Exhibit 10.23
TRANSFER ASSIGNMENT AND ASSUMPTION AGREEMENT
AND FOURTH AMENDMENT AGREEMENT
This Transfer, Assignment and Assumption Agreement and Fourth Amendment
Agreement (the "Agreement") is executed arid entered into effective as of July
22, 1998 by and among Monitronics International, Inc., a Texas corporation (the
"Company"), the holders (the "Security Holders") of certain obligations and
securities of the Company whose names appear on the signature pages to this
Agreement, and the Lenders (the "Lenders") to the Company under various loan
agreements whose names appear on the signature pages to this Agreement.
RECITALS:
WHEREAS, James R. Hull ("Hull") owns 942,466 shares ("Hull Shares") of
Class A Common Stock, $.01 par value per share ("Class A Common Stock"), of the
Company; and
WHEREAS, the Company, the Lenders and the Security Holders are parties to,
among other agreements, the following agreements (collectively, the "Existing
Affected Lender Agreements"): (i) The Second Amended and Restated Pledge
Agreement, dated as of March 13, 1998 (as amended, the "Pledge Agreement"), and
(ii) The Second Amended and Restated Affiliate Subordination Agreement, dated as
of March 13, 1998 (as amended, the "Subordination Agreement"); and
WHEREAS, pursuant to the Pledge Agreement, the Hull Shares have been
pledged and delivered to the Lenders as collateral security for the obligations
of the Company to the Lenders under the Loan Agreement (as defined in the Pledge
Agreement), all as more particularly described in the Pledge Agreement; and
WHEREAS, pursuant to the Subordination Agreement, all claims of any kind or
nature of Hull against the Company are made subordinate and junior in right of
payment and exercise of remedies to the claims of the Lenders against the
Company; and
WHEREAS, Hull desires to transfer (subject to the Pledge Agreement) all
942,466 of the Hull Shares (the "Securities") to Hull Family Limited Partnership
(the "Family Partnership"); and
WHEREAS, it is a condition to the consent of the Lenders to the transfers
of the Hull Shares that Family Partnership become a party to the Pledge
Agreement and the Subordination Agreement, and
WHEREAS, Family Partnership desires to accept the transfer of said
Securities to it on such terms, arid become a party to the Pledge Agreement and
the Subordination Agreement, and
WHEREAS, Hull is a party to various agreements, and the Securities are
subject to various agreements, with the other parties to this Agreement and
Family Partnership desires to assume the duties, obligations and
responsibilities of Hull under said various agreements as they relate to the a
Securities, and desires to have all benefits and rights in favor of or
attributable to
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the Securities under said various agreements; and
WHEREAS, the Company and certain of the Security Holders arc parties to the
following agreements (collectively, the "Existing Security Holder Agreements"):
(i) Amended and Restated Shareholders Agreement, dated as of May 10, 1996, as
amended by that certain Amendment Agreement dated as of November 22, 1996 by and
among the Company and certain of the Security Holders (the "First Amendment
Agreement'), as further amended by that certain Second Amendment Agreement dated
as of May 19, 1997 by and among the Company and certain of the Security Holders
(the "Second Amendment Agreement"), as further amended by that certain Transfer,
Assignment and Assumption Agreement and Third Amendment Agreement by and among
the Company and certain of the Security Holders (the "Third Amendment Agreement)
(as so amended, the "Shareholders Agreement"), by arid among the Company, Austin
Ventures III-A, L.P., a Delaware limited partnership ("Austin III-A"), Austin
Ventures III-B, L.P., a Delaware limited partnership ("Austin III-B" and
together with Austin III-A "Austin III"), Capital Resource Lenders II, L.P., a
Delaware limited partnership ("CRL II"), Austin Ventures V. L.P., a Delaware
limited partnership ("Austin V"), Austin Ventures V Affiliates Fund, L.P., a
Delaware limited partnership ("Affiliates Fund"), Hull and Robert N. Sherman
("Sherman"); (ii) Amended and Restated co-Sale Agreement, dated as of May 10,
1996, as amended by the First Amendment Agreement, the Second Amendment
Agreement and Third Amendment Agreement (as so amended, the "Hull Co-Sale
Agreement"), among the Company, CRL II, Austin III, Austin V. Affiliates Fund
and Hull; and (iii) Amended and Restated Affiliate Registration Agreement, dated
May 10, 1996, as amended by the First Amendment Agreement, the Second Amendment
Agreement and Third Amendment Agreement (as so amended, the "Affiliate
Registration Agreement"), between the Company and Hull; and
WHEREAS, as a result of the transactions contemplated by the transfer of
the Securities by Hull to Family Partnership, the parties hereto desire to amend
the Existing Security Holder Agreements and Existing Affected Lender Agreements.
NOW THEREFORE, in consideration of the premises and the agreements herein
contained, and intending to be bound hereby, the parties hereby agree as
follows:
1. Assignment. Assumption and Acknowledgment.
(a) For good and valuable consideration, the receipt of which is
hereby acknowledged, Hull hereby assigns and transfers, subject to the Pledge
Agreement, all his right, title and interest in all 942,466 of the Hull Shares
to Family Partnership, including any rights permitted to be transferred with
respect to such Securities pursuant to the Existing Security Holder Agreements
and the Existing Affected Lender Agreements, with such transfer and assignment
to be effective as of the date of this Agreement (the "Effective Date"). Family
Partnership shall be bound by the provisions of the Existing Affected Lender
Agreements as of the Effective Date.
(b) Family Partnership hereby assumes all of the obligations and
commitments of Hull with respect to the Securities assigned and transferred to
Family Partnership arising under the Existing Security Bolder Agreements and the
Existing Affected Lender Agreements accruing on or after the Effective Date.
Notwithstanding Family Partnership
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becoming a party to the Existing Affected Lender Agreements, Hull shall remain
parry to and bound by the provisions of the Subordination Agreement.
(c) The Company hereby acknowledges and consents to the transfer of
the Securities as set forth above and agrees to take all necessary action to
reflect such transfer in its books and records.
(d) Each of Hull, Family Partnership and the Company agrees to execute
any further instruments or perform any such acts which are or may become
reasonably necessary to carry out the intent of this Agreement, including,
without limitation, execution of any documents required to complete the
foregoing transfers and the cancellation and reissuance of certificates
representing such Securities, and any documents required by the Lenders in order
to give effect to the assumption by Family Partnership of Hull's obligations
under the Pledge Agreement and the Subordination Agreement, and to become
parties thereto.
(e) Each of the Security Holders hereby waives any right of first
refusal or co-sale rights which any of such Security Holders may have with
regard to the assignment and transfer of the Securities by Hull to Family
Partnership and hereby expressly consents to such assignment and transfer.
2. Addition of Family Partnership as a Part to the Existing Security Holder
Agreements and Existing Affected Lender Agreements. The parties to this
Agreement hereby consent to and approve of the addition of Family Partnership as
a party to the Shareholders Agreement, the Affiliate Registration Agreement, the
Hull Co-Sale Agreement, the Pledge Agreement and the Subordination Agreement,
and acknowledge and agree that Family Partnership shall be bound by all of the
terms and conditions of such agreements, as amended hereby and as from time to
time in effect, and that such terms and conditions shall inure to the benefit of
Family Partnership and Revocable Trust, in each case, to the extent applicable
to Family Partnership with respect to the Securities transferred and assigned to
Family Partnership or as the owner of such Securities.
3. Amendments to Existing Security Holder Agreements and Existing Affected
Lender Agreements.
(a) That all references to James R. Hull as a "Common Shareholder" in
the Shareholders Agreement shall now be deemed to be a reference to Family
Partnership so that Family Partnership shall be a "Common Shareholder" for all
purposes in the Shareholders Agreement.
(b) That paragraph 4K of the Shareholders Agreement is hereby amended
to add Family Partnership to the list of named "Pledgors" and to include the
Securities as "Pledged Securities".
(c) That all references to "Hull" in the Hull Co-Sale Agreement shall
be deemed to be a reference to Family Partnership.
(d) That all references to "Shareholder" in the Affiliate Registration
Agreement shall be deemed to be a reference to Family Partnership.
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(e) That the Pledge Agreement is amended to remove Hull as a "Pledgor"
and to add Family Partnership as a "Pledgor" and the definition of "Pledged
Stock" thereunder, as well as Schedule I thereof, is amended to include the
942,466 Hull Shares transferred by Hull to Family Partnership, and that the
number of shares of Pledged Stock appearing on Schedule I pledged by Hull is
reduced by the corresponding number of shares. State Street Bank and Trust
Company, as Documentation and Collateral Agent, is hereby authorized to amend
Schedule I to the Pledge Agreement as aforesaid, and to attach such amended
Schedule I to the Pledge Agreement. As so amended, the Pledge Agreement is
hereby ratified by each of the parties hereto.
(f) That the Subordination Agreement is amended to include Family
Partnership as a "Subordinated Creditor" thereunder.
4. Miscellaneous.
(a) Effect. Except as amended hereby, the Existing Security Holder
Agreements and Existing Affected Lender Agreements shall remain in full force
and effect.
(b) Return of Stock Certificate arid Warrants. Hull hereby requests
that the Lenders upon receipt from Family Partnership of one or more
certificates representing 942,466 shares of the Company's Class A Common Stock,
with a stock power in the form attached hereto duly executed in blank, together
with such other agreements as the Lenders may reasonably require in order to
cause Family Partnership to become a party to the Pledge Agreement and
Subordination Agreement, and such legal opinions as the Lenders may reasonably
require in connection therewith, to cancel and deliver Certificate Nos. 8 and
21, representing 33,061 and 909,405 shares of Class A Common Stock,
respectively, issued in the name of Hull, to the Company. Hull hereby appoints
the Company as his agent to cause such transfer and reissuance of certificates
to be accomplished. Family Partnership hereby agrees to execute and deliver to
State Street Bank and Trust Company the form of Stock Power of Attorney attached
to this Agreement. Family Partnership hereby directs the Company to deliver the
new stock certificate directly to State Street Bank and Trust Company upon
issuance thereof.
(c) Waivers. Each of the parties hereto waives any right to object to
the transfer of the Securities from Hull to Family Partnership pursuant to any
contractual right or under any other theory.
(d) Descriptive Headings. The descriptive headings in this Agreement
are inserted for convenience only and do not constitute a part of this Agreement
(e) Governing Law. The construction, validity and interpretation of
this Agreement will be governed by and construed in accordance with the domestic
laws of the State of Texas without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Texas or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Texas.
(f) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and each of the panics hereto may execute this Agreement by signing
any such counterpart. Facsimile
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signatures shall be accepted for all purposes as original signatures.
IN WITNESS WHEREOF, this Transfer, Assignment and Assumption Agreement and
Fourth Amendment Agreement has been executed by the parties hereto as of the day
and year first above set forth.
COMPANY:
MONITRONICS INTERNATIONAL, INC.
By: /s/ James R. Hull
-----------------------------------
James R. Hull, President
SECURITY HOLDERS:
AUSTIN VENTURES III-A, L.P.
By: AV Partners Ill, L.P.,
Its General Partner
By: /s/ Blaine F. Wesner
-----------------------------------
Blaine F. Wesner,
Authorized Signatory
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AUSTIN VENTURES III-B, L.P.
By: AV Partners III, L.P.
Its 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 Resources Partners II, L.P.
Its General Partner
By: /s/ Fred C. Danforth
-----------------------------------
General Partner
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/s/ James R. Hull
-----------------------------------
James R. Hull
/s/ Robert N. Sherman
-----------------------------------
Robert N. Sherman
/s/ Michael Meyers
-----------------------------------
Michael Meyers
/s/ Stephen Hedrick
-----------------------------------
Stephen Hedrick
/s/ Michael Gregory
-----------------------------------
Michael Gregory
HULL FAMILY LIMITED PARTNERSHIP
By: James R. Hull Management Trust
Its General Partner
By: /s/ James R. Hull
-----------------------------------
James R. Hull,
Trustee
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LENDERS:
CANADIAN IMPERIAL BANK OF
COMMERCE, AS ADMINISTATIVE AGENT
By: /s/ Amy Kothari
-----------------------------------
Its: Executive Director
CIBC Oppenheimer Corp., As Agent
CIBC INC.
AS LENDER
By: /s/ Amy Kothari
-----------------------------------
Its: Executive Director
CIBC Oppenheimer Corp., As Agent
STATE STREET BANK AND TRUST COMPANY,
INDIVIDUALLY AND AS DOCUMENTATION AGENT
By: /s/ illegible signature
-----------------------------------
Its: Authorized Agent
----------------------------------
HELLER FINANCIAL, INC.
By: /s/ illegible signature
-----------------------------------
Its: Authorized Agent
----------------------------------
BANKBOSTON, N.A.
By: /s/ illegible signature
-----------------------------------
Its: Authorized Agent
----------------------------------
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Stock Power of Attorney
The undersigned assigns and transfers to State Street Bank and Trust
Company, 942,466 shares of Class A Common Stock, $0.01 par value, of Monitronics
International, Inc., a Texas corporation (the "Company"), standing in its name
on the books of the Company and represented by certificate number __, and
irrevocably appoints _________________________ agent to transfer such shares on
the books of the Company. The agent may substitute another to act for it.
Dated: _______________, 199_.
HULL FAMILY LIMITED PARTNERSHIP
By: James R. Hull Management Trust
Its General Partner
By: /s/
-----------------------------------
James R. Hull,
Trustee
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