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Item 1.01
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Entry into a Material Definitive Agreement.
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On July 10, 2017, Cinedigm Corp.
(the “Company”) entered into two Exchange Agreements (the “Exchange Agreements”) with certain
beneficial owners of Notes (collectively, the “holders”) representing in the aggregate approximately 99%, or
approximately $50 million, of the outstanding principal amount of the Company’s outstanding 5.5% Convertible Senior
Notes due 2035 (the “Notes”) pursuant to which the holders thereof will exchange their outstanding Notes for a
combination of cash, shares of the Company’s Class A common stock, par value $0.001 per share (the “Common
Stock”), and second lien notes (the “Second Lien Notes”) issued pursuant to the Company’s Second Lien
Loan Agreement dated as of July 14, 2016 among the Company, Cortland Capital Market Services LLC, as Agent, and the lenders
party thereto, as amended (the “Note Exchanges”). The Note Exchanges are expected to occur over time and be
completed concurrently with the closing of the previously announced sale of Common Stock to Bison Entertainment Investment
Limited, a wholly owned subsidiary of Bison Holding Company Ltd. (“Bison Capital”) (together, the
“Transactions”), pursuant to the previously disclosed Stock Purchase Agreement dated as of June 29, 2017 between
the Company and Bison Capital (the “Stock Purchase Agreement”).
Both Exchange Agreements provide for the holders of Notes to
exchange their Notes for cash and shares of Common Stock at a ratio of $350 in cash and 73.33 shares of Common Stock per $1,000
of Notes (the “Exchange Ratio”). One Exchange Agreement also provides for the holder party thereto to exchange $1,827,000
principal amount of its Notes for $1,462,000 principal amount of Second Lien Notes, which exchange is to occur shortly after execution
of the Exchange Agreement, and prior to any other exchanges with such holder. All Notes other than those Notes exchanged for Second
Lien Notes, may be surrendered by any holder party to an Exchange Agreement in exchange for the Common Stock portion of the Exchange
Ratio. Holders of Notes who did not receive Second Lien Notes will exchange $1,143,000 principal amount of their Notes for 761,993
shares of Common Stock (exclusive of fractional shares), which exchange is to occur shortly after execution of the Exchange Agreement.
Holders of Notes may surrender Notes in exchange for Common Stock periodically until the closing of the Transactions. Prior to
closing the Transactions, the Company shall not issue more than 19.99% of the Common Stock of the Company outstanding as of the
date of signing the Exchange Agreements. At Closing, the holders will exchange all of their remaining Notes for cash and shares
such that all of the exchanges with such holders (other than the exchange for Second Lien Notes), in the aggregate, reflect the
Exchange Ratio. The Company has agreed with certain holders that the number of shares of Common Stock deliverable at closing of
the Transactions is subject to reduction in the event the volume weighted average price of the Common Stock for the 15 business
days prior to the closing of the Transactions (the “Reference Price”) is greater than $2.50, in which case the number
of shares of Common Stock deliverable is reduced by multiplying the shares deliverable to such Holder by a fraction equal to $2.50
divided by the Reference Price. Unless the number of shares is reduced as described, the aggregate number of shares of Common Stock
that may be issued pursuant to the Note Exchanges is 3,536,792 shares. In addition, for the same holders, in the event at the closing
of the Transactions the Reference Price is less than $1.50, the Company will be obligated to pay to holders an additional amount
of cash equal to the positive difference between $1.50 and the Reference Price, in which case the Company may also elect to deliver
cash in the amount of $1.50 per share of Common Stock in lieu of issuing any shares to the holder of Notes. Any accrued and unpaid
interest on the exchanged Notes will be paid in cash, and such Notes will be immediately canceled, upon surrender. The Exchange
Agreements may be terminated under certain circumstances, including if the Transactions are not consummated under the Stock Purchase
Agreement.
The Company expects to hold a meeting of stockholders in the
third quarter of 2017 at which time it will seek the approval of its stockholders of the Transactions, including the issuance of
the shares of Common Stock pursuant to the Note Exchanges in excess of the 19.99% limit.
The Transactions, including the Note Exchanges, are subject
to a number of closing conditions, including the receipt of stockholder, lender and regulatory approvals including CFIUS approval.
The foregoing description of the Exchange Agreements is qualified
in its entirety by reference to such agreements, which are filed as Exhibits 10.1 and 10.2 attached hereto. The Stock Purchase
Agreement is filed as Exhibit 10.3 attached hereto.
On July 10, 2017, the Company issued a press release announcing
the Note Exchanges, a copy of which is attached hereto as Exhibit 99.1.