L.P., a Delaware limited
partnership, Capital Resource Partners II, L.P., a Delaware limited partnership
(collectively, and jointly, severally and jointly and severally, "Capital
Resources"), (iii) ABRY Partners IV, L.P., a Delaware limited partnership, ABRY
Investment Partnership, L.P., a Delaware limited partnership (collectively, and
jointly, severally and jointly and severally, "ABRY"), (iv) Windward Capital
Partners II, L.P., a Delaware limited partnership, Windward Capital LP II, LLC,
a Delaware limited liability company (collectively, and jointly, severally and
jointly and severally, "Windward"), (v) Hull Family Limited Partnership, a Texas
limited partnership ("Hull Partnership"), (vi) James Hull, individually, (vii)
Robert Sherman, individually, (viii) Michael Gregory, individually, (ix) Michael
Meyers, individually and (x) Stephen Hedrick, individually (Austin Ventures,
Capital Resources, ABRY, Windward, Hull Partnership, James Hull, Robert Sherman,
Michael Gregory, Michael Meyers, Stephen Hedrick, collectively the "Pledgors",
and each a "Pledgor"), and Fleet National Bank, as Administrative Agent for the
Lenders from time to time party to the credit agreement referred to below (in
such capacity, the "Secured Party").
W I T N E S S E T H :
WHEREAS, Monitronics International, Inc., a Texas corporation (the
"Borrower"), the Secured Party, Bank of America, N.A., as syndication agent, and
the Lenders referred to therein have entered into a Credit Agreement dated as of
the date hereof (as amended, modified, supplemented and/or extended from time to
time, the "Credit Agreement", capitalized terms used herein and not otherwise
defined shall have the same meanings herein as in the Credit Agreement),
pursuant to which the Lenders have agreed, subject to the terms and conditions
set forth therein, to make revolving credit loans, swing line loans and term
loans to the Borrower (collectively, the "Loans"), such Loans to be evidenced by
the Borrower's Revolving Credit and Term Notes, payable to the order of the
respective Lenders (collectively, as amended, modified, supplemented and/or
extended from time to time the "Notes"); and
WHEREAS, the Pledgors collectively own substantially all of the capital
stock and warrants of the Borrower and will thereby benefit from the making of
the Loans; and
WHEREAS, the obligation of the Lenders to make the Loans is subject to the
condition, among others, that the Pledgors shall execute and deliver this
Agreement and grant the security interests hereinafter described, and the
Pledgors hereby enter into this Pledge Agreement and pledge the Pledged
Collateral (as herein defined) to the Secured Party to induce the Lenders to
enter into the Credit Agreement and make the Loans;
NOW, THEREFORE, in consideration of the willingness of the Lenders to enter
into the Credit Agreement and to agree, subject to the terms and conditions set
forth therein, to make the Loans to the Borrower pursuant thereto, and for other
good and valuable consideration, receipt and sufficiency of which is hereby
acknowledged by the Pledgors, it is hereby agreed as follows:
1. Security Interest. The Pledgors hereby deposit with and pledge to the
Secured Party, for the benefit of the Credit Parties, the shares of capital
stock of the Borrower (the "Pledged Stock"), the warrants together with the
shares of common stock issuable upon exercise thereof (the "Pledged Warrants")
and the promissory notes, if any, of the Borrower payable to the Pledgors (the
"Pledged Notes") listed in Schedule I attached hereto (the Pledged Stock, the
Pledged Warrants, the Pledged Notes, and any additional securities or collateral
now or hereafter pledged hereunder are sometimes herein referred to collectively
as the "Pledged Collateral"), and the Pledgors hereby grant to the Secured
Party, for the benefit of the Credit Parties, a security interest in and lien on
all of the Pledged Collateral as security for the due and punctual payment and
performance of the Secured Obligations described in Section 2 hereof.
2. Secured Obligations. The security interest hereby granted shall secure
the due and punctual payment and performance of the Obligations under the Credit
Agreement and the other Loan Documents, including without limitation, the
following (herein called the "Secured Obligations"):
(a) Principal of and premium, if any, and interest on the Notes
(including, without limitation, the payment of interest and other amounts that
would accrue and become due but for the filing of a petition in bankruptcy or
the operation of the automatic stay under Section 362(a) of Title 11 of the
United States Code, as amended); and
(b) Any and all other obligations of the Borrower to the Secured Party
and/or the Credit Parties under the Credit Agreement or under any other Loan
Document.
Notwithstanding the foregoing, the Secured Party and/or the Credit Parties
shall not, without the prior written consent of the Pledgors, (a) increase the
stated principal amount of the Secured Obligations to an amount in excess of the
Aggregate Commitments from time to time in effect under the Credit Agreement (up
to $475,000,000) plus $47,500,000, or (b) extend the Revolving Loan Maturity
Date, the Term Loan Maturity Date or any Incremental Term Loan Maturity Date
more than sixty (60) days.
3. Special Warranties and Covenants of the Pledgors. Each Pledgor hereby
warrants and covenants for itself to the Secured Party and each Lender that:
(a) The Pledged Collateral is duly and validly pledged with the
Secured Party, for the benefit of the Credit Parties, in accordance with law and
such Pledgor warrants and will defend the Secured Party's right, title and
security interest in and to such Pledged Collateral against the claims and
demands of all persons whomsoever.
(b) Each Pledgor has good title to the Pledged Collateral, free and
clear of all claims, mortgages, pledges, and Liens except as may be expressly
set forth and permitted under the Credit Agreement.
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(c) All of the Pledged Stock has been duly and validly issued and is
fully paid and nonassessable.
(d) As of the Effective Date, the Pledged Stock and Pledged Warrants
constitute all of the issued and outstanding capital stock and warrants of the
Borrower issued to any Pledgor. The Pledged Notes constitute all promissory
notes, instruments or other evidences of Indebtedness of any kind or nature
payable to any Pledgor by the Borrower.
(e) To the extent expressly permitted under the Credit Agreement, the
Pledgors may transfer, sell or otherwise dispose of all or a portion of the
Pledged Collateral, but only on the condition that a transferee of the Pledged
Collateral first becomes a party hereto; provided, however, that in the event
that there shall exist an Event of Default under the Credit Agreement on account
of the Borrower's failure to pay principal or interest on any Note when the same
is due and payable (whether at maturity, upon acceleration or otherwise) or on
account of the Borrower's failure to perform or comply with any covenant or term
contained in Sections 8.16 or 8.17 of the Credit Agreement, and such Event of
Default shall be continuing after applicable grace and cure periods, the
Pledgors may not transfer any of the Pledged Collateral without the prior
written consent of the Lenders, which consent shall not be unreasonably withheld
or delayed.
(f) If any additional Capital Stock of the Borrower or if any
promissory notes or other evidence of Indebtedness of the Borrower or other
Capital Stock of the Borrower is acquired by any Pledgor after the date hereof
whether pursuant to option agreements or otherwise, the same shall constitute
Pledged Collateral and shall be deposited and pledged with the Secured Party,
for the benefit of the Credit Parties, as provided in Section 1 hereof
simultaneously with such acquisition. Each Pledgor will promptly notify the
Secured Party of the date and amount of any loans made from time to time by the
Pledgor to the Borrower.
(g) The Pledgors will not create, incur or permit to exist any Lien or
any security interest whatsoever with respect to any of the Pledged Collateral
or the proceeds thereof, other than Liens on and security interests in the
Pledged Collateral created hereby or which are otherwise expressly permitted
under the Credit Agreement.
(h) The Pledgors will not consent to or approve the issuance of any
additional shares of capital stock of any class of the Borrower, except pursuant
to warrants, options or other instruments exercisable or convertible into
capital stock of the Borrower which are outstanding as of the Effective Date or
subsequent options granted to employees or granted under the Option Plans, or
except as may be expressly permitted by and in accordance with the terms of the
Credit Agreement, provided that any such additional shares of capital stock
issued to any of the Pledgors shall be deposited and pledged with the Secured
Party simultaneously with such issuance as provided in Section 1 hereof.
(i) Each Pledgor has all necessary power and authority to enter into
this Agreement, to carry out its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by each Pledgor, the performance by each Pledgor of its obligations hereunder,
and the consummation by each Pledgor of the transactions contemplated hereby
have been duly authorized by all requisite action
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on the part of each Pledgor. This Pledge Agreement has been duly executed and
delivered by each Pledgor, and (assuming due authorization, execution and
delivery by the Secured Party) this Agreement constitutes the legal, valid and
binding obligation of each Pledgor, enforceable against such Pledgor in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors rights generally and by general equity principles
(whether enforcement is sought at law or in equity).
4. Distributions. In case, upon the dissolution, winding up, liquidation or
reorganization of the Borrower whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors or any other
marshaling of the assets and liabilities of the Borrower or otherwise, any sum
shall be paid or any property shall be distributed upon or with respect to any
of the Pledged Collateral, such sum shall be paid over to the Secured Party to
be held as collateral security for the Secured Obligations. In case any stock
dividend shall be declared on any of the Pledged Collateral, or any share of
stock or fraction thereof shall be issued pursuant to any stock split involving
any of the Pledged Collateral, or any distribution of capital (including cash
dividends, except those expressly allowed under the Credit Agreement) shall be
made on any of the Pledged Collateral, or any property shall be distributed upon
or with respect to the Pledged Collateral pursuant to recapitalization or
reclassification of the capital of the Borrower, the shares or other property so
distributed shall be delivered to the Secured Party to be held as collateral
security for the Secured Obligations.
5. Events of Default. There shall exist a default under this Agreement upon
the happening of any of the following events or conditions (herein called
"Events of Default"):
(a) Any Event of Default (as defined or provided in the Credit
Agreement) shall occur and such Event of Default shall continue beyond the
expiration of the applicable period of grace, if any; or
(b) There shall be a material breach of any term or provision
contained herein, or any representation and/or warranty made in this Agreement
or in any document executed or delivered from time to time in connection
herewith is untrue or misleading in any material respect.
6. Rights and Remedies of Secured Party. Upon the occurrence and
continuance of any Event of Default, such default not having previously been
remedied or cured within any applicable grace or cure periods, the Secured Party
shall have the following rights and remedies with respect to the Pledged
Collateral:
(a) All rights and remedies provided by law, including, without
limitation, those provided by the New York Uniform Commercial Code as in effect
from time to time (the "Uniform Commercial Code");
(b) All rights and remedies provided in this Agreement; and
(c) All rights and remedies provided in the Credit Agreement, the
Notes, the Security Documents or in any other Loan Document, other agreement,
document or instrument pertaining to the Secured Obligations.
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The rights and remedies of the Secured Party set forth above shall be
exercisable only in connection with a foreclosure on the Pledged Collateral in
accordance with the terms hereof. The rights and remedies of the Secured Party
under this Pledge Agreement against the Pledgor shall be limited to foreclosure
on such Pledged Collateral, and the Secured Party shall not have the right to
commence any action against the Pledgors for any deficiency remaining in respect
of the Secured Obligations after the exercise of the rights of the Secured Party
against the Pledged Collateral in accordance with terms of this Pledge
Agreement. The Pledgors may exercise their rights under the Pledged Warrants at
any time prior to any foreclosure thereon by the Secured Party and any stock
receivable by the Pledgors upon any such exercise shall be delivered to the
Secured Party as Pledged Collateral hereunder.
7. Right to Transfer into Name of Secured Party, etc. In case there shall
exist an Event of Default that shall be continuing after applicable grace and
cure periods, but subject to the provisions of the Uniform Commercial Code or
other applicable law, the Secured Party may cause all or any of the Pledged
Collateral to be transferred into its name or into the name of its nominee or
nominees. So long as no Event of Default shall exist and be continuing, the
Pledgors shall be entitled to exercise as the Pledgors shall deem fit, but in a
manner not inconsistent with the terms hereof or of the Secured Obligations, the
voting power with respect to the Pledged Collateral.
8. Right of Secured Party to Exercise Voting Power, etc. In case there
shall exist an Event of Default, which shall not have been remedied or cured,
the Secured Party, until such Event of Default has been remedied or cured in
accordance with the Credit Agreement shall be entitled to exercise the voting
power with respect to the Pledged Collateral, to receive and retain, as
collateral security for the Secured Obligations, any and all dividends or other
distributions at any time and from time to time declared or made upon any of the
Pledged Collateral, and to exercise any and all rights of payment, conversion,
exchange, subscription or any other rights, privileges or options pertaining to
the Pledged Collateral as if it were the absolute owner thereof, including
without limitation, the right to exchange, at its discretion, any and all of the
Pledged Collateral upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the Borrower or, upon the exercise of
any such right, privilege or option pertaining to the Pledged Collateral, and in
connection therewith, to deposit and deliver any and all of the Pledged
Collateral with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the Secured Party may
determine, all without liability except to account for property actually
received, but the Secured Party shall have no duty to exercise any of the
aforesaid rights, privileges or options and shall not be responsible for any
failure to do so or delay in so doing.
9. Right of Secured Party to Dispose of Collateral, etc. Upon the
occurrence and continuance of an Event of Default, such default not having
previously been remedied or cured within any applicable grace or cure periods,
the Secured Party shall have the right, unless the Event of Default shall have
been remedied or cured in accordance with the Credit Agreement prior to taking
any such actions, at any time or times thereafter to sell, resell, assign and
deliver all or any of the Pledged Collateral in one or more parcels at any
exchange or broker's board or at public or private sale; provided, however, that
the Secured Party shall not sell, resell, assign or deliver any of the Pledged
Collateral unless (a) the Secured Party shall sell, resell, assign and deliver
all of the Pledged Collateral and (b) simultaneously therewith, the Secured
Party shall
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also sell, resell, assign and deliver all other shares of (and warrants for)
capital stock of the Borrower held in pledge by the Secured Party at the time of
such sale. Unless the Pledged Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market, the
Secured Party will give the Pledgors at least ten (10) days' prior written
notice at the respective addresses of the Pledgors specified in Section 17
hereof of the time and place of any public sale thereof or of the time after
which any private sale or any other intended disposition thereof is to be made.
Any such notice shall be deemed to meet any requirement hereunder or under any
applicable law (including the Uniform Commercial Code) that reasonable
notification be given of the time and place of such sale or other disposition.
Such notice may be given without any demand of performance or other demand, all
such demands being hereby expressly waived by the Pledgors. All such sales shall
be conducted in a commercially reasonable manner and shall be at such
commercially reasonable price or prices as the Secured Party shall deem best and
either for cash or on credit or for future delivery (without assuming any
responsibility for credit risk). At any such sale or sales the Secured Party may
purchase any or all of the Pledged Collateral to be sold thereat upon such terms
as the Secured Party may deem best. Upon any such sale or sales the Pledged
Collateral so purchased shall be held by the purchaser absolutely free from any
claims or rights of whatsoever kind or nature, including any equity of
redemption and any similar rights, all such equity of redemption and any similar
rights being hereby expressly waived and released by the Pledgors. In the event
any consent, approval or authorization of any governmental agency will be
necessary to effectuate any such sale or sales, the Pledgors shall execute, and
hereby agree to cause the Borrower to execute, all such applications or other
instruments as may be required. The proceeds of any such sale or sales, together
with any other additional collateral security at the time received and held
hereunder, shall be received and applied: first, to the payment of all costs and
expenses of such sale, including reasonable attorneys' fees; second, to the
payment of the Secured Obligations in such order of priority as the Secured
Party shall determine, and any surplus thereafter remaining shall be paid to the
Pledgors or to whomever may be legally entitled thereto (including, if
applicable, any subordinated creditor of the Borrower or the Pledgors).
The Pledgors recognize that the Secured Party may be unable to effect a
public sale of all or a part of the Pledged Collateral by reason of certain
prohibitions contained in the Securities Act of 1933, but may be compelled to
resort to one or more private sales to a restricted group of purchasers, each of
whom will be obligated to agree, among other things, to acquire such Pledged
Collateral for its own account, for investment and not with a view to the
distribution or resale thereof. The Pledgors acknowledge that private sales so
made may be at prices and upon other terms less favorable to the seller than if
such Pledged Collateral were sold at public sales, and that the Secured Party
has no obligation to delay sale of any such Pledged Collateral for the period of
time necessary to permit such Pledged Collateral to be registered for public
sale under the Securities Act of 1933. The Pledgors agree that any such private
sales shall not be deemed to have been made in a commercially unreasonable
manner solely because they shall have been made under the foregoing
circumstances.
10. Collection of Amounts Payable on Account of Pledged Collateral, etc.
Upon the occurrence and during the continuance of any Event of Default, the
Secured Party may, but without obligation to do so, demand, sue for and/or
collect any money or property at any time due, payable or receivable, to which
it may be entitled hereunder, on account of or in exchange for any of the
Pledged Collateral and shall have the right, for and in the name, place and
stead of
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the Pledgors, to execute endorsements, assignments or other instruments of
conveyance or transfer with respect to all or any of the Pledged Collateral.
11. Care of Pledged Collateral in Secured Party's Possession. Beyond the
exercise of reasonable care to assure the safe custody of the Pledged Collateral
while held hereunder, the Secured Party shall have no duty or liability to
collect any sums due in respect thereof or to protect or preserve rights
pertaining thereto, and shall be relieved of all responsibility for the Pledged
Collateral upon surrendering the same to the Pledgors.
12. Waivers, etc. The Pledgors hereby waive presentment, demand, notice,
protest and, except as is otherwise provided herein, all other demands and
notices in connection with this Agreement or the enforcement of the Secured
Party's rights hereunder or in connection with any Secured Obligations or any
Pledged Collateral; consent to and waive notice of the granting of renewals,
extensions of time for payment or other indulgences to the Borrower or the
Pledgors or to any third party, or substitution, release or surrender of any
collateral security for any Secured Obligation, the addition or release of
persons primarily or secondarily liable on any Secured Obligation or on any
collateral security for any Secured Obligation, the acceptance of partial
payments on any Secured Obligation or on any collateral security for any Secured
Obligation and/or the settlement or compromise thereof. No delay or omission on
the part of the Secured Party in exercising any right hereunder shall operate as
a waiver of such right or of any other right hereunder. Any waiver of any such
right on any one occasion shall not be construed as a bar to or waiver of any
such right on any future occasion. Each Pledgor further waives any right it may
have under the constitutions of any state in which any of the Pledged Collateral
may be located or under the Constitution of the United States of America, to
notice (other than any requirement of notice provided herein) or to a judicial
hearing prior to the exercise of any right or remedy provided by this Agreement
to the Secured Party and waives its right, if any, to set aside or invalidate
any sale duly consummated in accordance with the foregoing provisions hereof on
the grounds (if such be the case) that the sale was consummated without a prior
judicial hearing. The Pledgors' waivers under this section have been made
voluntarily, intelligently and knowingly and after the Pledgors have been
apprised and counseled by their attorneys as to the nature thereof and its
possible alternative rights.
13. Termination; Assignment, etc. This Agreement and the security interest
in the Pledged Collateral created hereby shall terminate when all of the Secured
Obligations have been paid and finally discharged in full in cash or Cash
Equivalents and all of the Commitments under the Credit Agreement are no longer
in effect. For all purposes of this Agreement, no Default or Event of Default
shall be deemed to have been cured or waived except as expressly provided in the
Credit Agreement. No waiver by the Secured Party or any Lender or by any other
holder of Secured Obligations of any default shall be effective unless in
writing nor operate as a waiver of any other default or of the same default on a
future occasion. In the event of a sale or assignment by any Lender of all or
any of the Secured Obligations held by it in accordance with the terms of the
Credit Agreement, such Lender may assign or transfer its rights and interest
under this Agreement in whole or in part to the purchaser or purchasers of such
Secured Obligations, whereupon such purchaser or purchasers shall become vested
with all of the powers and rights of such Lender hereunder, and such Lender
shall thereafter be forever released and fully discharged from any liability or
responsibility hereunder with respect to the rights and interest so assigned. At
the sole expense of the Pledgors following termination of this Agreement and the
termination
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of the Secured Party's security interest in the Pledged Collateral, the Secured
Party shall return all Pledged Stock and other Pledged Collateral in its
possession to the Pledgors (or to the Borrower, as agent for the Pledgors) and
shall execute and deliver to the Pledgors such other documents as the Pledgors
may reasonably require to evidence the termination of the Secured Party's
security interest in the Pledged Collateral.
14. Reinstatement. Notwithstanding the provisions of Section 13, this
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any amount received by the Credit Parties or the Secured Party in
respect of the Secured Obligations is rescinded or must otherwise be restored or
returned by the Credit Parties or the Secured Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Pledgor or upon the appointment of any intervenor or conservator of, or trustee
or similar official for, the Borrower or any Pledgor or any substantial part of
their respective properties, or otherwise, all as though such payments had not
been made.
15. Governmental Approvals, etc. Upon the exercise by the Secured Party of
any power, right, privilege or remedy pursuant to this Agreement which requires
any consent, approval, qualification or authorization of any governmental
authority or instrumentality, the Pledgors will execute and deliver, or will
cause the execution and delivery of, all applications, certificates, instruments
and other documents and papers that the Secured Party may be required to obtain
for such governmental consent, approval, qualification or authorization.
16. Restrictions on Transfer, etc. To the extent that any restrictions
imposed by the charter or by-laws of any Borrower, the Shareholders Agreement or
any other agreement among the holders of capital stock of the Borrower or other
document or instrument would in any way affect or impair the pledge of the
Pledged Collateral hereunder or the exercise by the Secured Party of any right
granted hereunder, including, without limitation, the right of the Secured Party
to dispose of the Pledged Collateral upon the occurrence of any Event of
Default, the Pledgors hereby waive such restrictions, and represent and warrant
that they will cause all shares of Capital Stock of the Borrower held by them to
be voted to cause the Borrower to take all necessary action to waive such
restrictions, and the Pledgors hereby agree that they will take any further
action which the Secured Party may reasonably request in order that the Secured
Party may obtain and enjoy the full rights and benefits granted to the Secured
Party by this Agreement free of any such restrictions. Without limiting the
generality of the foregoing, each Pledgor agrees that, notwithstanding the
provisions of Section 2D of the Shareholders Agreement, any purchaser of Pledged
Collateral, including any Credit Party, who acquires any Pledged Collateral
pursuant to the terms of this Agreement, shall take such Pledged Collateral free
and clear of all terms of the Shareholders Agreement and neither such Persons
nor such Pledged Collateral shall thereafter be subject to any term or condition
of the Shareholders Agreement.
17. Notices. Except as otherwise provided herein, all notices to the
Pledgors or to the Secured Party shall be in writing and shall be deemed to have
been sufficiently given or served for all purposes hereof if personally
delivered or mailed by first class mail, postage prepaid, as follows:
(a) if to the Pledgors:
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[Austin Ventures III-A, L.P.
Austin Ventures III-B, L.P.
Austin Ventures V, L.P.
Austin Ventures V Affiliates Fund, L.P.
701 Brazos, Suite 1400
Austin, Texas 78701
Attention: Blaine F. Wesner
with a copy to:
Vinson & Elkins L.L.P.
600 Congress Avenue, Suite 2700
Austin, Texas 78701
Attention: William R. Volk, Esq.
and to:
Capital Resource Lenders II, L.P.
Capital Resource Partners II, L.P.
85 Merrimac Street, Suite 200
Boston, MA 02114
Attention: Stephen M. Jenks
with a copy to:
Testa, Hurwitz & Thibeault, LLP
High Street Tower
125 High Street
Boston, MA 02110
Attention: Andrew E. Taylor, Jr., Esq.
and to:
ABRY Partners IV, L.P.
ABRY Investment Partnership, L.P.
18 Newbury Street
Boston, MA 02116
Attention: Jay Grossman
with a copy to:
Kirkland & Ellis
153 East 53rd Street
New York, New York 10022
Attention: John Kuehn, Esq.
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and to:
Windward Capital Partners II, L.P.
Windward Capital LP II, LLC
Americas Tower
1177 Avenue of the Americas
42nd Floor
New York, New York 10036
Attention: Peter McDonald
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
4 Times Square
New York, New York 10036
Attention: Howard Ellin, Esq.
and to:
Hull Family Limited Partnership
c/o James R. Hull at Monitronics International, Inc.
12801 Stemmons Freeway, Suite 821
Dallas, Texas 75234
and to:
Robert Sherman
c/o Monitronics International, Inc.
12801 Stemmons Freeway, Suite 821
Dallas, Texas 75234
and to:
Michael Gregory
c/o Monitronics International, Inc.
12801 Stemmons Freeway, Suite 821
Dallas, Texas 75234
and to:
Michael Meyers
c/o Monitronics International, Inc.
12801 Stemmons Freeway, Suite 821
Dallas, Texas 75234
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and to:
Stephen Hedrick
c/o Monitronics International, Inc.
12801 Stemmons Freeway, Suite 821
Dallas, Texas 75234
with a copy to:
Vinson & Elkins L.L.P.
2001 Ross Avenue, Suite 3700
Dallas, Texas 75201
Attention: James Markus, Esq.]
(b) if to the Secured Party:
Fleet National Bank
100 Federal Street
Boston, Massachusetts 02110
Attention: John F. Lynch, Senior Vice President
with a copy to:
Peter M. Palladino, P.C.
Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, Massachusetts 02109
or at such other address as the party to whom such notice is directed may have
designated in writing to the other party hereto. A notice shall be deemed to
have been given upon the earlier to occur of (i) three (3) days after the date
on which it is deposited in the U.S. mails or (ii) receipt by the party to whom
such notice is directed.
18. Miscellaneous. This Agreement shall inure to the benefit of and be
binding upon the Secured Party, the Credit Parties and the Pledgor and their
respective successors and assigns, and the term "Credit Parties" shall be deemed
to include any other holder or holders of any of the Secured Obligations and the
term "Secured Party" shall be deemed to include any successor agent for the
Credit Parties. In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby. This
Agreement may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which shall be an original, but
all of which together shall constitute one instrument.
19. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement,
including the validity hereof and the rights and obligations of the parties
hereunder, shall be governed by, and construed in accordance with, the internal
laws (as opposed to the conflicts of law provisions, but including sections
5-1401 and 5-1402 of the general obligations law of the State
11
of New York) and decisions of the State of New York. Each party hereto hereby
irrevocably submits to the nonexclusive jurisdiction of any New York or Federal
court sitting in the City of New York, New York over any suit, action or
proceeding arising out of or relating to this Agreement and waives, to the
fullest extent permitted or not prohibited by law, any objection which it may
now or hereafter have to the laying of the venue of any such suit, action or
proceeding brought in such a court and any claim that any such suit, action or
proceeding brought in such a court has been brought in an inconvenient forum.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 19.
[Signature pages follow]
12
IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed
instrument as of the date first above written.
AUSTIN VENTURES III-A, L.P.
By: AV Partners III, L.P.,
General Partner
By: /s/ Blaine F. Wesner
-----------------------------------
Blaine F. Wesner
Authorized Signatory
AUSTIN VENTURES III-B, L.P.
By: AV Partners III, L.P.,
General Partner
By: /s/ Blaine F. Wesner
-----------------------------------
Blaine F. Wesner
Authorized Signatory
AUSTIN VENTURES V, L.P.
By: AV Partners V, L.P.
Its General Partner
By: /s/ Blaine F. Wesner
-----------------------------------
Blaine F. Wesner
General Partner
AUSTIN VENTURES V AFFILIATES FUND, L.P.
By: AV Partners V, L.P.
Its General Partner
By: /s/ Blaine F. Wesner
-----------------------------------
Blaine F. Wesner
General Partner
CAPITAL RESOURCE LENDERS II, L.P.
By: Capital Resource Partners II, L.P.
Its General Partner
By: /s/ Stephen M. Jenks
-----------------------------------
Name: Stephen M. Jenks
Title: Class B Limited Partner
CAPITAL RESOURCE PARTNERS II, L.P.
By:
-----------------------------------
Its General Partner
By: /s/ Stephen M. Jenks
-----------------------------------
Name: Stephen M. Jenks
Title: Class B Limited Partner
WINDWARD CAPITAL PARTNERS II, L.P.
By: Windward Capital GP, LLC,
Its General Partner
By:
-----------------------------------
Name:
Title:
WINDWARD CAPITAL L.P. II, LLC
By:
-----------------------------------
Name:
Title:
CAPITAL RESOURCE LENDERS II, L.P.
By: Capital Resource Partners II, L.P.
Its General Partner
By:
-----------------------------------
Name:
Title:
CAPITAL RESOURCE PARTNERS II, L.P.
By:
-----------------------------------
Its General Partner
By:
-----------------------------------
Name:
Title:
WINDWARD CAPITAL PARTNERS II, L.P.
By: Windward Capital GP, LLC,
Its General Partner
By: /s/ Peter Scott Macdonald
-----------------------------------
Name: Peter Scott Macdonald
Title: Managing Member
WINDWARD CAPITAL L.P. II, LLC
By: /s/ Peter Scott Macdonald
-----------------------------------
Name: Peter Scott Macdonald
Title: Managing Member
ABRY PARTNERS IV, L.P.
By: ABRY Capital Partners, L.P.,
its general partner
By: /s/ Jay Grossman
-----------------------------------
Name: Jay Grossman
Title:
ABRY INVESTMENT PARTNERSHIP, L.P.
By: ABRY Investment GP, LLC,
its general partner
By: /s/ Jay Grossman
-----------------------------------
Name: Jay Grossman
Title:
HULL FAMILY LIMITED PARTNERSHIP
By: James R. Hull Management Trust,
Its General Partner
By:
-----------------------------------
James R. Hull, Trustee
---------------------------------------
James R. Hull, individually
c/o Monitronics International, Inc.
12801 Stemmons Freeway, Suite 821
Dallas, Texas 75234
---------------------------------------
Robert Sherman, individually
c/o Monitronics International, Inc.
12801 Stemmons Freeway, Suite 821
Dallas, Texas 75234
ABRY PARTNERS IV, L.P.
By: ABRY Capital Partners, L.P.,
its general partner
By:
-----------------------------------
Name:
Title:
ABRY INVESTMENT PARTNERSHIP, L.P.
By: ABRY Investment GP, LLC,
its general partner
By:
-----------------------------------
Name:
Title:
HULL FAMILY LIMITED PARTNERSHIP
By: James R. Hull Management Trust,
Its General Partner
By: /s/ James R. Hull
-----------------------------------
James R. Hull, Trustee
/s/ James R. Hull
---------------------------------------
James R. Hull, individually
c/o Monitronics International, Inc.
12801 Stemmons Freeway, Suite 821
Dallas, Texas 75234
/s/ Robert Sherman
---------------------------------------
Robert Sherman, individually
c/o Monitronics International, Inc.
12801 Stemmons Freeway, Suite 821
Dallas, Texas 75234
/s/ Michael Meyers
---------------------------------------
Michael Meyers, individually
c/o Monitronics International, Inc.
12801 Stemmons Freeway, Suite 821
Dallas, Texas 75234
/s/ Michael Gregory
---------------------------------------
Michael Gregory, individually
c/o Monitronics International, Inc.
12801 Stemmons Freeway, Suite 821
Dallas, Texas 75234
/s/ Stephen Hedrick
---------------------------------------
Stephen Hedrick, individually
c/o Monitronics International, Inc.
12801 Stemmons Freeway, Suite 821
Dallas, Texas 75234
ACKNOWLEDGMENT:
The Borrower acknowledges the provisions of the within Pledge Agreement,
specifically the provisions of subsection 3(g) relating to the Option Plans, and
covenants to the Secured Party that in the event any shares of capital stock of
the Borrower are to be issued to any Pledgor pursuant to such Option Plans, or
otherwise such shares will be delivered directly to the Secured Party.
MONITRONICS INTERNATIONAL, INC.
By: /s/ James R. Hull
----------------------------------
James R. Hull
President and CEO
ACKNOWLEDGED AND ACCEPTED:
FLEET NATIONAL BANK,
as Administrative Agent
By:
----------------------------------
Name:
Title:
ACKNOWLEDGMENT:
The Borrower acknowledges the provisions of the within Pledge Agreement,
specifically the provisions of subsection 3(g) relating to the Option Plans, and
covenants to the Secured Party that in the event any shares of capital stock of
the Borrower are to be issued to any Pledgor pursuant to such Option Plans, or
otherwise such shares will be delivered directly to the Secured Party.
MONITRONICS INTERNATIONAL, INC.
By:
----------------------------------
James R. Hull
President and CEO
ACKNOWLEDGED AND ACCEPTED:
FLEET NATIONAL BANK,
as Administrative Agent
By: /s/ John F. Lynch
----------------------------------
Name: John F. Lynch
Title: Senior Vice President
[To Be Provided]
SCHEDULE I
(to Pledge Agreement)
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No. % Certificate
Owner and Address Description of Shares Owned No(s).
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TOTAL PLEDGED STOCK
- --------------------------------------------------------------------------------
PLEDGED NOTES
Description Principal Amount
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