Exhibit 10.25
SIXTH AMENDMENT AGREEMENT
This Sixth Amendment Agreement (the "Agreement") is entered into as of
April 27, 2001 by and among Monitronics International, Inc., a Texas corporation
(the "Company"), the holders of Preferred Stock listed on the Schedule of
Preferred Holders attached hereto (the "Preferred Holders"), the holders of
Common Stock Purchase Warrants listed on the Schedule of Warrant Holders
attached hereto (the "Warrant Holders"), the holders of Common Stock listed on
the Schedule of Common Shareholders attached hereto (the "Common Shareholders"
and, together with the Preferred Holders and the Warrant Holders, the "Security
Holders").
Recitals
The Company and certain of the Security Holders are parties to, among other
agreements, the Preferred Stock Subordination Agreement, dated as of May 10,
1996, as amended by that certain Amendment Agreement, dated as of November 22,
1996, that certain Second Amendment Agreement, dated as of May 19, 1997, that
certain Transfer, Assignment and Assumption Agreement and Third Amendment
Agreement, dated as of January 1, 1998, that certain Transfer, Assignment and
Assumption Agreement and Fourth Amendment Agreement dated, as of July 22, 1998,
and that certain Fifth Amendment Agreement dated as of March 9, 1999 (as so
amended, the "Preferred Subordination Agreement").
The Company and certain of the Security Holders have entered into a Series
D-1Preferred Stock Purchase Agreement, dated as of April 27, 2001 (the "Series
D-1 Purchase Agreement"), providing, among other things, for the purchase by
such Security Holders of up to 70,000 shares of Series D-1 Preferred Stock of
the Company (such Security Holders hereinafter referred to as the "Purchasers").
The Company and certain of the Preferred Holders are parties to a Series C
Preferred Stock Exchange Agreement (the "Series C Exchange Agreement"), dated as
of April 27, 2001, providing, among other things, for the exchange by certain
Preferred Holders of 1,409,375 shares of Series C Preferred Stock of the Company
for 1,409,375 shares of Series C Preferred Stock and 251,420 shares of Series
C-i Preferred Stock of the Company.
The Company and the Security Holders are parties to a Third Amended and
Restated Shareholders Agreement, dated as of April 27, 2001 (as in effect from
time to time, the "Shareholders Agreement").
The parties hereto desire to take the actions contemplated by this
Agreement in order to facilitate the transactions contemplated by the Series D-1
Purchase Agreement.
Capitalized terms not defined elsewhere herein shall have the respective
meanings assigned to them in the Shareholders Agreement or in the Articles of
Incorporation of the Company, as amended (the "Articles of Incorporation"), as
applicable.
In consideration of the premises and the agreements herein contained, and
intending to be bound hereby, the parties hereby agree as follows:
1. Addition of Purchasers as Parties to the Preferred Subordination
Agreement. The
parties hereto hereby consent to and approve of the addition of the Purchasers
as parties to the Preferred Subordination Agreement, and acknowledge and agree
that such Purchasers shall be bound by all of the terms and conditions of such
agreement, as amended hereby and as from time to time in effect, and that such
terms and conditions shall inure to the benefit of the Purchasers.
2. Amendments to the Preferred Subordination Agreement.
(a) The parties hereto that are parties to the Preferred Subordination
Agreement hereby agree that the Preferred Subordination Agreement shall be
amended by deleting the definitions of the terms "Preferred Stock" and "Purchase
Agreement" in their entirety and substituting the following in lieu thereof:
"Preferred Stock" shall mean the Company's preferred stock, $.01 par value
per share, as authorized by the Company's Articles of Incorporation as
filed and in effect on April 27, 2001, and as the same may be amended from
time to time.
"Purchase Agreement" shall mean the Senior Subordinated Note and Warrant
Purchase Agreement, dated as of May 10, 1996, as supplemented and modified
by (i) the Senior Subordinated Note and Warrant Purchase Agreement, dated
as of November 22, 1996, and (ii) the Senior Subordinated Note and Warrant
Purchase Agreement, dated as of May 19, 1997, as amended by that certain
Amendment, dated as of March 13, 1998, that certain Second Amendment, dated
as of January 13, 1999, that certain Termination of Put Rights, dated as of
June 15, 1998, that certain Third Amendment, dated as of March 9, 1999, and
that certain Fourth Amendment, dated as of February 4, 2000.
(b) Except as amended hereby, the Preferred Subordination Agreement shall
remain in full force and effect.
3. Amendments to the Series A Purchase Agreement.
(a) The parties hereto that are parties to the Series A Purchase Agreement
hereby agree that the Series A Purchase Agreement shall be amended as follows:
(i) Section 4D(iv) shall be amended by deleting such section in its
entirety and substituting the following in lieu thereof:
"(iv) issue any capital stock, options, warrants or rights to purchase
or acquire capital stock, or any other Equity Securities, other than
(A) pursuant to the 1999 Stock Plan and the 2001 Stock Plan, (B) upon
conversion of shares of Series A Preferred Stock, (C) upon conversion
of shares of Series B Preferred Stock, (D) upon conversion of shares
of Series C Preferred Stock, (E) pursuant to the Series C Exchange
Agreement, (F) upon conversion of the Series D-l Preferred Stock, (G)
pursuant to the Series D-1 Purchase Agreement, (H) the issuance of the
Warrant Shares upon the exercise of the Warrants or (I) the Class A
Common Stock issuable upon conversion of any outstanding
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Class B Common Stock (capitalized terms used in this section shall
have the meanings ascribed to them in the Articles of
Incorporation);".
(ii) Section 4D(vi) shall be amended by deleting such section in its
entirety and substituting the following in lieu thereof:
"(vi) purchase, redeem or otherwise acquire or retire for value any of
its capital stock or other Equity Securities or declare or make any
dividend or other distribution with respect to any of its capital
stock or other Equity Securities (other than dividends or
distributions on shares of Common Stock and consisting solely of
shares of Common Stock of the same class), except that this section
shall not prevent the repurchase by the Company of (A) capital stock
from employees at cost pursuant to agreements with such employees
approved by the Board of Directors (with a majority of the Purchaser
Directors concurring) or (B) Preferred Stock and Common Stock required
under Article IV, Part 3 of the Articles of Incorporation (capitalized
terms used in this section shall have the meanings ascribed to them in
the Articles of Incorporation);".
(iii) Section 6 shall be amended by inserting the following
definition:
"Articles of Incorporation" means the Articles of Incorporation of the
Company, as amended."
(b) Except as amended hereby, the Series A Purchase Agreement shall remain
in full force and effect.
4. Amendments to the Series B Purchase Agreement.
(a) The parties hereto that are parties to the Series B Purchase Agreement
hereby agree that the Series B Purchase Agreement shall be amended as follows:
(i) Section 7D(ii) shall be amended by deleting such section in its
entirety and substituting the following in lieu thereof:
"(ii) issue any capital stock, options, warrants or rights to purchase
or acquire capital stock, or any other Equity Securities, other than
(A) pursuant to the 1999 Stock Plan and the 2001 Stock Plan, (B) upon
conversion of shares of Series A Preferred Stock, (C) upon conversion
of shares of Series B Preferred Stock, (D) upon conversion of shares
of Series C Preferred Stock, (E) pursuant to the Series C Exchange
Agreement, (F) upon conversion of the Series D-l Preferred Stock, (G)
pursuant to the Series D-l Purchase Agreement, (H) the issuance of the
Warrant Shares upon the exercise of the Warrants or (I) the Class A
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Common Stock issuable upon conversion of any outstanding Class B
Common Stock (capitalized terms used in this section shall have the
meanings ascribed to them in the Articles of Incorporation);".
(ii) Section 7D(viii) shall be amended by deleting such section in its
entirety and substituting the following in lieu thereof:
"(viii) purchase, redeem or otherwise acquire or retire for value any
of its capital stock or other Equity Securities or declare or make any
dividend or other distribution with respect to any of its capital
stock or other Equity Securities (other than dividends or
distributions on shares of Common Stock and consisting solely of
shares of Common Stock of the same class), except that this section
shall not prevent the repurchase by the Company of (A) capital stock
from employees at cost pursuant to agreements with such employees
approved by the Board of Directors (with a majority of the Purchaser
Directors concurring) or (B) Preferred Stock and Common Stock required
under Article IV, Part 3 of the Articles of Incorporation (capitalized
terms used in this section shall have the meanings ascribed to them in
the Articles of Incorporation);".
(b) Except as amended hereby, the Series B Purchase Agreement shall remain
in full force and effect.
5. Amendments to the Note Agreement.
(a) The parties hereto that are parties to the Note Agreement hereby agree
that the Note Agreement shall be amended as follows:
(i) Section 1.01 shall be amended by inserting the following
definition:
"Articles of Incorporation" means the Articles of Incorporation of the
Company, as amended."
(ii) Section 7.02(g) shall be amended by deleting the text "Without
the written consent of the Purchasers," the first time it appears in such
provision and substituting the following in lieu thereof:
"Without the written consent of the holders of the Notes,"
(iii) Section 7.02(g)(iv) shall be amended by deleting such subsection
in its entirety and substituting the following in lieu thereof:
"the Company from issuing Equity Securities (A) pursuant to the 1999
Stock Plan and the 2001 Stock Plan, (B) upon conversion of shares of
Series A Preferred Stock, (C) upon conversion of shares of Series B
Preferred Stock, (D) upon conversion of shares of
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Series C Preferred Stock, (E) pursuant to the Series C Exchange
Agreement, (F) upon conversion of the Series D-1 Preferred Stock, (G)
pursuant to the Series DI Purchase Agreement, (H) the issuance of the
Warrant Shares upon the exercise of the Warrants or (I) the Class A
Common Stock issuable upon conversion of any outstanding Class B
Common Stock (capitalized terms used in this section shall have the
meanings ascribed to them in the Articles of Incorporation).".
(iv) Section 7.02(1) shall be amended by deleting such subsection in
its entirety and substituting the following in lieu thereof:
"Make, or permit any Subsidiary to make, any Capital Expenditure
during the fiscal year ending June 30, 2001 if, after giving effect
thereto, the aggregate amount of all Capital Expenditures made by the
Company and its Subsidiaries during such fiscal year would exceed Four
Million Eight Hundred Thousand Dollars ($4,800,000), provided that the
Company may, during the fiscal year ending June 30, 2001, carry
forward up to Four Hundred Thousand Dollars ($400,000) of permitted
but unused Capital Expenditures from the immediately preceding fiscal
year, and provided further, that in no event shall Capital
Expenditures exceed Five Million Two Hundred Thousand Dollars
($5,200,000) in such fiscal year. During the fiscal year ending June
30, 2002 and during each fiscal year thereafter, the Company will not,
and will not permit any Subsidiary to, make any Capital Expenditure
if, after giving effect thereto, the aggregate amount of all Capital
Expenditures made by the Company and its Subsidiaries during such
fiscal year would exceed Two Million Three Hundred Thousand Dollars
($2,300,000), provided that the Company may, during the fiscal year
ending June 30, 2002 and during any fiscal year thereafter, carry
forward up to Four Hundred Thousand Dollars ($400,000) of permitted
but unused Capital Expenditures from the immediately preceding fiscal
year, and provided further, that in no event shall Capital
Expenditures exceed Two Million Seven Hundred Thousand Dollars
($2,700,000) in any such fiscal year."
(b) Except as amended hereby, the Note Agreement shall remain in full force
and effect.
6. Consents, Waivers and Non-Contravention. Subject to compliance by the
Purchasers with the terms of this Agreement, each of the Security Holders (other
than the Purchasers, and, with respect to clause (e) only, the holders of the
Series C Preferred Stock) hereby (a) consents to the issuance of the shares of
Series D-1 Preferred Stock to the Purchasers pursuant to the terms of the Series
D-1 Purchase Agreement and the adoption of the Articles of Amendment (as defined
in the Series D-l Purchase Agreement), (b) consents to the exchange of
4
the existing Series C Preferred Stock for the newly designated Series C
Preferred Stock and Series C-i Preferred Stock pursuant to the Series C Exchange
Agreement, (c) agrees that such issuance and adoption and such exchange will not
constitute a breach or default under any of the Series A Purchase Agreement, the
Series B Purchase Agreement, the Series C Purchase Agreement, the Note Agreement
or the Credit Agreement, (d) other than with respect to the Series C Preferred
Stock, agrees that such issuance and adoption and such exchange will not trigger
any anti-dilution provisions under the Series A Purchase Agreement, the Series B
Purchase Agreement, the Note Agreement, the Preferred B Warrants, the Heller
Warrant Agreement, the Mezzanine Warrants or any other agreement, (e) waives any
anti-dilution rights arising as a result of such issuance and adoption or such
exchange that such Security Holder may have pursuant to any agreement and (f)
waives any preemptive or similar rights arising as a result of such issuance and
adoption or such exchange that such Security Holder may have pursuant to any
other agreement.
7. Miscellaneous.
(a) Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when delivered personally or by
cable, telex, facsimile transmission, telegram or overnight delivery service, or
72 hours after having been mailed by certified or registered mail, return
receipt requested and postage prepaid, to the recipient. Such notices, demands
and other communications will be sent to each party at such party's address set
forth on the Schedule of Preferred Holders, Schedule of Warrant Holders or
Schedule of Common Shareholders, as the case may.
(b) Governing Law. The construction, validity and interpretation of this
Agreement will be governed by the internal 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.
(c) Entire Agreement. This Agreement and the addendum, exhibits and
schedules hereto embody the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings relating to such subject matter.
(d) Amendment and Waiver. No amendment, modification or waiver of this
Agreement or any provision hereof shall be effective unless made by the written
agreement of all of the parties hereto.
(e) Further Assurances. Each party to this Agreement hereby covenants and
agrees, without the necessity of any further consideration, to execute and
deliver any and all such further documents and take any and all such other
actions as may be necessary or appropriate to carry out the intent and purposes
of this Agreement and to consummate the transactions contemplated herein.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
be one and the same document
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(g) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
* * * *
6
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
COMPANY:
MONITRONICS INTERNATIONAL, INC.
By: /s/ James R. Hull
-------------------------------------
President and CEO
SECURITY HOLDERS:
AUSTIN VENTURES III-A, L.P.
By: AV Partners III, L.P.,
Its General Partner
By: /s/ Blaine F. Wesner
---------------------------------
Blaine F. Wesner,
Authorized Signatory
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 Partner 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 H, L.P.,
Its General Partner
By: /s/ illegible signature
---------------------------------
General Partner
WINDWARD CAPITAL PARTNERS II, L.P.
By: Windward Capital GP II, LLC,
Its General Partner
By:
---------------------------------
Peter S. Macdonald,
Managing Member
WINDWARD CAPITAL LP II, LLC
By:
-------------------------------------
Peter S. Macdonald,
Managing Member
HULL FAMILY LIMITED PARTNERSHIP, L.P.
By: James R. Hull Management Trust,
Its General Partner
By:
---------------------------------
James R. Hull, Trustee
AUSTIN VENTURES V AFFILIATES FUND, L.P.
By: AV Partner V, L.P.,
Its General Partner
By:
---------------------------------
Blaine F. Wesner
General Partner
CAPITAL RESOURCE LENDERS II L.P.
By: Capital Resource Partners H, L.P.,
Its General Partner
By:
---------------------------------
General Partner
WINDWARD CAPITAL PARTNERS II, L.P.
By: Windward Capital GP II, LLC,
Its General Partner
By: /s/ Peter S. Macdonald
---------------------------------
Peter S. Macdonald,
Managing Member
WINDWARD CAPITAL LP II, LLC
By: /s/ Peter S. Macdonald
-------------------------------------
Peter S. Macdonald,
Managing Member
HULL FAMILY LIMITED PARTNERSHIP, L.P.
By: James R. Hull Management Trust,
Its General Partner
By:
---------------------------------
James R. Hull, Trustee
AUSTIN VENTURES V AFFILIATES FUND, L.P.
By: AV Partner V, L.P.,
Its General Partner
By:
---------------------------------
Blaine F. Wesner
General Partner
CAPITAL RESOURCE LENDERS II L.P.
By: Capital Resource Partners H, L.P.,
Its General Partner
By:
---------------------------------
General Partner
WINDWARD CAPITAL PARTNERS II, L.P.
By: Windward Capital GP II, LLC,
Its General Partner
By:
---------------------------------
Peter S. Macdonald,
Managing Member
WINDWARD CAPITAL LP II, LLC
By:
-------------------------------------
Peter S. Macdonald,
Managing Member
HULL FAMILY LIMITED PARTNERSHIP, L.P.
By: James R. Hull Management Trust,
Its General Partner
By: /s/ James R. Hull
---------------------------------
James R. Hull, Trustee
/s/ Robert N. Sherman
-----------------------------------------
Robert N. Sherman
/s/ Michael Meyers
-----------------------------------------
Michael Meyers
/s/ Stephen Hedrick
-----------------------------------------
Stephen Hedrick
/s/ Michael Gregory
-----------------------------------------
Michael Gregory
PURCHASERS:
ABRY PARTNERS IV, L.P.
By: ABRY Capital Partners, L.P.,
Its General Partner
By: ABRY Capital Partners, LLC,
Its General Partner
By:
-----------------------------
Name:
Title:
ABRY INVESTMENT PARTNERSHIP, L.P.
By: ABRY Investment GP, LLC,
Its General Partner
By:
---------------------------------
Name:
Title:
-----------------------------------------
Robert N. Sherman
-----------------------------------------
Michael Meyers
-----------------------------------------
Stephen Hedrick
-----------------------------------------
Michael Gregory
PURCHASERS:
ABRY PARTNERS IV, L.P.
By: ABRY Capital Partners, L.P.,
Its General Partner
By: ABRY Capital Partners, LLC,
Its General Partner
By: /s/ Jay Grossman
-----------------------------
Name: Jay Grossman
Title: Vice President
ABRY INVESTMENT PARTNERSHIP, L.P.
By: ABRY Investment GP, LLC,
Its General Partner
By: /s/ Jay Grossman
---------------------------------
Name: Jay Grossman
Title: Vice President
SCHEDULE OF PREFERRED HOLDERS
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, TX 78701
Facsimile: (512) 476-3952
Attn: Blaine F. Wesner
Capital Resource Lenders II, L.P.
c/o Capital Resource Partners
85 Merrimac Street
Suite 200
Boston, MA 02114
Facsimile: (617) 723-9819
Attn: Stephen M. Jenks
Windward Capital Partners II, L.P.
Windward Capital II L.P., LLC
1177 Avenue of the Americas
42nd Floor
New York, NY 10036
Facsimile: (212) 382-6534
Attn: Peter S. Macdonald
ABRY Partners IV, L.P.
ABRY Investment Partnership, L.P.
18 Newbury Street
Boston, MA 02116
Facsimile: (617) 859-7205
Attn: Jay Grossman
SCHEDULE OF WARRANT HOLDERS
Capital Resource Lenders II, L.P.
c/o Capital Resource Partners
85 Merrimac Street
Suite 200
Boston, MA 02114
Facsimile: (617) 723-9819
Attn: Stephen M. Jenks
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, TX 78701
Facsimile: (512) 476-3952
Attn: Blaine F. Wesner
SCHEDULE OF COMMON SHAREHOLDERS
1. Hull Family Limited Partnership, L.P.
c/o Monitronics International, Inc.
12801 Stemmons Freeway
Suite 821
Dallas, TX 75234
Facsimile: (972) 919-1985
3. Michael Meyers
c/o Monitronics International, Inc.
12801 Stemmons Freeway
Suite 821
Dallas, TX 75234
Facsimile: (972) 919-1985
4. Stephen Hedrick
c/o Monitronics International, Inc.
12801 Stemmons Freeway
Suite 821
Dallas, TX 75234
Facsimile: (972) 919-1985
5. Michael Gregory
c/o Monitronics International, Inc.
12801 Stemmons Freeway
Suite 821
Dallas, TX 75234
Facsimile: (972) 919-1985