Delaware
|
|
22-3720962
|
(State or Other Jurisdiction of Incorporation or Organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
902 Broadway, 9th Floor New York, NY
|
|
10010
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Securities registered pursuant to Section 12(b) of the Act:
|
|
|
|
|
|
Title of each class
|
|
Name of each exchange on which registered
|
CLASS A COMMON STOCK, PAR VALUE $0.001 PER SHARE
|
|
NASDAQ GLOBAL MARKET
|
|
|
|
Securities registered pursuant to Section 12(g) of the Act:
|
|
NONE
|
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
|
Yes
o
No
x
|
|
|
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.
|
Yes
o
No
x
|
|
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|
Yes
x
No
o
|
|
|
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
|
Yes
x
No
o
|
|
|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
|
o |
|
|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
|
o
|
|
Page
|
|
FORWARD-LOOKING STATEMENTS
|
||
|
||
PART I
|
||
ITEM 1.
|
Business
|
|
ITEM 1A.
|
Risk Factors
|
|
ITEM 2.
|
Property
|
|
ITEM 3.
|
Legal Proceedings
|
|
ITEM 4.
|
Mine Safety Disclosures
|
|
|
||
PART II
|
||
ITEM 5.
|
Market for Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
|
|
ITEM 6.
|
Selected Financial Data
|
|
ITEM 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
ITEM 8.
|
Financial Statements and Supplementary Data
|
|
ITEM 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
|
ITEM 9A.
|
Controls and Procedures
|
|
ITEM 9B.
|
Other Information
|
|
|
||
PART III
|
||
ITEM 10.
|
Directors, Executive Officers and Corporate Governance
|
|
ITEM 11.
|
Executive Compensation
|
|
ITEM 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
|
|
ITEM 13.
|
Certain Relationships and Related Transactions
|
|
ITEM 14.
|
Principal Accountant Fees and Services
|
|
|
||
PART IV
|
||
ITEM 15.
|
Exhibits, Financial Statement Schedules
|
|
|
|
|
SIGNATURES
|
•
|
successful execution of our business strategy, particularly for new endeavors;
|
•
|
the performance of our targeted markets;
|
•
|
competitive product and pricing pressures;
|
•
|
changes in business relationships with our major customers;
|
•
|
successful integration of acquired businesses;
|
•
|
the content we distribute through our in-theatre, on-line and mobile services may expose us to liability;
|
•
|
general economic and market conditions;
|
•
|
the effect of our indebtedness on our financial condition and financial flexibility, including, but not limited to, the ability to obtain necessary financing for our business; and
|
•
|
the other risks and uncertainties that are set forth in Item 1, “Business”, Item 1A "Risk Factors"
and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.
|
•
|
Three years of history operating OTT channels with millions of downloads, hundreds of thousands of registered users, and hundreds of millions of discrete data points on our customer’s behavior and preferences,
|
•
|
The enormous depth and breadth of our almost 50,000 title film and television episode library,
|
•
|
Our digital assets and deep, long-standing relationships as launch partners that cover the major digital platforms and devices,
|
•
|
Our marketing expertise,
|
•
|
Our flexible releasing strategies, which differ from larger entertainment companies that need to protect their legacy businesses,
|
•
|
Our strengthened capital base, and
|
•
|
Our experienced management team
|
•
|
Anchor Bay Entertainment
|
•
|
Entertainment One (eOne) Ltd.
|
•
|
IFC Entertainment
|
•
|
Lionsgate Entertainment
|
•
|
Magnolia Pictures
|
•
|
Pureflix
|
•
|
RLJ Entertainment, Inc.
|
•
|
Warner Brothers Digital Networks
|
•
|
AMC Networks
|
Operations of:
|
|
Products and services provided:
|
Cinedigm Digital Funding I, LLC (“Phase 1 DC”)
|
|
Financing vehicles and administrators for 3,724 Systems installed nationwide in Phase 1 DC's deployment to theatrical exhibitors. We retain ownership of the Systems and the residual cash flows related to the Systems after the repayment of all non-recourse debt at the expiration of exhibitor, master license agreements. As of March 31, 2017, we are no longer earning virtual print fees ("VPFs") revenues from certain major studios on 2,467 of such systems.
|
Access Digital Cinema Phase 2 Corp. (“Phase 2 DC”)
|
|
Financing vehicles and administrators for our 8,904 Systems installed in the second digital cinema deployment and international deployments, through Phase 2 DC. We retain no ownership of the residual cash flows and digital cinema equipment after the completion of cost recoupment and at the expiration of the exhibitor master license agreements.
|
•
|
requiring a substantial portion of our cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities;
|
•
|
limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes;
|
•
|
limiting our ability to pursue our growth strategy or, including restricting us from making strategic acquisitions or causing us to make nonstrategic divestitures;
|
•
|
placing us at a disadvantage compared to our competitors who are less leveraged and may be better able to use their cash flow to fund competitive responses to changing industry, market or economic conditions; and
|
•
|
making us more vulnerable in the event of a downturn in our business, our industry or the economy in general.
|
•
|
limited operating experience;
|
•
|
net losses;
|
•
|
lack of sufficient customers or loss of significant customers;
|
•
|
a changing business focus;
|
•
|
the downward trend in sales of physical DVD and Blu-ray discs;
|
•
|
rapidly-changing technology for some of the products and services we offer; and
|
•
|
difficulties in managing potentially rapid growth.
|
•
|
rights to certain domain names;
|
•
|
registered service marks on certain names and phrases;
|
•
|
various unregistered trademarks and service marks;
|
•
|
film, television and other forms of viewing content;
|
•
|
know-how; and
|
•
|
rights to certain logos.
|
•
|
limiting our ability to obtain necessary financing in the future; and
|
•
|
requiring us to dedicate a substantial portion of our cash flow to payments on our debt obligations, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other corporate requirements or expansion of our business.
|
•
|
Limiting our ability to obtain necessary financing in the future; and
|
•
|
requiring them to dedicate a substantial portion of their cash flow to payments on their debt obligations, thereby reducing the availability of their cash flow for other uses.
|
•
|
make certain capital expenditures and investments;
|
•
|
incur other indebtedness or liens;
|
•
|
create or acquire subsidiaries which do not guarantee the obligations or foreign subsidiaries;
|
•
|
engage in a new line of business;
|
•
|
pay dividends;
|
•
|
sell assets;
|
•
|
amend certain agreements;
|
•
|
acquire, consolidate with, or merge with or into other companies; and
|
•
|
enter into transactions with affiliates.
|
•
|
dispose of or incur other liens on the digital cinema projection systems financed by KBC;
|
•
|
engage in a new line of business;
|
•
|
sell assets outside the ordinary course of business or on other than arm’s length terms;
|
•
|
make payments to majority owned affiliated companies; and
|
•
|
consolidate with, or merge with or into other companies.
|
•
|
make certain capital expenditures and investments;
|
•
|
incur other indebtedness or liens;
|
•
|
engage in a new line of business;
|
•
|
sell assets;
|
•
|
acquire, consolidate with, or merge with or into other companies; and
|
•
|
enter into transactions with affiliates.
|
•
|
make certain capital expenditures and investments;
|
•
|
incur other indebtedness or liens;
|
•
|
engage in a new line of business;
|
•
|
sell assets;
|
•
|
acquire, consolidate with, or merge with or into other companies; and
|
•
|
enter into transactions with affiliates.
|
•
|
incur liens on the digital cinema projection systems financed; and
|
•
|
sublease, assign or modify the digital cinema projection systems financed.
|
•
|
reducing capital expenditures;
|
•
|
reducing our overhead costs and/or workforce;
|
•
|
reducing research and development efforts;
|
•
|
selling assets;
|
•
|
restructuring or refinancing our remaining indebtedness; and
|
•
|
seeking additional funding.
|
•
|
defamation;
|
•
|
invasion of privacy;
|
•
|
negligence;
|
•
|
copyright or trademark infringement (as discussed above); and
|
•
|
other claims based on the nature and content of the materials distributed.
|
•
|
actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;
|
•
|
changes in the market’s expectations about our operating results;
|
•
|
success of competitors;
|
•
|
our operating results failing to meet the expectation of securities analysts or investors in a particular period;
|
•
|
changes in financial estimates and recommendations by securities analysts concerning us, the market for digital and physical content, content distribution and entertainment in general;
|
•
|
operating and stock price performance of other companies that investors deem comparable to us;
|
•
|
our ability to market new and enhanced products on a timely basis;
|
•
|
changes in laws and regulations affecting our business or our industry;
|
•
|
commencement of, or involvement in, litigation involving us;
|
•
|
changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;
|
•
|
the volume of shares of the Class A common stock available for public sale;
|
•
|
any major change in our board of directors or management;
|
•
|
sales of substantial amounts of Class A common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and
|
•
|
general economic and political conditions such as recessions, interest rates, international currency fluctuations and acts of war or terrorism.
|
•
|
a restriction on certain acquisitions of our common stock to help preserve our ability to utilize our significant NOLs by avoiding the limitations imposed by Section 382 of the Code;
|
•
|
no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
|
•
|
the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
|
•
|
the ability of our board of directors to determine to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
|
•
|
the requirement that an annual meeting of stockholders may be called only by the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;
|
•
|
limiting the liability of, and providing indemnification to, our directors and officers;
|
•
|
controlling the procedures for the conduct and scheduling of stockholder meetings; and
|
•
|
providing that directors may be removed prior to the expiration of their terms by the Board of Directors only for cause.
|
|
|
|
|
|
||
Location
|
|
Square Feet (Approx.)
|
|
Lease Expiration Date
|
|
Primary Use
|
Sherman Oaks, California
|
|
11,600
|
|
March 2022
|
|
Primary operations, sales, marketing and administrative offices for our Content & Entertainment Group. In addition, certain operations and administration for our other business segments.
|
Manhattan Borough of New York City
|
|
16,500
|
|
July 2017
|
|
Corporate executive and administrative headquarters. Shared between all business segments.
|
|
|
For the Fiscal Year Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
HIGH
|
|
LOW
|
|
HIGH
|
|
LOW
|
April 1 – June 30
|
|
$2.70
|
|
$1.21
|
|
$15.80
|
|
$7.10
|
July 1 – September 30
|
|
$2.40
|
|
$0.90
|
|
$7.40
|
|
$5.20
|
October 1 – December 31
|
|
$2.35
|
|
$1.27
|
|
$6.80
|
|
$2.50
|
January 1 – March 31
|
|
$1.69
|
|
$1.25
|
|
$3.10
|
|
$2.10
|
|
For the Fiscal Years Ended March 31,
|
||||||||||||||||||
Statement of Operations Data
|
(In thousands, except for share and per share data)
|
||||||||||||||||||
Related to Continuing Operations:
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Revenues
|
$
|
90,394
|
|
|
$
|
104,449
|
|
|
$
|
105,484
|
|
|
$
|
104,328
|
|
|
$
|
81,092
|
|
Direct operating (exclusive of depreciation and amortization shown below)
|
25,121
|
|
|
31,341
|
|
|
30,109
|
|
|
28,920
|
|
|
8,515
|
|
|||||
Selling, general and administrative
|
23,776
|
|
|
33,367
|
|
|
31,120
|
|
|
26,333
|
|
|
20,805
|
|
|||||
Provision (benefit) for doubtful accounts
|
1,213
|
|
|
789
|
|
|
(206
|
)
|
|
394
|
|
|
478
|
|
|||||
Restructuring, transition and acquisitions expenses, net
|
87
|
|
|
1,130
|
|
|
2,638
|
|
|
1,533
|
|
|
857
|
|
|||||
Goodwill impairment
|
—
|
|
|
18,000
|
|
|
6,000
|
|
|
—
|
|
|
—
|
|
|||||
Litigation and related, net of recovery in 2016
|
—
|
|
|
(2,228
|
)
|
|
1,282
|
|
|
—
|
|
|
—
|
|
|||||
Depreciation and amortization of property and equipment
|
27,722
|
|
|
37,344
|
|
|
37,519
|
|
|
37,289
|
|
|
36,359
|
|
|||||
Amortization of intangible assets
|
5,718
|
|
|
5,852
|
|
|
5,864
|
|
|
3,473
|
|
|
1,538
|
|
|||||
Total operating expenses
|
83,637
|
|
|
125,595
|
|
|
114,326
|
|
|
97,942
|
|
|
68,552
|
|
|||||
(Loss) income from operations
|
6,757
|
|
|
(21,146
|
)
|
|
(8,842
|
)
|
|
6,386
|
|
|
12,540
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
73
|
|
|
82
|
|
|
101
|
|
|
98
|
|
|
48
|
|
|||||
Interest expense
|
(19,068
|
)
|
|
(20,642
|
)
|
|
(19,899
|
)
|
|
(19,755
|
)
|
|
(28,314
|
)
|
|||||
Debt prepayment fees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,725
|
)
|
|||||
Loss on extinguishment of notes payable
|
(1,063
|
)
|
|
(931
|
)
|
|
—
|
|
|
—
|
|
|
(7,905
|
)
|
|||||
Debt conversion expense
|
(4,352
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Gain on termination of capital lease
|
2,535
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
(Loss) income on investment in non-consolidated entity
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,812
|
)
|
|
322
|
|
|||||
Other income, net
|
31
|
|
|
513
|
|
|
105
|
|
|
444
|
|
|
654
|
|
|||||
Change in fair value of interest rate derivatives
|
142
|
|
|
(40
|
)
|
|
(441
|
)
|
|
679
|
|
|
1,231
|
|
|||||
Loss from continuing operations before benefit from income taxes
|
(14,945
|
)
|
|
(42,164
|
)
|
|
(28,976
|
)
|
|
(13,960
|
)
|
|
(25,149
|
)
|
|||||
Income tax (expense) benefit
|
(252
|
)
|
|
(345
|
)
|
|
—
|
|
|
—
|
|
|
4,944
|
|
|||||
Loss from continuing operations
|
(15,197
|
)
|
|
(42,509
|
)
|
|
(28,976
|
)
|
|
(13,960
|
)
|
|
(20,205
|
)
|
|||||
Income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
100
|
|
|
(11,904
|
)
|
|
(861
|
)
|
|||||
Loss on sale of discontinued operations
|
—
|
|
|
—
|
|
|
(3,293
|
)
|
|
—
|
|
|
—
|
|
|||||
Net loss
|
(15,197
|
)
|
|
(42,509
|
)
|
|
(32,169
|
)
|
|
(25,864
|
)
|
|
(21,066
|
)
|
|||||
Net loss attributable to noncontrolling interest
|
68
|
|
|
767
|
|
|
861
|
|
|
—
|
|
|
—
|
|
|||||
Net loss attributable to Cinedigm Corp.
|
(15,129
|
)
|
|
(41,742
|
)
|
|
(31,308
|
)
|
|
(25,864
|
)
|
|
(21,066
|
)
|
|||||
Preferred stock dividends
|
(356
|
)
|
|
(356
|
)
|
|
(356
|
)
|
|
(356
|
)
|
|
(356
|
)
|
|||||
Net loss attributable to common shareholders
|
$
|
(15,485
|
)
|
|
$
|
(42,098
|
)
|
|
$
|
(31,664
|
)
|
|
$
|
(26,220
|
)
|
|
$
|
(21,422
|
)
|
Basic and diluted net loss per share from continuing operations
|
$
|
(1.92
|
)
|
|
$
|
(6.51
|
)
|
|
$
|
(3.71
|
)
|
|
$
|
(2.51
|
)
|
|
$
|
(4.33
|
)
|
Shares used in computing basic and diluted net loss per share
(1)
|
8,049,160
|
|
|
6,467,978
|
|
|
7,678,535
|
|
|
5,708,432
|
|
|
4,751,717
|
|
(1)
|
We incurred net losses for all periods presented and, therefore, the impact of potentially dilutive common stock equivalents and convertible notes have been excluded from the computation of net loss per share from continuing operations as their impact would be anti-dilutive.
|
|
For the Fiscal Years Ended March 31,
|
||||||||||||||||||
|
(In thousands)
|
||||||||||||||||||
Balance Sheet Data (At Period End):
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Cash and cash equivalents and restricted cash
|
$
|
13,566
|
|
|
$
|
34,464
|
|
|
$
|
25,750
|
|
|
$
|
56,966
|
|
|
$
|
20,199
|
|
Working capital (deficit)
|
$
|
(15,411
|
)
|
|
$
|
1,012
|
|
|
$
|
(30,871
|
)
|
|
$
|
(5,002
|
)
|
|
$
|
(17,497
|
)
|
Total assets
|
$
|
151,334
|
|
|
$
|
209,398
|
|
|
$
|
273,017
|
|
|
$
|
336,719
|
|
|
$
|
272,825
|
|
Notes payable, non-recourse
|
$
|
61,104
|
|
|
$
|
112,312
|
|
|
$
|
151,360
|
|
|
$
|
190,874
|
|
|
$
|
230,927
|
|
Total stockholders' (deficit) equity of Cinedigm Corp.
|
$
|
(69,489
|
)
|
|
$
|
(71,842
|
)
|
|
$
|
(18,959
|
)
|
|
$
|
10,227
|
|
|
$
|
(17,314
|
)
|
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
31,699
|
|
|
$
|
25,504
|
|
|
$
|
9,211
|
|
|
$
|
39,594
|
|
|
$
|
29,369
|
|
Net cash provided by (used in) investing activities
|
$
|
(486
|
)
|
|
$
|
(1,389
|
)
|
|
$
|
1,197
|
|
|
$
|
(52,009
|
)
|
|
$
|
(4,250
|
)
|
Net cash (used in) provided by financing activities
|
$
|
(44,128
|
)
|
|
$
|
(17,633
|
)
|
|
$
|
(41,624
|
)
|
|
$
|
49,182
|
|
|
$
|
(29,514
|
)
|
Computer equipment and software
|
3-5 years
|
Digital cinema projection systems
|
10 years
|
Machinery and equipment
|
3-10 years
|
Furniture and fixtures
|
3-6 years
|
|
For the Fiscal Year Ended March 31,
|
|||||||||||||
($ in thousands)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Phase I Deployment
|
$
|
32,068
|
|
|
$
|
36,488
|
|
|
$
|
(4,420
|
)
|
|
(12.1
|
)%
|
Phase II Deployment
|
12,538
|
|
|
12,257
|
|
|
281
|
|
|
2.3
|
%
|
|||
Services
|
11,611
|
|
|
11,782
|
|
|
(171
|
)
|
|
(1.5
|
)%
|
|||
Content & Entertainment
|
34,177
|
|
|
43,922
|
|
|
(9,745
|
)
|
|
(22.2
|
)%
|
|||
|
$
|
90,394
|
|
|
$
|
104,449
|
|
|
$
|
(14,055
|
)
|
|
(13.5
|
)%
|
|
For the Fiscal Year Ended March 31,
|
|||||||||||||
($ in thousands)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Phase I Deployment
|
$
|
1,052
|
|
|
$
|
1,108
|
|
|
$
|
(56
|
)
|
|
(5.1
|
)%
|
Phase II Deployment
|
388
|
|
|
315
|
|
|
73
|
|
|
23.2
|
%
|
|||
Services
|
10
|
|
|
10
|
|
|
—
|
|
|
—
|
%
|
|||
Content & Entertainment
|
23,671
|
|
|
29,908
|
|
|
(6,237
|
)
|
|
(20.9
|
)%
|
|||
|
$
|
25,121
|
|
|
$
|
31,341
|
|
|
$
|
(6,220
|
)
|
|
(19.8
|
)%
|
|
For the Fiscal Year Ended March 31,
|
|||||||||||||
($ in thousands)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Phase I Deployment
|
$
|
544
|
|
|
$
|
661
|
|
|
$
|
(117
|
)
|
|
(17.7
|
)%
|
Phase II Deployment
|
228
|
|
|
121
|
|
|
107
|
|
|
88.4
|
%
|
|||
Services
|
798
|
|
|
914
|
|
|
(116
|
)
|
|
(12.7
|
)%
|
|||
Content & Entertainment
|
15,812
|
|
|
20,659
|
|
|
(4,847
|
)
|
|
(23.5
|
)%
|
|||
Corporate
|
6,394
|
|
|
11,012
|
|
|
(4,618
|
)
|
|
(41.9
|
)%
|
|||
|
$
|
23,776
|
|
|
$
|
33,367
|
|
|
$
|
(9,591
|
)
|
|
(28.7
|
)%
|
|
For the Fiscal Year Ended March 31,
|
|||||||||||||
($ in thousands)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Phase I Deployment
|
$
|
19,263
|
|
|
$
|
28,446
|
|
|
$
|
(9,183
|
)
|
|
(32.3
|
)%
|
Phase II Deployment
|
7,523
|
|
|
7,523
|
|
|
—
|
|
|
—
|
%
|
|||
Content & Entertainment
|
273
|
|
|
330
|
|
|
(57
|
)
|
|
(17.3
|
)%
|
|||
Corporate
|
663
|
|
|
1,045
|
|
|
(382
|
)
|
|
(36.6
|
)%
|
|||
|
$
|
27,722
|
|
|
$
|
37,344
|
|
|
$
|
(9,622
|
)
|
|
(25.8
|
)%
|
|
For the Fiscal Year Ended March 31,
|
|||||||||||||
($ in thousands)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Phase I Deployment
|
$
|
10,154
|
|
|
$
|
12,217
|
|
|
$
|
(2,063
|
)
|
|
(16.9
|
)%
|
Phase II Deployment
|
1,034
|
|
|
1,251
|
|
|
(217
|
)
|
|
(17.3
|
)%
|
|||
Corporate
|
7,807
|
|
|
7,092
|
|
|
715
|
|
|
10.1
|
%
|
|||
|
$
|
18,995
|
|
|
$
|
20,560
|
|
|
$
|
(1,565
|
)
|
|
(7.6
|
)%
|
|
|
For the Fiscal Year Ended March 31,
|
||||||
($ in thousands)
|
|
2017
|
|
2016
|
||||
Net loss
|
|
$
|
(15,197
|
)
|
|
$
|
(42,509
|
)
|
Add Back
:
|
|
|
|
|
||||
Income tax expense
|
|
252
|
|
|
345
|
|
||
Depreciation and amortization of property and equipment
|
|
27,722
|
|
|
37,344
|
|
||
Amortization of intangible assets
|
|
5,718
|
|
|
5,852
|
|
||
Gain on termination of capital lease
|
|
(2,535
|
)
|
|
—
|
|
||
Interest expense, net
|
|
18,995
|
|
|
20,560
|
|
||
Loss on extinguishment of debt
|
|
1,063
|
|
|
931
|
|
||
Debt conversion expense
|
|
4,352
|
|
|
—
|
|
||
Other income, net
|
|
40
|
|
|
(513
|
)
|
||
Change in fair value of interest rate derivatives
|
|
(142
|
)
|
|
40
|
|
||
Provision for doubtful accounts
|
|
1,213
|
|
|
789
|
|
||
Stock-based compensation and expenses
|
|
1,726
|
|
|
1,832
|
|
||
Goodwill impairment
|
|
—
|
|
|
18,000
|
|
||
Restructuring, transition and acquisition expenses, net
|
|
87
|
|
|
1,130
|
|
||
Professional fees pertaining to activist shareholder proposals and compliance
|
|
—
|
|
|
816
|
|
||
Litigation recovery, net of expenses
|
|
—
|
|
|
(2,228
|
)
|
||
Net loss attributable to noncontrolling interest
|
|
68
|
|
|
767
|
|
||
Adjusted EBITDA
|
|
$
|
43,362
|
|
|
$
|
43,156
|
|
|
|
|
|
|
||||
Adjustments related to the Phase I and Phase II Deployments
:
|
|
|
|
|
||||
Depreciation and amortization of property and equipment
|
|
$
|
(26,786
|
)
|
|
$
|
(35,969
|
)
|
Amortization of intangible assets
|
|
(46
|
)
|
|
(46
|
)
|
||
Provision for doubtful accounts
|
|
(946
|
)
|
|
(339
|
)
|
||
Restructuring, acquisitions and transition expenses
|
|
—
|
|
|
—
|
|
||
Income from operations
|
|
(14,616
|
)
|
|
(10,186
|
)
|
||
Adjusted EBITDA from non-deployment businesses
|
|
$
|
968
|
|
|
$
|
(3,384
|
)
|
|
|
|
|
|
•
|
will require that all excess tax benefits and tax deficiencies be recorded as income tax expense or benefit in the statement
|
•
|
will require excess tax benefits from share-based payments to be reported as operating activities on the statement of cash flows; and
|
•
|
permits an accounting policy election to either estimate the number of awards that are expected to vest using an estimated forfeiture rate, as currently required, or account for forfeitures when they occur.
|
|
For the Fiscal Years Ended March 31,
|
||||||
($ in thousands)
|
2017
|
|
2016
|
||||
Net cash provided by operating activities
|
$
|
31,699
|
|
|
$
|
25,504
|
|
Net cash used in investing activities
|
(486
|
)
|
|
(1,389
|
)
|
||
Net cash used in financing activities
|
(44,128
|
)
|
|
(17,633
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
$
|
(12,915
|
)
|
|
$
|
6,482
|
|
|
Payments Due
|
||||||||||||||||||
Contractual Obligations (in thousands)
|
Total
|
|
2017
|
|
2018 &
2019
|
|
2020 &
2021
|
|
Thereafter
|
||||||||||
Long-term recourse debt
|
$
|
77,197
|
|
|
$
|
19,599
|
|
|
$
|
7,027
|
|
|
$
|
—
|
|
|
$
|
50,571
|
|
Long-term non-recourse debt
(1)
|
70,943
|
|
|
6,056
|
|
|
10,231
|
|
|
54,656
|
|
|
—
|
|
|||||
Capital lease obligations
(3)
|
66
|
|
|
66
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Debt-related obligations, principal
|
$
|
148,206
|
|
|
$
|
25,721
|
|
|
$
|
17,258
|
|
|
$
|
54,656
|
|
|
$
|
50,571
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest on recourse debt
(1)
|
$
|
58,597
|
|
|
$
|
4,203
|
|
|
$
|
12,673
|
|
|
$
|
2,781
|
|
|
$
|
38,940
|
|
Interest on non-recourse debt
(2)
|
30,327
|
|
|
7,796
|
|
|
15,050
|
|
|
7,481
|
|
|
—
|
|
|||||
Interest on capital leases
(3)
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total interest
|
$
|
88,925
|
|
|
$
|
12,000
|
|
|
$
|
27,723
|
|
|
$
|
10,262
|
|
|
$
|
38,940
|
|
Total debt-related obligations
|
$
|
237,131
|
|
|
$
|
37,721
|
|
|
$
|
44,981
|
|
|
$
|
64,918
|
|
|
$
|
89,511
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total non-recourse debt including interest
|
$
|
101,270
|
|
|
$
|
13,852
|
|
|
$
|
25,281
|
|
|
$
|
62,137
|
|
|
$
|
—
|
|
Operating lease obligations
|
$
|
4,931
|
|
|
$
|
1,048
|
|
|
$
|
2,070
|
|
|
$
|
1,813
|
|
|
$
|
—
|
|
(1)
|
Non-recourse debt is generally defined as debt whereby the lenders’ sole recourse, with respect to defaults, is limited to the value of the asset that is collateral for the debt. The Prospect Loan is not guaranteed by us or our other subsidiaries, other than Phase 1 DC and DC Holdings and the KBC Facilities are not guaranteed by us or our other subsidiaries, other than Phase 2 DC.
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets at March 31, 2017 and 2016
|
|
Consolidated Statements of Operations for the fiscal years ended March 31, 2017 and 2016
|
|
Consolidated Statements of Comprehensive Loss for the fiscal years ended March 31, 2017 and 2016
|
|
Consolidated Statements of Deficit for the fiscal years ended March 31, 2017 and 2016
|
|
Consolidated Statements of Cash Flows for the fiscal years ended March 31, 2017 and 2016
|
|
Notes to Consolidated Financial Statements
|
|
March 31,
|
||||||
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
12,566
|
|
|
$
|
25,481
|
|
Accounts receivable, net
|
53,608
|
|
|
52,898
|
|
||
Inventory, net
|
1,137
|
|
|
2,024
|
|
||
Unbilled revenue
|
5,655
|
|
|
5,570
|
|
||
Prepaid and other current assets
|
13,484
|
|
|
15,872
|
|
||
Total current assets
|
86,450
|
|
|
101,845
|
|
||
Restricted cash
|
1,000
|
|
|
8,983
|
|
||
Property and equipment, net
|
33,138
|
|
|
61,740
|
|
||
Intangible assets, net
|
20,227
|
|
|
25,940
|
|
||
Goodwill
|
8,701
|
|
|
8,701
|
|
||
Debt issuance costs, net
|
260
|
|
|
894
|
|
||
Other long-term assets
|
1,558
|
|
|
1,295
|
|
||
Total assets
|
$
|
151,334
|
|
|
$
|
209,398
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
73,679
|
|
|
$
|
68,517
|
|
Current portion of notes payable, non-recourse
|
6,056
|
|
|
29,074
|
|
||
Current portion of notes payable
|
19,599
|
|
|
—
|
|
||
Current portion of capital leases
|
66
|
|
|
341
|
|
||
Current portion of deferred revenue
|
2,461
|
|
|
2,901
|
|
||
Total current liabilities
|
101,861
|
|
|
100,833
|
|
||
Notes payable, non-recourse, net of current portion and unamortized debt issuance costs of $2,701 and $4,577, respectively
|
55,048
|
|
|
83,238
|
|
||
Notes payable, net of current portion and unamortized debt issuance costs of $5,340 and $3,989, respectively
|
59,396
|
|
|
86,938
|
|
||
Capital leases, net of current portion
|
—
|
|
|
3,884
|
|
||
Deferred revenue, net of current portion
|
5,324
|
|
|
7,532
|
|
||
Other long-term liabilities
|
408
|
|
|
—
|
|
||
Total liabilities
|
222,037
|
|
|
282,425
|
|
||
Commitments and contingencies (see Note 7)
|
|
|
|
|
|
||
Stockholders’ Deficit
|
|
|
|
|
|
||
Preferred stock, 15,000,000 shares authorized;
Series A 10% - $0.001 par value per share; 20 shares authorized; 7 shares issued and outstanding at March 31, 2017 and 2016, respectively. Liquidation preference of $3,648 |
3,559
|
|
|
3,559
|
|
||
Common stock, $0.001 par value; Class A and Class B stock; Class A stock 25,000,000 and 21,000,000 shares authorized; 11,841,983 and 7,977,861 shares issued and 11,841,983 and 7,977,861 shares outstanding at March 31, 2017 and 2016, respectively; 1,241,000 Class B stock authorized and issued and zero shares outstanding at March 31, 2017 and 2016, respectively
|
12
|
|
|
9
|
|
||
Additional paid-in capital
|
287,393
|
|
|
269,941
|
|
||
Treasury stock, at cost; 277,244 Class A common shares at March 31, 2016
|
—
|
|
|
(2,839
|
)
|
||
Accumulated deficit
|
(360,415
|
)
|
|
(342,448
|
)
|
||
Accumulated other comprehensive loss
|
(38
|
)
|
|
(64
|
)
|
||
Total stockholders’ deficit of Cinedigm Corp.
|
(69,489
|
)
|
|
(71,842
|
)
|
||
Deficit attributable to noncontrolling interest
|
(1,214
|
)
|
|
(1,185
|
)
|
||
Total deficit
|
(70,703
|
)
|
|
(73,027
|
)
|
||
Total liabilities and deficit
|
$
|
151,334
|
|
|
$
|
209,398
|
|
|
For the Fiscal Year Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Revenues
|
$
|
90,394
|
|
|
$
|
104,449
|
|
Costs and expenses:
|
|
|
|
|
|||
Direct operating (excludes depreciation and amortization shown below)
|
25,121
|
|
|
31,341
|
|
||
Selling, general and administrative
|
23,776
|
|
|
33,367
|
|
||
Provision for doubtful accounts
|
1,213
|
|
|
789
|
|
||
Restructuring expenses
|
87
|
|
|
1,130
|
|
||
Goodwill impairment
|
—
|
|
|
18,000
|
|
||
Litigation recovery, net of expenses
|
—
|
|
|
(2,228
|
)
|
||
Depreciation and amortization of property and equipment
|
27,722
|
|
|
37,344
|
|
||
Amortization of intangible assets
|
5,718
|
|
|
5,852
|
|
||
Total operating expenses
|
83,637
|
|
|
125,595
|
|
||
Income (loss) from operations
|
6,757
|
|
|
(21,146
|
)
|
||
Interest income
|
73
|
|
|
82
|
|
||
Interest expense
|
(19,068
|
)
|
|
(20,642
|
)
|
||
Loss on extinguishment of notes payable
|
(1,063
|
)
|
|
(931
|
)
|
||
Debt conversion expense
|
(4,352
|
)
|
|
—
|
|
||
Gain on termination of capital lease
|
2,535
|
|
|
—
|
|
||
Other income, net
|
31
|
|
|
513
|
|
||
Change in fair value of interest rate derivatives
|
142
|
|
|
(40
|
)
|
||
Loss before income tax expense
|
(14,945
|
)
|
|
(42,164
|
)
|
||
Income tax expense
|
(252
|
)
|
|
(345
|
)
|
||
Net loss
|
(15,197
|
)
|
|
(42,509
|
)
|
||
Net loss attributable to noncontrolling interest
|
68
|
|
|
767
|
|
||
Net loss attributable to controlling interests
|
(15,129
|
)
|
|
(41,742
|
)
|
||
Preferred stock dividends
|
(356
|
)
|
|
(356
|
)
|
||
Net loss attributable to common stockholders
|
$
|
(15,485
|
)
|
|
$
|
(42,098
|
)
|
|
|
|
|
||||
Net loss per Class A and Class B common stock attributable to common stockholders - basic and diluted:
|
|
|
|
||||
Net loss attributable to common stockholders
|
$
|
(1.92
|
)
|
|
$
|
(6.51
|
)
|
Weighted average number of Class A and Class B common stock outstanding: basic and diluted
|
8,049,160
|
|
|
6,467,978
|
|
|
|
For the Fiscal Year Ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Net loss
|
|
$
|
(15,197
|
)
|
|
$
|
(42,509
|
)
|
Other comprehensive income (loss): foreign exchange translation
|
|
26
|
|
|
(7
|
)
|
||
Comprehensive loss
|
|
(15,171
|
)
|
|
(42,516
|
)
|
||
Less: comprehensive loss attributable to noncontrolling interest
|
|
68
|
|
|
767
|
|
||
Comprehensive loss attributable to controlling interests
|
|
$
|
(15,103
|
)
|
|
$
|
(41,749
|
)
|
|
Series A
Preferred Stock
|
|
Class A and Class B
Common Stock
|
|
Treasury
Stock
|
|
Additional
Paid-In
|
|
Accumulated
|
|
Accumulated Other Comprehensive
|
|
Total
Stockholders’
(Deficit)
|
|
Non-controlling
|
|
Total (Deficit)
|
|||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Loss
|
|
Equity
|
|
Interest
|
|
Equity
|
|||||||||||||||||||||
Balances as of March 31, 2015
|
7
|
|
|
3,559
|
|
|
7,717,850
|
|
|
77
|
|
|
(5,144
|
)
|
|
(172
|
)
|
|
277,984
|
|
|
(300,350
|
)
|
|
(57
|
)
|
|
(18,959
|
)
|
|
(178
|
)
|
|
$
|
(19,137
|
)
|
||||||||
Foreign exchange translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|||||||||
Cashless exercise of stock options
|
—
|
|
|
—
|
|
|
65
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Issuance of common stock for professional services of third parties
|
—
|
|
|
—
|
|
|
37,346
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
186
|
|
|
—
|
|
|
—
|
|
|
187
|
|
|
—
|
|
|
187
|
|
|||||||||
Issuance of common stock to Board of Directors
|
—
|
|
|
—
|
|
|
155,059
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
499
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|
—
|
|
|
500
|
|
|||||||||
Unamortized stock based compensation issued to Board of Directors
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
|
—
|
|
|
(141
|
)
|
|||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,021
|
|
|
—
|
|
|
—
|
|
|
1,021
|
|
|
—
|
|
|
1,021
|
|
|||||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
67,541
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
356
|
|
|
(356
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Contribution by noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,166
|
|
|
1,166
|
|
|||||||||
Capital contributions to Cinedigm Corp. by noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,406
|
|
|
—
|
|
|
—
|
|
|
1,406
|
|
|
(1,406
|
)
|
|
—
|
|
|||||||||
Repurchase of Class A common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(272,100
|
)
|
|
(2,667
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,667
|
)
|
|
—
|
|
|
(2,667
|
)
|
|||||||||
Structured stock repurchase transaction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,440
|
)
|
|
—
|
|
|
—
|
|
|
(11,440
|
)
|
|
|
|
(11,440
|
)
|
||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41,742
|
)
|
|
—
|
|
|
(41,742
|
)
|
|
(767
|
)
|
|
(42,509
|
)
|
|||||||||
Balances as of March 31, 2016
|
7
|
|
|
$
|
3,559
|
|
|
7,977,861
|
|
|
$
|
79
|
|
|
(277,244
|
)
|
|
$
|
(2,839
|
)
|
|
$
|
269,871
|
|
|
$
|
(342,448
|
)
|
|
$
|
(64
|
)
|
|
$
|
(71,842
|
)
|
|
$
|
(1,185
|
)
|
|
$
|
(73,027
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A
Preferred Stock
|
|
Class A and Class B
Common Stock
|
|
Treasury
Stock
|
|
Additional
Paid-In
|
|
Accumulated
|
|
Accumulated Other Comprehensive
|
|
Total
Stockholders’
(Deficit)
|
|
Non-controlling
|
|
Total (Deficit)
|
|||||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Loss
|
|
Equity
|
|
Interest
|
|
Equity
|
|||||||||||||||||||||||
Balances as of March 31, 2016
|
7
|
|
|
$
|
3,559
|
|
|
7,977,861
|
|
|
79
|
|
|
(277,244
|
)
|
|
(2,839
|
)
|
|
269,871
|
|
|
(342,448
|
)
|
|
(64
|
)
|
|
(71,842
|
)
|
|
(1,185
|
)
|
|
$
|
(73,027
|
)
|
|||||||||
Adjust par value of common stock for 1-for-10 stock split
|
—
|
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|
—
|
|
|
—
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Adjusted balance as of March 31, 2016
|
7
|
|
|
3,559
|
|
|
7,977,861
|
|
|
9
|
|
|
(277,244
|
)
|
|
(2,839
|
)
|
|
269,941
|
|
|
(342,448
|
)
|
|
(64
|
)
|
|
(71,842
|
)
|
|
(1,185
|
)
|
|
(73,027
|
)
|
|||||||||||
Foreign exchange translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
26
|
|
|
—
|
|
|
26
|
|
|||||||||||
Issuance of common stock for third-party professional services
|
—
|
|
|
—
|
|
|
419,838
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
342
|
|
|
—
|
|
|
—
|
|
|
342
|
|
|
—
|
|
|
342
|
|
|||||||||||
Issuance of shares for CEO retention bonus
|
—
|
|
|
—
|
|
|
125,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250
|
|
|
—
|
|
|
—
|
|
|
250
|
|
|
—
|
|
|
250
|
|
|||||||||||
Amortization of stock based compensation issued to Board of Directors
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
272
|
|
|
—
|
|
|
—
|
|
|
272
|
|
|
—
|
|
|
272
|
|
|||||||||||
Common stock issued in connection with induced conversion of Convertible Notes
|
—
|
|
|
—
|
|
|
1,297,756
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
14,279
|
|
|
—
|
|
|
—
|
|
|
14,280
|
|
|
—
|
|
|
14,280
|
|
|||||||||||
Issuance of restricted stock awards
|
—
|
|
|
—
|
|
|
1,054,865
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Issuance of common stock in connection with Second Secured Lien Notes
|
—
|
|
|
—
|
|
|
751,450
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1,055
|
|
|
—
|
|
|
—
|
|
|
1,056
|
|
|
—
|
|
|
1,056
|
|
|||||||||||
Issuance of warrants in connection with Second Secured Lien Notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
107
|
|
|
—
|
|
|
—
|
|
|
107
|
|
|
—
|
|
|
107
|
|
|||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
804
|
|
|
—
|
|
|
—
|
|
|
804
|
|
|
—
|
|
|
804
|
|
|||||||||||
Extension of terms in connection with Sageview Warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
345
|
|
|
—
|
|
|
—
|
|
|
345
|
|
|
—
|
|
|
345
|
|
|||||||||||
Preferred stock dividends paid with common stock
|
—
|
|
|
—
|
|
|
215,213
|
|
|
|
|
|
—
|
|
|
—
|
|
|
356
|
|
|
(356
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Re-issuance of treasury stock in connection with convertible notes exchange transaction
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
277,244
|
|
|
2,839
|
|
|
(357
|
)
|
|
(2,482
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||||
Contributions by noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
39
|
|
|||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,129
|
)
|
|
—
|
|
|
(15,129
|
)
|
|
(68
|
)
|
|
(15,197
|
)
|
|||||||||||
Balances as of March 31, 2017
|
$
|
7
|
|
|
$
|
3,559
|
|
|
11,841,983
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
287,393
|
|
|
$
|
(360,415
|
)
|
|
$
|
(38
|
)
|
|
$
|
(69,489
|
)
|
|
$
|
(1,214
|
)
|
|
$
|
(70,703
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Fiscal Year Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(15,197
|
)
|
|
$
|
(42,509
|
)
|
Adjustments to reconcile net loss to cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization of property and equipment and amortization of intangible assets
|
33,440
|
|
|
43,196
|
|
||
Goodwill impairment
|
—
|
|
|
18,000
|
|
||
Gain on termination of capital lease
|
(2,535
|
)
|
|
—
|
|
||
Loss on disposal of property and equipment
|
—
|
|
|
89
|
|
||
Amortization of debt issuance costs included in interest expense
|
2,688
|
|
|
2,463
|
|
||
Provision for doubtful accounts
|
1,213
|
|
|
789
|
|
||
Provision for inventory reserve
|
376
|
|
|
900
|
|
||
Stock-based compensation and expenses
|
1,726
|
|
|
1,832
|
|
||
Change in fair value of interest rate derivatives
|
142
|
|
|
40
|
|
||
Accretion and PIK interest expense added to note payable
|
1,034
|
|
|
1,677
|
|
||
Loss on extinguishment of notes payable and debt conversion expense
|
5,415
|
|
|
931
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(2,186
|
)
|
|
5,988
|
|
||
Inventory
|
511
|
|
|
286
|
|
||
Unbilled revenue
|
(85
|
)
|
|
(505
|
)
|
||
Prepaid and other assets
|
1,873
|
|
|
3,653
|
|
||
Accounts payable, accrued expenses and other
|
5,932
|
|
|
(8,901
|
)
|
||
Deferred revenue
|
(2,648
|
)
|
|
(2,425
|
)
|
||
Net cash provided by operating activities
|
31,699
|
|
|
25,504
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(481
|
)
|
|
(1,381
|
)
|
||
Purchases of intangible assets
|
(5
|
)
|
|
(8
|
)
|
||
Net cash used in investing activities
|
(486
|
)
|
|
(1,389
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Payments of notes payable
|
(53,088
|
)
|
|
(59,934
|
)
|
||
Proceeds from notes payable
|
5,525
|
|
|
64,000
|
|
||
Net repayment of from revolving credit facility
|
(2,328
|
)
|
|
(2,367
|
)
|
||
Payment for structured stock repurchase forward contract
|
—
|
|
|
(11,440
|
)
|
||
Repurchase of Class A common stock
|
—
|
|
|
(2,667
|
)
|
||
Principal payments on capital leases
|
(224
|
)
|
|
(501
|
)
|
||
Payments for debt issuance costs
|
(2,035
|
)
|
|
(3,658
|
)
|
||
Contributions from noncontrolling interest
|
39
|
|
|
1,166
|
|
||
Change in restricted cash balances
|
7,983
|
|
|
(2,232
|
)
|
||
Net cash used in financing activities
|
(44,128
|
)
|
|
(17,633
|
)
|
||
Net change in cash and cash equivalents
|
(12,915
|
)
|
|
6,482
|
|
||
Cash and cash equivalents at beginning of year
|
25,481
|
|
|
18,999
|
|
||
Cash and cash equivalents at end of year
|
$
|
12,566
|
|
|
$
|
25,481
|
|
1.
|
NATURE OF OPERATIONS
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Computer equipment and software
|
3 - 5 years
|
Digital cinema projection systems
|
10 years
|
Machinery and equipment
|
3 - 10 years
|
Furniture and fixtures
|
3 - 6 years
|
•
|
Level 1 – quoted prices in active markets for identical investments
|
•
|
Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs)
|
•
|
Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments)
|
|
|
As of March 31, 2017
|
||||||||||||||
(In thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Restricted cash
|
|
$
|
1,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,000
|
|
|
|
As of March 31, 2016
|
||||||||||||||
(In thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Restricted cash
|
|
$
|
8,983
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,983
|
|
Interest rate derivatives
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||
|
|
$
|
8,983
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
8,995
|
|
(In thousands)
|
|
Goodwill
|
||
As of April 1, 2015
|
|
$
|
26,701
|
|
Goodwill impairment
|
|
(18,000
|
)
|
|
As of March 31, 2016 and 2017
|
|
8,701
|
|
|
|
For the Fiscal Year Ended March 31,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Direct operating
|
|
$
|
10
|
|
|
$
|
16
|
|
Selling, general and administrative
|
|
1,716
|
|
|
1,816
|
|
||
Total stock-based compensation expense
|
|
$
|
1,726
|
|
|
$
|
1,832
|
|
|
|
For the Fiscal Year Ended March 31,
|
||||
Assumptions for Option Grants
|
|
2017
|
|
2016
|
||
Range of risk-free interest rates
|
|
1.1% - 1.3%
|
|
|
1.4% - 1.7%
|
|
Dividend yield
|
|
—
|
|
|
—
|
|
Expected life (years)
|
|
5
|
|
|
5
|
|
Range of expected volatilities
|
|
72.5% - 76.3%
|
|
|
70.6 - 72.5%
|
|
Basic and diluted net loss per common share attributable to common shareholders =
|
Net loss attributable to common shareholders
|
Weighted average number of common stock shares
outstanding during the period
|
•
|
will require that all excess tax benefits and tax deficiencies be recorded as income tax expense or benefit in the statement of operations and that the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur;
|
•
|
will require excess tax benefits from share-based payments to be reported as operating activities on the statement of cash flows; and
|
•
|
permits an accounting policy election to either estimate the number of awards that are expected to vest using an estimated forfeiture rate, as currently required, or account for forfeitures when they occur.
|
3.
|
CONSOLIDATED BALANCE SHEET COMPONENTS
|
|
|
As of March 31,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Trade receivables
|
|
$
|
56,298
|
|
|
$
|
54,424
|
|
Allowance for doubtful accounts
|
|
(2,690
|
)
|
|
(1,526
|
)
|
||
Total accounts receivable, net
|
|
$
|
53,608
|
|
|
$
|
52,898
|
|
|
|
As of March 31,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Non-trade accounts receivable, net
|
|
$
|
3,387
|
|
|
$
|
3,805
|
|
Advances
|
|
8,119
|
|
|
9,775
|
|
||
Due from producers
|
|
1,006
|
|
|
1,485
|
|
||
Prepaid insurance
|
|
164
|
|
|
60
|
|
||
Other prepaid expenses
|
|
808
|
|
|
747
|
|
||
Total prepaid and other current assets
|
|
$
|
13,484
|
|
|
$
|
15,872
|
|
|
|
As of March 31,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Leasehold improvements
|
|
$
|
816
|
|
|
$
|
824
|
|
Computer equipment and software
|
|
4,374
|
|
|
9,400
|
|
||
Digital cinema projection systems
|
|
360,651
|
|
|
360,651
|
|
||
Machinery and equipment
|
|
592
|
|
|
592
|
|
||
Furniture and fixtures
|
|
384
|
|
|
382
|
|
||
|
|
366,817
|
|
|
371,849
|
|
||
Less - accumulated depreciation and amortization
|
|
(333,679
|
)
|
|
(310,109
|
)
|
||
Total property and equipment, net
|
|
$
|
33,138
|
|
|
$
|
61,740
|
|
|
|
As of March 31, 2017
|
|||||||||||||
(In thousands)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Amount
|
|
Useful Life (years)
|
|||||||
Trademarks
|
|
$
|
116
|
|
|
$
|
(107
|
)
|
|
$
|
9
|
|
|
3
|
|
Customer relationships and contracts
|
|
21,968
|
|
|
(9,154
|
)
|
|
12,814
|
|
|
3-15
|
|
|||
Theatre relationships
|
|
550
|
|
|
(390
|
)
|
|
160
|
|
|
10-12
|
|
|||
Content library
|
|
19,767
|
|
|
(12,523
|
)
|
|
7,244
|
|
|
5-6
|
|
|||
Favorable lease agreement
|
|
1,193
|
|
|
(1,193
|
)
|
|
—
|
|
|
4
|
|
|||
|
|
$
|
43,594
|
|
|
$
|
(23,367
|
)
|
|
$
|
20,227
|
|
|
|
|
|
|
As of March 31, 2016
|
|||||||||||||
(In thousands)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Amount
|
|
Useful Life (years)
|
|||||||
Trademarks
|
|
$
|
112
|
|
|
$
|
(99
|
)
|
|
$
|
13
|
|
|
3
|
|
Customer relationships and contracts
|
|
21,968
|
|
|
(7,048
|
)
|
|
14,920
|
|
|
3-15
|
|
|||
Theatre relationships
|
|
550
|
|
|
(344
|
)
|
|
206
|
|
|
10-12
|
|
|||
Content library
|
|
19,767
|
|
|
(9,101
|
)
|
|
10,666
|
|
|
5-6
|
|
|||
Favorable lease agreement
|
|
1,193
|
|
|
(1,058
|
)
|
|
135
|
|
|
4
|
|
|||
|
|
$
|
43,590
|
|
|
$
|
(17,650
|
)
|
|
$
|
25,940
|
|
|
|
|
|
|
As of March 31,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Accounts payable
|
|
$
|
33,069
|
|
|
$
|
30,866
|
|
Participations and royalties payable
|
|
32,399
|
|
|
27,463
|
|
||
Accrued compensation and benefits
|
|
1,059
|
|
|
2,580
|
|
||
Accrued taxes payable
|
|
619
|
|
|
347
|
|
||
Interest payable
|
|
1,357
|
|
|
1,737
|
|
||
Accrued restructuring and transition expenses
|
|
44
|
|
|
505
|
|
||
Accrued other expenses
|
|
5,132
|
|
|
5,019
|
|
||
Total accounts payable and accrued expenses
|
|
$
|
73,679
|
|
|
$
|
68,517
|
|
5.
|
NOTES PAYABLE
|
|
|
As of March 31, 2017
|
|
As of March 31, 2016
|
||||||||||||
(In thousands)
|
|
Current Portion
|
|
Long Term Portion
|
|
Current Portion
|
|
Long Term Portion
|
||||||||
2013 Term Loans
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,188
|
|
|
$
|
9,857
|
|
Prospect Loan
|
|
—
|
|
|
54,656
|
|
|
—
|
|
|
66,543
|
|
||||
KBC Facilities
|
|
5,744
|
|
|
2,890
|
|
|
7,646
|
|
|
10,998
|
|
||||
P2 Vendor Note
|
|
227
|
|
|
181
|
|
|
161
|
|
|
310
|
|
||||
P2 Exhibitor Notes
|
|
85
|
|
|
22
|
|
|
79
|
|
|
107
|
|
||||
Total non-recourse notes payable
|
|
6,056
|
|
|
57,749
|
|
|
29,074
|
|
|
87,815
|
|
||||
Less: Unamortized debt issuance costs and debt discounts
|
|
—
|
|
|
(2,701
|
)
|
|
—
|
|
|
(4,577
|
)
|
||||
Total non-recourse notes payable, net of unamortized debt issuance costs and debt discounts
|
|
$
|
6,056
|
|
|
$
|
55,048
|
|
|
$
|
29,074
|
|
|
$
|
83,238
|
|
|
|
|
|
|
|
|
|
|
||||||||
5.5% Convertible Notes Due 2035
|
|
$
|
—
|
|
|
$
|
50,571
|
|
|
$
|
—
|
|
|
$
|
64,000
|
|
Second Secured Lien Notes
|
|
—
|
|
|
9,165
|
|
|
—
|
|
|
—
|
|
||||
Cinedigm Revolving Loans
|
|
19,599
|
|
|
—
|
|
|
—
|
|
|
21,927
|
|
||||
2013 Notes
|
|
—
|
|
|
5,000
|
|
|
—
|
|
|
5,000
|
|
||||
Total recourse notes payable
|
|
$
|
19,599
|
|
|
$
|
64,736
|
|
|
$
|
—
|
|
|
$
|
90,927
|
|
Less: Unamortized debt issuance costs and debt discounts
|
|
—
|
|
|
(5,340
|
)
|
|
—
|
|
|
(3,989
|
)
|
||||
Total recourse notes payable, net of unamortized debt issuance costs and debt discounts
|
|
$
|
19,599
|
|
|
$
|
59,396
|
|
|
$
|
—
|
|
|
$
|
86,938
|
|
Total notes payable, net of unamortized debt issuance costs
|
|
$
|
25,655
|
|
|
$
|
114,444
|
|
|
$
|
29,074
|
|
|
$
|
170,176
|
|
|
|
As of March 31,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
2013 Term Loans, at issuance, net
|
|
$
|
125,087
|
|
|
$
|
125,087
|
|
Payments to date
|
|
(125,087
|
)
|
|
(94,043
|
)
|
||
Discount on 2013 Term Loans
|
|
—
|
|
|
(118
|
)
|
||
2013 Term Loans, net
|
|
—
|
|
|
30,926
|
|
||
Less current portion
|
|
—
|
|
|
(21,188
|
)
|
||
Total long term portion
|
|
$
|
—
|
|
|
$
|
9,738
|
|
•
|
5.0%
of the principal amount prepaid between the
second
and
third
anniversaries of issuance;
|
•
|
4.0%
of the principal amount prepaid between the
third
and
fourth
anniversaries of issuance;
|
•
|
3.0%
of the principal amount prepaid between the
fourth
and
fifth
anniversaries of issuance;
|
•
|
2.0%
of the principal amount prepaid between the
fifth
and
sixth
anniversary of issuance;
|
•
|
1.0%
of the principal amount prepaid between the
sixth
and
seventh
anniversaries of issuance; and
|
•
|
No penalty if the balance of the Prospect Loan, including accrued interest, is prepaid thereafter.
|
|
|
As of March 31,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Prospect Loan, at issuance
|
|
$
|
70,000
|
|
|
$
|
70,000
|
|
PIK Interest
|
|
4,778
|
|
|
4,778
|
|
||
Payments to date
|
|
(20,122
|
)
|
|
(8,235
|
)
|
||
Prospect Loan, net
|
|
$
|
54,656
|
|
|
$
|
66,543
|
|
Less current portion
|
|
—
|
|
|
—
|
|
||
Total long term portion
|
|
$
|
54,656
|
|
|
$
|
66,543
|
|
|
|
|
|
|
|
|
|
Outstanding Principal Balance
|
||||||||||
Facility
1
|
|
Credit Facility
|
|
Interest Rate
2
|
|
Maturity Date
|
|
March 31, 2017
|
|
March 31, 2016
|
||||||||
1
|
|
|
22,336
|
|
|
3.75
|
%
|
|
September 2018
|
|
3,758
|
|
|
7,180
|
|
|||
2
|
|
|
13,312
|
|
|
3.75
|
%
|
|
September 2018
|
|
—
|
|
|
4,034
|
|
|||
3
|
|
|
11,425
|
|
|
3.75
|
%
|
|
March 2019
|
|
3,264
|
|
|
4,896
|
|
|||
4
|
|
|
6,450
|
|
|
3.75
|
%
|
|
December 2018
|
|
1,612
|
|
|
2,534
|
|
|||
|
|
$
|
53,523
|
|
|
|
|
|
|
$
|
8,634
|
|
|
$
|
18,644
|
|
1.
|
For each facility, principal is to be repaid in
twenty-eight
quarterly installments.
|
2.
|
Each of the facilities bears interest at the three-month LIBOR rate, which was
0.63%
at
March 31, 2017
, plus the interest rate noted above.
|
6.
|
STOCKHOLDERS’ DEFICIT
|
|
Shares Under Option
|
|
Weighted Average Exercise Price
Per Share
|
|||
Balance at March 31, 2015
|
590,868
|
|
|
$
|
17.40
|
|
Granted
|
18,500
|
|
|
7.94
|
|
|
Exercised
|
(2,500
|
)
|
|
15.10
|
|
|
Canceled
|
(244,596
|
)
|
|
17.59
|
|
|
Balance at March 31, 2016
|
362,272
|
|
|
16.50
|
|
|
Granted
|
—
|
|
|
—
|
|
|
Exercised
|
—
|
|
|
—
|
|
|
Canceled
|
(16,657
|
)
|
|
22.08
|
|
|
Balance at March 31, 2017
|
345,615
|
|
|
16.50
|
|
Range of Prices
|
|
Options Outstanding
|
|
Weighted
Average
Remaining
Life in Years
|
|
Weighted
Average
Exercise
Price
|
|
Aggregate Intrinsic Value (In thousands)
|
|||||
$5.40 - $8.90
|
|
11,000
|
|
|
8.4
|
|
$
|
6.66
|
|
|
$
|
—
|
|
$9.00 - $13.70
|
|
25,999
|
|
|
4.8
|
|
11.89
|
|
|
—
|
|
||
$14.00 - $24.40
|
|
272,466
|
|
|
6.1
|
|
14.79
|
|
|
—
|
|
||
$24.60 - $50.00
|
|
32,500
|
|
|
6.6
|
|
27.38
|
|
|
—
|
|
||
$51.60 - $80.60
|
|
3,650
|
|
|
0.4
|
|
65.36
|
|
|
—
|
|
||
|
|
345,615
|
|
|
|
|
|
|
$
|
—
|
|
Options
Exercisable
|
|
Weighted
Average
Remaining
Life in Years
|
|
Weighted
Average
Exercise
Price
|
|
Aggregate Intrinsic Value (In thousands)
|
|||||
292,896
|
|
|
5.80
|
|
$
|
15.95
|
|
|
$
|
—
|
|
Recipient
|
|
Amount outstanding
|
|
Expiration
|
|
Exercise price per share
|
|
Strategic management service provider
|
|
52,500
|
|
|
July 2021
|
|
$17.20 - $30.00
|
Warrants issued to creditors in connection with the 2013 Notes (the "2013 Warrants")
|
|
125,063
|
|
|
October 2018
|
|
$18.50
|
Warrants issued to Ronald L. Chez in connection with the Second Secured Lien Notes
|
|
200,000
|
|
|
July 2023
|
|
$1.34 - $1.68
|
Warrants issued in connection with Convertible Notes exchange transaction
|
|
200,000
|
|
|
December 2021
|
|
$1.60
|
7.
|
COMMITMENTS AND CONTINGENCIES
|
8.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
|
For the Fiscal Year Ended March 31,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Cash interest paid
|
|
$
|
16,464
|
|
|
$
|
15,045
|
|
Income taxes paid
|
|
$
|
322
|
|
|
$
|
—
|
|
Accrued dividends on preferred stock
|
|
$
|
89
|
|
|
$
|
89
|
|
Issuance of Class A Common Stock for payment of preferred stock dividends
|
|
$
|
356
|
|
|
$
|
356
|
|
Issuance of Class A common stock and warrants to purchase Class A common stock in connection with Second Secured Lien Notes
|
|
$
|
1,163
|
|
|
$
|
—
|
|
Issuance of Class A common stock and warrants to purchase Class A common stock in exchange for Convertible Notes
|
|
$
|
14,279
|
|
|
$
|
—
|
|
Issuance of Second Lien Loans in connection with Convertible Notes exchange transaction
|
|
$
|
3,500
|
|
|
$
|
—
|
|
9.
|
SEGMENT INFORMATION
|
Operations of:
|
Products and services provided:
|
Phase I Deployment
|
Financing vehicles and administrators for 3,724 Systems installed nationwide in Phase 1 DC's deployment to theatrical exhibitors. We retain ownership of the Systems and the residual cash flows related to the Systems after the repayment of all non-recourse debt at the expiration of exhibitor, master license agreements. As of March 31, 2017, we are no longer earning VPF revenues from certain major studios on 2,467 of such systems.
|
Phase II Deployment
|
Financing vehicles and administrators for our 8,904 Systems installed domestically and internationally, for which we retain no ownership of the residual cash flows and digital cinema equipment after the completion of cost recoupment and at the expiration of the exhibitor master license agreements.
|
Services
|
Provides monitoring, collection, verification and other management services to our Phase I Deployment, Phase II Deployment, CDF2 Holdings, as well as to exhibitors who purchase their own equipment. Services also collects and disburses VPFs from motion picture studios, distributors and ACFs from alternative content providers, movie exhibitors and theatrical exhibitors.
|
Content & Entertainment
|
Leading distributor of independent content, and collaborates with producers and other content owners to market, source, curate and distribute independent content to targeted and profitable audiences in theatres and homes, and via mobile and emerging platforms.
|
|
|
As of March 31, 2017
|
||||||||||||||||||||||
(In thousands)
|
|
Intangible Assets, net
|
|
Goodwill
|
|
Total Assets
|
|
Notes Payable, Non-Recourse
|
|
Notes Payable
|
|
Capital Leases
|
||||||||||||
Phase I Deployment
|
|
$
|
160
|
|
|
$
|
—
|
|
|
$
|
15,118
|
|
|
$
|
51,955
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Phase II Deployment
|
|
—
|
|
|
—
|
|
|
48,461
|
|
|
9,149
|
|
|
—
|
|
|
—
|
|
||||||
Services
|
|
—
|
|
|
—
|
|
|
1,052
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Content & Entertainment
|
|
20,057
|
|
|
8,701
|
|
|
79,911
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||||
Corporate
|
|
10
|
|
|
—
|
|
|
6,792
|
|
|
—
|
|
|
78,995
|
|
|
58
|
|
||||||
Total
|
|
$
|
20,227
|
|
|
$
|
8,701
|
|
|
$
|
151,334
|
|
|
$
|
61,104
|
|
|
$
|
78,995
|
|
|
$
|
66
|
|
|
|
As of March 31, 2016
|
||||||||||||||||||||||
(In thousands)
|
|
Intangible Assets, net
|
|
Goodwill
|
|
Total Assets
|
|
Notes Payable, Non-Recourse
|
|
Notes Payable
|
|
Capital Leases
|
||||||||||||
Phase I Deployment
|
|
$
|
206
|
|
|
$
|
—
|
|
|
$
|
48,292
|
|
|
$
|
93,372
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Phase II Deployment
|
|
—
|
|
|
—
|
|
|
53,727
|
|
|
18,940
|
|
|
—
|
|
|
—
|
|
||||||
Services
|
|
—
|
|
|
—
|
|
|
1,064
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Content & Entertainment
|
|
25,721
|
|
|
8,701
|
|
|
87,344
|
|
|
—
|
|
|
—
|
|
|
30
|
|
||||||
Corporate
|
|
13
|
|
|
—
|
|
|
18,971
|
|
|
—
|
|
|
86,938
|
|
|
4,195
|
|
||||||
Total
|
|
$
|
25,940
|
|
|
$
|
8,701
|
|
|
$
|
209,398
|
|
|
$
|
112,312
|
|
|
$
|
86,938
|
|
|
$
|
4,225
|
|
|
|
Statements of Operations
|
||||||||||||||||||||||
|
|
For the Fiscal Year Ended March 31, 2017
|
||||||||||||||||||||||
|
|
Phase I
|
|
Phase II
|
|
Services
|
|
Content & Entertainment
|
|
Corporate
|
|
Consolidated
|
||||||||||||
Revenues
|
|
$
|
32,068
|
|
|
$
|
12,538
|
|
|
$
|
11,611
|
|
|
$
|
34,177
|
|
|
$
|
—
|
|
|
$
|
90,394
|
|
Direct operating (exclusive of depreciation and amortization shown below)
|
|
1,052
|
|
|
388
|
|
|
10
|
|
|
23,671
|
|
|
—
|
|
|
25,121
|
|
||||||
Selling, general and administrative
|
|
544
|
|
|
228
|
|
|
798
|
|
|
15,812
|
|
|
6,394
|
|
|
23,776
|
|
||||||
Allocation of corporate overhead
|
|
—
|
|
|
—
|
|
|
1,581
|
|
|
3,583
|
|
|
(5,164
|
)
|
|
—
|
|
||||||
Provision for doubtful accounts
|
|
737
|
|
|
209
|
|
|
—
|
|
|
267
|
|
|
—
|
|
|
1,213
|
|
||||||
Restructuring expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
509
|
|
|
(422
|
)
|
|
87
|
|
||||||
Depreciation and amortization of property and equipment
|
|
19,263
|
|
|
7,523
|
|
|
—
|
|
|
273
|
|
|
663
|
|
|
27,722
|
|
||||||
Amortization of intangible assets
|
|
46
|
|
|
—
|
|
|
—
|
|
|
5,663
|
|
|
9
|
|
|
5,718
|
|
||||||
Total operating expenses
|
|
21,642
|
|
|
8,348
|
|
|
2,389
|
|
|
49,778
|
|
|
1,480
|
|
|
83,637
|
|
||||||
Income (loss) from operations
|
|
$
|
10,426
|
|
|
$
|
4,190
|
|
|
$
|
9,222
|
|
|
$
|
(15,601
|
)
|
|
$
|
(1,480
|
)
|
|
$
|
6,757
|
|
|
|
Phase I
|
|
Phase II
|
|
Services
|
|
Content & Entertainment
|
|
Corporate
|
|
Consolidated
|
||||||||||||
Direct operating
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10
|
|
Selling, general and administrative
|
|
—
|
|
|
—
|
|
|
4
|
|
|
289
|
|
|
1,423
|
|
|
1,716
|
|
||||||
Total stock-based compensation
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
289
|
|
|
$
|
1,423
|
|
|
$
|
1,726
|
|
|
|
Statements of Operations
|
||||||||||||||||||||||
|
|
For the Fiscal Year Ended March 31, 2016
|
||||||||||||||||||||||
|
|
Phase I
|
|
Phase II
|
|
Services
|
|
Content & Entertainment
|
|
Corporate
|
|
Consolidated
|
||||||||||||
Revenues
|
|
$
|
36,488
|
|
|
$
|
12,257
|
|
|
$
|
11,782
|
|
|
$
|
43,922
|
|
|
$
|
—
|
|
|
$
|
104,449
|
|
Direct operating (exclusive of depreciation and amortization shown below)
|
|
1,108
|
|
|
315
|
|
|
10
|
|
|
29,908
|
|
|
—
|
|
|
31,341
|
|
||||||
Selling, general and administrative
|
|
661
|
|
|
121
|
|
|
914
|
|
|
20,659
|
|
|
11,012
|
|
|
33,367
|
|
||||||
Allocation of corporate overhead
|
|
—
|
|
|
—
|
|
|
1,616
|
|
|
5,410
|
|
|
(7,026
|
)
|
|
—
|
|
||||||
(Benefit) provision for doubtful accounts
|
|
241
|
|
|
98
|
|
|
—
|
|
|
450
|
|
|
—
|
|
|
789
|
|
||||||
Restructuring expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
216
|
|
|
914
|
|
|
1,130
|
|
||||||
Goodwill impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,000
|
|
|
—
|
|
|
18,000
|
|
||||||
Litigation settlement recovery, net of expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,228
|
)
|
|
—
|
|
|
(2,228
|
)
|
||||||
Depreciation and amortization of property and equipment
|
|
28,446
|
|
|
7,523
|
|
|
—
|
|
|
330
|
|
|
1,045
|
|
|
37,344
|
|
||||||
Amortization of intangible assets
|
|
46
|
|
|
—
|
|
|
—
|
|
|
5,799
|
|
|
7
|
|
|
5,852
|
|
||||||
Total operating expenses
|
|
30,502
|
|
|
8,057
|
|
|
2,540
|
|
|
78,544
|
|
|
5,952
|
|
|
125,595
|
|
||||||
Income (loss) from operations
|
|
$
|
5,986
|
|
|
$
|
4,200
|
|
|
$
|
9,242
|
|
|
$
|
(34,622
|
)
|
|
$
|
(5,952
|
)
|
|
$
|
(21,146
|
)
|
|
|
Phase I
|
|
Phase II
|
|
Services
|
|
Content & Entertainment
|
|
Corporate
|
|
Consolidated
|
||||||||||||
Direct operating
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
16
|
|
Selling, general and administrative
|
|
—
|
|
|
—
|
|
|
1
|
|
|
258
|
|
|
1,557
|
|
|
1,816
|
|
||||||
Total stock-based compensation
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
264
|
|
|
$
|
1,557
|
|
|
$
|
1,832
|
|
|
|
Statements of Operations
|
||||||||||||||||||||||
|
|
For the Three Months Ended March 31, 2017
|
||||||||||||||||||||||
|
|
(Unaudited)
|
||||||||||||||||||||||
|
|
Phase I
|
|
Phase II
|
|
Services
|
|
Content & Entertainment
|
|
Corporate
|
|
Consolidated
|
||||||||||||
Revenues
|
|
$
|
6,046
|
|
|
$
|
3,090
|
|
|
$
|
2,569
|
|
|
$
|
7,889
|
|
|
$
|
—
|
|
|
$
|
19,594
|
|
Direct operating (exclusive of depreciation and amortization shown below)
|
|
282
|
|
|
118
|
|
|
4
|
|
|
6,837
|
|
|
—
|
|
|
7,241
|
|
||||||
Selling, general and administrative
|
|
137
|
|
|
84
|
|
|
269
|
|
|
4,326
|
|
|
1,194
|
|
|
6,010
|
|
||||||
Allocation of corporate overhead
|
|
—
|
|
|
—
|
|
|
387
|
|
|
877
|
|
|
(1,264
|
)
|
|
—
|
|
||||||
Provision for doubtful accounts
|
|
419
|
|
|
111
|
|
|
—
|
|
|
267
|
|
|
—
|
|
|
797
|
|
||||||
Restructuring expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
422
|
|
|
(467
|
)
|
|
(45
|
)
|
||||||
Goodwill impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Depreciation and amortization of property and equipment
|
|
3,107
|
|
|
1,881
|
|
|
—
|
|
|
69
|
|
|
107
|
|
|
5,164
|
|
||||||
Amortization of intangible assets
|
|
12
|
|
|
—
|
|
|
—
|
|
|
1,381
|
|
|
3
|
|
|
1,396
|
|
||||||
Total operating expenses
|
|
3,957
|
|
|
2,194
|
|
|
660
|
|
|
14,179
|
|
|
(427
|
)
|
|
20,563
|
|
||||||
Income (loss) from operations
|
|
$
|
2,089
|
|
|
$
|
896
|
|
|
$
|
1,909
|
|
|
$
|
(6,290
|
)
|
|
$
|
427
|
|
|
$
|
(969
|
)
|
|
|
Phase I
|
|
Phase II
|
|
Services
|
|
Content & Entertainment
|
|
Corporate
|
|
Consolidated
|
||||||||||||
Direct operating
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
2
|
|
Selling, general and administrative
|
|
—
|
|
|
—
|
|
|
1
|
|
|
108
|
|
|
251
|
|
|
360
|
|
||||||
Total stock-based compensation
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
106
|
|
|
$
|
251
|
|
|
$
|
362
|
|
(In thousands)
|
|
|
||
Amount accrued as of March 31, 2015
|
|
$
|
—
|
|
Costs incurred
|
|
1,130
|
|
|
Amounts paid/adjustments
|
|
(625
|
)
|
|
Amount accrued as of March 31, 2016
|
|
505
|
|
|
Costs incurred
|
|
87
|
|
|
Amounts paid/adjustments
|
|
(548
|
)
|
|
Amount accrued as of March 31, 2017
|
|
$
|
44
|
|
11.
|
INCOME TAXES
|
|
|
For the Fiscal Year Ended March 31,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Federal:
|
|
|
|
|
||||
Current
|
|
$
|
(140
|
)
|
|
$
|
140
|
|
Deferred
|
|
—
|
|
|
—
|
|
||
Total federal
|
|
(140
|
)
|
|
140
|
|
||
State:
|
|
|
|
|
||||
Current
|
|
392
|
|
|
205
|
|
||
Deferred
|
|
—
|
|
|
—
|
|
||
Total state
|
|
392
|
|
|
205
|
|
||
Income tax expense
|
|
$
|
252
|
|
|
$
|
345
|
|
|
|
As of March 31,
|
||||||
(In thousands)
|
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Net operating loss carryforwards
|
|
$
|
98,232
|
|
|
$
|
99,524
|
|
Stock based compensation
|
|
2,742
|
|
|
4,432
|
|
||
Intangibles
|
|
8,100
|
|
|
8,005
|
|
||
Revenue deferral
|
|
47
|
|
|
46
|
|
||
Interest rate derivatives
|
|
253
|
|
|
199
|
|
||
Capital loss carryforwards
|
|
4,454
|
|
|
7,951
|
|
||
Other
|
|
2,997
|
|
|
2,224
|
|
||
Total deferred tax assets before valuation allowance
|
|
116,825
|
|
|
122,381
|
|
||
Less: Valuation allowance
|
|
(106,718
|
)
|
|
(104,285
|
)
|
||
Total deferred tax assets after valuation allowance
|
|
$
|
10,107
|
|
|
$
|
18,096
|
|
Deferred tax liabilities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
$
|
(10,107
|
)
|
|
$
|
(17,414
|
)
|
Intangibles
|
|
—
|
|
|
(682
|
)
|
||
Total deferred tax liabilities
|
|
(10,107
|
)
|
|
(18,096
|
)
|
||
Net deferred tax
|
|
$
|
—
|
|
|
$
|
—
|
|
|
For the fiscal years ended March 31,
|
||||
|
2017
|
|
2016
|
||
Provision at the U.S. statutory federal tax rate
|
34.0
|
%
|
|
34.0
|
%
|
State income taxes, net of federal benefit
|
6.6
|
%
|
|
5.6
|
%
|
Change in valuation allowance
|
(19.2
|
)%
|
|
(40.3
|
)%
|
Non-deductible equity compensation
|
(1.8
|
)%
|
|
(0.7
|
)%
|
Expired capital loss carry forward
|
(20.8
|
)%
|
|
—
|
%
|
Other
|
(0.5
|
)%
|
|
0.5
|
%
|
Income tax expense
|
(1.7
|
)%
|
|
(0.9
|
)%
|
12.
|
SUBSEQUENT EVENTS
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
•
|
Inadequate internal control over financial reporting due to lack of sufficient accounting personnel and resources to adequately and timely prepare and complete the year-end financial reporting processes and disclosure.
|
•
|
Hired a controller in one of the Company’s segments, experienced in the related industry, to oversee the accounting operations and review of account reconciliations in a timely manner;
|
•
|
Use consultants experienced in SEC financial reporting and accounting technical matters to assist on documentation of accounting issues, preparation and review of SEC filings and review of appropriateness of financial statement disclosures;
|
•
|
We have hired additional accounting staff with the appropriate skill, knowledge and experience in the financial reporting function; and
|
•
|
We have implemented additional review and approvals on journal entries and posting of transactions in a timely manner and have ensured account reconciliations are performed and reviewed for each reporting period in a timely manner
|
ITEM 9B.
|
OTHER INFORMATION
|
|
|
Name
|
Title
|
Christopher J. McGurk
|
Chairman and Chief Executive Officer
|
Jeffrey S. Edell
|
Chief Financial Officer
|
William Sondheim
|
President, Cinedigm Entertainment Corp.
|
|
|
Compensation Program Overview
|
Section I
|
Compensation Philosophy and Objectives
|
Section II
|
Pay Mix
|
Section III
|
Competitive Positioning
|
Section IV
|
Elements of Compensation
|
Section V
|
Additional Compensation Practices and Policies
|
Section VI
|
I.
|
Compensation Program Overview
|
II.
|
Compensation Philosophy and Objectives
|
·
|
Provide competitive compensation levels to enable the recruitment and retention of highly qualified executives.
|
·
|
Design incentive programs that strengthen the link between pay and corporate and business unit performance encouraging and rewarding excellence and contributions to support Cinedigm’s success.
|
·
|
Align the interests of executives with those of shareholders through grants of equity-based compensation that also provide opportunities for ongoing executive share ownership.
|
III.
|
Pay Mix
|
IV.
|
Competitive Positioning
|
Avid Technology
|
Harmonic Inc.
|
RealD
|
Demand Media Inc.
|
IMAX Corp.
|
Rentrack Corp.
|
Dial Global
|
Limelight Networks Inc.
|
Rovi Corp.
|
Digimarc Corp.
|
Lions Gate Entertainment
|
Seachange International
|
Digital River
|
National CineMedia
|
|
Dts Inc.
|
Netflix Inc.
|
|
V.
|
Elements of Compensation
|
•
|
base salary;
|
•
|
annual incentive awards; and
|
•
|
long-term incentive equity grants.
|
VI.
|
Additional Compensation Policies and Practices
|
Name and Principal Position(s)
|
Year
|
Salary ($)
|
Bonus ($)
|
Stock Awards ($)
|
Option Awards ($)(1)
|
Nonequity Incentive Plan Compensation ($)(2)
|
All Other Compensation ($)(3)
|
Total ($)
|
|||||||
Christopher J. McGurk
|
2017
|
600,000
|
|
—
|
|
543,000
|
|
__
|
|
__
|
|
39,061
|
|
1,182,061
|
|
Chief Executive Officer and Chairman
|
2016
|
600,000
|
|
250,000
|
|
__
|
|
__
|
|
__
|
|
27,288
|
|
877,288
|
|
2015
|
600,000
|
|
250,000
|
|
__
|
|
1,253,322
|
|
—
|
|
31,009
|
|
2,134,331
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Jeffrey S. Edell
|
2017
|
344,445
|
|
—
|
|
181,000
|
|
—
|
|
—
|
|
28,279
|
|
553,724
|
|
Chief Financial Officer
|
2016
|
307,917
|
|
63,769
|
|
—
|
|
49,725
|
|
—
|
|
2,001
|
|
423,412
|
|
2015
|
231,106
|
|
—
|
|
—
|
|
380,878
|
|
—
|
|
575
|
|
612,559
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
William Sondheim
|
2017
|
418,013
|
|
—
|
|
181,000
|
|
—
|
|
—
|
|
34,531
|
|
633,544
|
|
President, Cinedigm Entertainment Corp.
|
2016
|
413,569
|
|
—
|
|
—
|
|
—
|
|
—
|
|
13,677
|
|
427,246
|
|
2015
|
412,380
|
|
—
|
|
—
|
|
—
|
|
—
|
|
26,442
|
|
438,822
|
|
(1)
|
The amounts in this column reflect the grant date fair value for all fiscal years presented in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in footnote 2 to the Company’s audited financial statements for the fiscal year ended March 31, 2017 and 2016, included in this Annual Report on Form 10-K (the “Form 10-K”).
|
(2)
|
The amounts in this column reflect amounts earned under annual incentive awards. See below for a description of the material terms of the annual incentive plan for each Named Executive.
|
(3)
|
Includes life and disability insurance premiums paid by the Company and certain medical expenses paid by the Company for each Named Executive, for the fiscal year ended March 31, 2017: for Mr. McGurk $1,618 and $31,536, for Mr. Edell $1,619 and $20,131, and for Mr. Sondheim $1,446 and $26,026; for the fiscal year ended March 31, 2016: for Mr. McGurk $827 and $26,461, for Mr. Edell $791 and $1,210 and for Mr. Sondheim $827 and $12,850; for the fiscal year ended March 31, 2015: for Mr. McGurk, $718, $30,291, for Mr. Edell $575 and $0; for Mr. Sondheim $718 and $25,724.
|
Plan
|
Number of shares of common stock issuable upon exercise of outstanding options (1)
|
Weighted average of exercise price of outstanding options
|
Number of shares of common stock remaining available for future issuance
|
||||
Cinedigm Second Amended and Restated 2000 Equity Incentive Plan (“the Plan”) approved by shareholders
|
345,615
|
|
16.50
|
|
128,270
|
|
|
Cinedigm compensation plans not approved by shareholders (2)
|
492,500
|
|
$
|
26.38
|
|
—
|
|
(1)
|
Shares of Cinedigm Class A Common Stock.
|
(2)
|
Reflects stock options which were not granted under the Plan
.
|
OPTION AWARDS (1)
|
|
STOCK AWARDS
|
||||||||||||
Name
|
Number of Securities
Underlying Unexercised
Options Exercisable (#)
|
|
Number of
Securities
Underlying Unexercised
Options
Unexercisable
(#)
|
|
Option Exercise Price
($)
|
Option
Expiration
Date
|
|
Number of Shares or Units of Stock That Have Not Vested
(#)
|
|
Market Value of Shares or Units of Stock That Have Not Vested
($)
|
||||
Christopher J.
|
150,000
|
|
(2)
|
—
|
|
|
15.00
|
12/23/2020
|
|
300,000
|
|
|
465,000
|
|
McGurk
|
250,000
|
|
(2)
|
—
|
|
|
30.00
|
12/23/2020
|
|
—
|
|
|
—
|
|
|
50,000
|
|
(2)
|
—
|
|
|
50.00
|
12/23/2020
|
|
—
|
|
|
—
|
|
|
150,000
|
|
(3)
|
—
|
|
(3)
|
14.00
|
8/22/2023
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Jeffrey S.
|
18,750
|
|
(4)
|
6,250
|
|
(4)
|
26.60
|
6/9/2024
|
|
100,000
|
|
|
155,000
|
|
Edell
|
5,000
|
|
(5)
|
5,000
|
|
(5)
|
8.75
|
6/4/2025
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
William S. Sondheim
|
18,750
|
|
(6)
|
6,250
|
|
(6)
|
17.50
|
10/21/2023
|
|
100,000
|
|
|
155,000
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Reflects stock options granted under the Company’s Second Amended and Restated 2000 Equity Incentive Plan, except certain options granted to Mr. McGurk and Mr. Sondheim.
|
(2)
|
Reflects stock options not granted under the Plan. Of such options, 1/3 in each tranche vested on December 23 of each of 2011, 2012 and 2013.
|
(3)
|
Of such total options, 1/3 vest on March 31 of each 2015, 2016 and 2017.
|
(4)
|
Of such total options, 1/4 vest on June 9 of each 2015, 2016, 2017 and 2018.
|
(5)
|
Of such total options, 1/4 vest on June 4 of each 2016, 2017, 2018 and 2019.
|
(6)
|
Reflects stock options not granted under the Plan. Of such total options, 1/4 vest on October 21 of each of 2014, 2015, 2016 and 2017.
|
Name
|
Cash Fees Earned
($)
|
Stock Awards ($)
|
Total
($)
|
||||
Peter C. Brown
|
50,000
|
|
50,000
|
|
100,000
|
|
|
Ronald L. Chez (1)
|
10,598
|
|
54,076
|
|
64,674
|
|
|
Patrick W. O’Brien
|
55,544
|
|
57,957
|
|
113,501
|
|
|
Martin B. O’Connor (2)
|
25,000
|
|
12,500
|
|
37,500
|
|
|
Zvi M. Rhine
|
50,000
|
|
50,000
|
|
100,000
|
|
|
Blair M. Westlake (2)
|
12,500
|
|
12,500
|
|
25,000
|
|
|
CLASS A COMMON STOCK
|
|||||
Name (a)
|
Shares Beneficially Owned (b)
|
||||
Number
|
|
|
Percent
|
||
Christopher J. McGurk
|
1,110,740
|
|
|
(c)
|
8.6%
|
Jeffrey S. Edell
|
123,750
|
|
|
(d)
|
1.0%
|
William S. Sondheim
|
118,750
|
|
|
(e)
|
1.0%
|
Peter C. Brown
|
118,528
|
|
|
(f)
|
1.0%
|
Patrick W. O’Brien
|
57,749
|
|
|
|
*
|
Zvi M. Rhine
|
258,025
|
|
|
(g)
|
2.1%
|
Peak6 Capital Management LLC
141 W. Jackson Blvd, Suite 500
Chicago, IL 60604
|
1,649,144
|
|
|
(h)(m)
|
11.7%
|
Highbridge Capital Management, LLC
40 West 57
th
Street, 33
rd
Floor
New York, NY 10019
|
803,254
|
|
|
(i)(m)
|
8.4%
|
Zazove Associates, LLC
1001 Tahoe Blvd.
Incline Village, NV 89451
|
1,383,797
|
|
|
(j)(m)
|
6.2%
|
Ronald L. Chez
291 E. Lake Shore Drive
Chicago, IL 60611
|
1,480,671
|
|
|
(k)
|
11.7%
|
|
|
|
|
|
|
All directors and executive officers as a group
(9 persons) |
1,980,355
|
|
|
(l)
|
15.1%
|
*
|
Less than 1%
|
(a)
|
Unless otherwise indicated, the business address of each person named in the table is c/o Cinedigm Corp., 902 Broadway, 9
th
Floor, New York, New York 10010.
|
|
|
(b)
|
Applicable percentage of ownership is based on 12,386,353 shares of Class A Common Stock outstanding as of June 12, 2017 together with all applicable options, warrants and other securities convertible into shares of our Class A Common Stock for such stockholder. Beneficial ownership is determined in accordance with the rules of the SEC, and includes voting and investment power with respect to shares. Shares of Class A Common Stock subject to options, warrants or other convertible securities exercisable within 60 days after June 12, 2017 are deemed outstanding for computing the percentage ownership of the person holding such options, warrants or other convertible securities, but are not deemed outstanding for computing the percentage of any other person. Except as otherwise noted, the named beneficial owner has the sole voting and investment power with respect to the shares of Class A Common Stock shown.
|
|
|
(c)
|
Includes 600,000 shares of Class A Common Stock underlying options that may be acquired upon exercise of such options.
|
|
|
(d)
|
Includes 23,750 shares of Class A Common Stock underlying options that may be acquired upon exercise of such options.
|
|
|
(e)
|
Includes 18,750 shares of Class A Common Stock underlying options that may be acquired upon exercise of such options.
|
|
|
(f)
|
Includes 92,067 shares owned by Grassmere Partners LLC, of which Mr. Brown is Chairman. Mr. Brown disclaims beneficial ownership of such shares except to the extent of any pecuniary interest therein.
|
|
|
(g)
|
Mr. Rhine is the Principal of Sabra Investments, LP and Sabra Capital Partners, LLC. Includes (i) 97,750 shares of Class A Common Stock owned directly, 145,000 shares of Class A Common Stock owned by Sabra Investments, LP, and 7,400 shares of Class A Common Stock owned by Sabra Capital Partners, LLC and (ii) 2,625 shares of Class A Common Stock subject to issuance upon exercise of currently exercisable warrants owned directly and 5,250 shares of Class A Common Stock subject to issuance upon exercise of currently exercisable warrants owned by Sabra Investments, LP.
|
|
|
(h)
|
Includes 1,649,144 shares underlying 5.5% Convertible Senior Notes due 2035. Peak6 Capital Management LLC (“Peak6”) is owned by Peak6 Investments, L.P., which is primarily owned by Aleph6 LLC. Matthew Hulsizer and Jennifer Just own and control Aleph6 LLC. Each of these entities and individuals has shared power to vote or direct the vote of, and to dispose or direct the disposition of such shares.
|
(i)
|
Includes 803,254 shares underlying 5.5% Convertible Senior Notes due 2035. Highbridge Capital Management, LLC (“Highbridge”) is the trading manager of Highbridge International LLC and Highbridge Tactical Credit & Convertibles Master Fund, L.P. (collectively, the “Highbridge Funds”), which hold the 5.5% Convertible Senior Notes due 2035. Highbridge may be deemed to be the beneficial owner of such shares.
|
|
|
(j)
|
Includes 1,383,797 shares underlying 5.5% Convertible Senior Notes due 2035. Zazove Associates, Inc. is the general partner of Zazove Associates, LLC, and Gene T. Pretti is the principal of Zazove Associates, Inc. Zazove Associates, LLC is registered as an investment advisor and has discretionary authority with regard to certain accounts that hold the Convertible Securities. No single account has a more than 5% interest of any class of the Class A Common Stock.
|
|
|
(k)
|
Includes 297,500 shares of Class A Common Stock subject to issuance upon exercise of currently exercisable warrants. Mr. Chez is a Strategic Advisor to the Company.
|
|
|
(l)
|
Includes 719,299 shares of Class A common stock underlying options and 7.875 shares of Class A common stock underlying warrants that may be acquired upon exercise thereof.
|
|
|
(m)
|
Based on the numbers of shares reported in the most recent Schedule 13D or Schedule 13G, as amended, as applicable, and filed by such stockholder with the SEC through June 12, 2017 and information provided by the holder or otherwise known to the Company.
|
|
|
|
For the fiscal years ended
March 31,
|
||||||
Type of Fees
|
2017
|
2016
|
|||||
(1) Audit Fees
|
$
|
351,000
|
|
|
$
|
372,902
|
|
(2) Audit-Related Fees
|
—
|
|
|
—
|
|
||
(3) Tax Fees
|
—
|
|
|
—
|
|
||
(4) All Other Fees
|
—
|
|
|
—
|
|
||
|
$
|
351,000
|
|
|
$
|
372,902
|
|
|
|
|
|
Date:
|
June 29, 2017
|
By:
|
/s/ Christopher J. McGurk
|
|
|
|
Christopher J. McGurk
Chief Executive Officer and Chairman of the Board of Directors
(Principal Executive Officer)
|
|
|
|
|
Date:
|
June 29, 2017
|
By:
|
/s/ Jeffrey S. Edell
|
|
|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
SIGNATURE(S)
|
|
TITLE(S)
|
|
DATE
|
|
|
|
|
|
/s/ Christopher J. McGurk
|
|
Chief Executive Officer
|
|
June 29, 2017
|
Christopher J. McGurk
|
|
and Chairman of the Board of Directors
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Jeffrey S. Edell
|
|
Chief Financial Officer
|
|
June 29, 2017
|
Jeffrey S. Edell
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Peter C. Brown
|
|
Director
|
|
June 29, 2017
|
Peter C. Brown
|
|
|
|
|
|
|
|
|
|
/s/ Patrick O'Brien
|
|
Director
|
|
June 29, 2017
|
Patrick O'Brien
|
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|
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/s/ Zvi Rhine
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|
Director
|
|
June 29, 2017
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Zvi Rhine
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Exhibit
Number
|
|
Description of Document
|
3.1
|
‑
|
Fourth Amended and Restated Certificate of Incorporation of the Company, as amended.(29)
|
3.2
|
‑
|
Amended and Restated Bylaws of the Company, as amended. (25)
|
4.1
|
‑
|
Specimen certificate representing Class A common stock. (1)
|
4.2
|
‑
|
Specimen certificate representing Series A Preferred Stock. (9)
|
4.3
|
‑
|
Limited Recourse Pledge Agreement, dated as of February 28, 2013, made by Cinedigm Digital Cinema Corp. in favor of Prospect Capital Corporation, as Collateral Agent. (19)
|
4.4
|
‑
|
Guaranty, Pledge and Security Agreement, dated as of February 28, 2013, made by Cinedigm DC Holdings, LLC, Access Digital Media, Inc. and Access Digital Cinema Phase 2, Corp., in favor of Prospect Capital Corporation, as Collateral Agent. (19)
|
4.5
|
‑
|
Limited Recourse Guaranty Agreement, dated as of February 28, 2013, made by Cinedigm Digital Cinema Corp. in favor of Prospect Capital Corporation, as Collateral Agent and as Administrative Agent. (19)
|
4.6
|
‑
|
Guaranty Agreement, dated as of October 17, 2013, by each of the signatories thereto and each of the other entities which becomes a party thereto, in favor of Société Générale, as Administrative Agent for the lenders. (21)
|
4.6.1
|
|
Supplement No. 1 to Guaranty Agreement, dated as of July 14, 2016, among Docurama, LLC, Dove Family Channel, LLC, Cinedigm OTT Holdings, LLC, Cinedigm Productions, LLC in favor of Société Générale, as Administrative Agent.(34)
|
4.7
|
‑
|
Amended and Restated Security Agreement, dated as of April 29, 2015 to Security Agreement, dated as of October 17, 2013, by and among the Company, the Loan Parties party thereto and the Company’s subsidiaries party thereto, and OneWest Bank, FSB as Collateral Agent for the Secured Parties. (24)
|
4.7.1
|
|
Second Amended and Restated Security Agreement, dated as of July 14, 2016 among the Company, the other Loan Parties signatory thereto, certain Subsidiaries of the Company, and CIT Bank, N.A., as Collateral Agent. (34)
|
4.8
|
‑
|
Indenture (including Form of Note), dated as of April 29, 2015, with respect to the Company’s 5.5% Convertible Senior Notes due 2035, by and between the Company and U.S. Bank National Association, as Trustee. (24)
|
4.9
|
‑
|
Form of Note issued on October 21, 2013. (21)
|
4.10
|
‑
|
Form of Warrant issued on October 21, 2013. (21)
|
4.11
|
‑
|
Form of Warrant issued to the Purchaser pursuant to the Securities Purchase Agreement, dated August 11, 2009, by and among the Company and Sageview Capital Master L.P.. (10)
|
4.12
|
‑
|
Registration Rights Agreement, dated as of August 11, 2009, by and among the Company and Sageview Capital Master L.P.. (10)
|
4.13
|
‑
|
Guaranty Agreement, dated as of July 14, 2016, among the Guarantors and in favor of Cortland Capital Market Services LLC, as Administrative and Collateral Agent. (34)
|
4.14
|
‑
|
Second Lien Security Agreement, dated as of July 14, 2016, among the Company, Loan Parties signatory thereto, certain Subsidiaries of the Company and Cortland Capital Market Services LLC, as Administrative and Collateral Agent. (34)
|
4.15
|
‑
|
Pledge Agreement, dated as of July 14, 2016 among the Company, the Guarantors and CIT Bank, N.A., as Collateral Agent. (34)
|
4.16
|
‑
|
Amended and Restated Guaranty and Security Agreement, dated as of February 28, 2013, among Cinedigm Digital Funding I, LLC and each Grantor from time to time party thereto and Société Générale, New York Branch, as Collateral Agent. (19)
|
4.17
|
‑
|
Amended and Restated Pledge Agreement, dated as of February 28, 2013, between Access Digital Media, Inc. and Société Générale, New York Branch, as Collateral Agent. (19)
|
4.18
|
‑
|
Amended and Restated Pledge Agreement, dated as of February 28, 2013, between Christie/AIX, Inc. and Société Générale, New York Branch, as Collateral Agent. (19)
|
4.19
|
‑
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Warrant issued on July 14, 2016. (34)
|
4.20
|
‑
|
Guaranty and Security Agreement, dated as of October 18, 2011, among Cinedigm Digital Funding 2, LLC, each Grantor from time to time party thereto, in favor of Société Générale, New York Branch, as Collateral Agent. (17)
|
4.21
|
‑
|
Security Agreement, dated as of October 18, 2011, between CHG-MERIDIAN U.S. Finance, Ltd. And Société Générale, New York Branch, as Collateral Agent. *
|
4.22
|
‑
|
Security Agreement, dated as of October 18, 2011, among CDF2 Holdings, LLC and each Grantor from time to time party thereto and Société Générale, New York Branch, as Collateral Agent for the Lenders and each other Secured Party. (17)
|
4.23
|
‑
|
Security Agreement, dated as of October 18, 2011, among CDF2 Holdings, LLC and each Grantor from time to time party thereto and Société Générale, New York Branch, as Collateral Agent for CHG-Meridian U.S. Finance, Ltd. And any other CHG Lease Participants. (17)
|
4.24
|
‑
|
Pledge Agreement, dated as of October 18, 2011, between Access Digital Cinema Phase 2 Corp. and Société Générale, New York Branch, as Collateral Agent. (17)
|
4.25
|
‑
|
Pledge Agreement, dated as of October 18, 2011, between CDF2 Holdings, LLC and Société Générale, New York Branch, as Collateral Agent. (17)
|
4.26
|
0
|
Form of Warrant issued on December 23, 2016. (36)
|
10.1
|
‑
|
Second Lien Loan Agreement, dated as of July 14, 2016, among the Company, the lenders
party thereto
and Cortland Capital Market Services LLC, as Administrative and Collateral Agent. (34)
|
10.1.1
|
‑
|
First Amendment to Second Lien Loan Agreement, dated as of August 4, 2016, among the Company, the lender party thereto and Cortland Capital Market Services Inc. as Administrative and Collateral Agent. (33)
|
10.1.2
|
0
|
Second Amendment to Second Lien Loan Agreement, dated as of October 7, 2016, among the Company, the lenders party thereto and Cortland Capital Market Services LLC, as Administrative and Collateral Agent. (29)
|
10.1.3
|
0
|
Third Amendment to Second Lien Loan Agreement, dated as of March 31, 2017, among the Company, the lenders party thereto and Cortland Capital Market Services Inc. as Administrative and Collateral Agent.*
|
10.2
|
‑
|
Severance Agreement, dated as of October 16, 2015, between the Company and Adam M. Mizel. (28)
|
10.3
|
‑
|
Second Amended and Restated 2000 Equity Incentive Plan of the Company. (5)
|
10.3.1
|
‑
|
Amendment dated May 9, 2008 to the Second Amended and Restated 2000 Equity Incentive Plan of the Company. (7)
|
10.3.2
|
‑
|
Form of Notice of Restricted Stock Award. (5)
|
10.3.3
|
‑
|
Form of Non-Statutory Stock Option Agreement. (6)
|
10.3.4
|
‑
|
Form of Restricted Stock Unit Agreement (employees). (7)
|
10.3.5
|
‑
|
Form of Stock Option Agreement. (2)
|
10.3.6
|
‑
|
Form of Restricted Stock Unit Agreement (directors). (7)
|
10.3.7
|
‑
|
Amendment No. 2 dated September 4, 2008 to the Second Amended and Restated 2000 Equity Incentive Plan of the Company. (8)
|
10.3.8
|
‑
|
Amendment No. 3 dated September 30, 2009 to the Second Amended and Restated 2000 Equity Incentive Plan of the Company. (11)
|
10.3.9
|
‑
|
Amendment No. 4 dated September 14, 2010 to the Second Amended and Restated 2000 Equity Incentive Plan of the Company. (15)
|
10.3.10
|
‑
|
Amendment No. 5 dated April 20, 2012 to the Second Amended and Restated 2000 Equity Incentive Plan of the Company. (16)
|
10.3.11
|
‑
|
Amendment No. 6 dated September 12, 2012 to the Second Amended and Restated 2000 Equity Incentive Plan of the Company. (18)
|
10.3.12
|
‑
|
Amendment No. 7 dated September 16, 2014 to the Second Amended and Restated 2000 Equity Incentive Plan of the Company. (22)
|
10.3.13
|
|
Amendment No. 8 dated September 8, 2016 to the Second Amended and Restated 2000 Equity Incentive Plan of the Company. (30)
|
10.3.14
|
|
Amendment No. 9 dated September 27, 2016 to the Second Amended and Restated 2000 Equity Incentive Plan of the Company. (31)
|
10.4
|
‑
|
Cinedigm Corp. Management Incentive Award Plan. (12)
|
10.5
|
‑
|
Form of Indemnification Agreement for non-employee directors. (13)
|
10.6
|
‑
|
Amended and Restated Employment Agreement between Cinedigm Corp. and Jeffrey S. Edell dated as of November 1, 2015. (26)
|
10.7
|
‑
|
[intentionally omitted]
|
10.8
|
‑
|
Employment Agreement between Cinedigm Corp. and William Sondheim dated as of December 4, 2014. (23)
|
10.9
|
‑
|
Registration Rights Agreement, dated as of August 4, 2016, among the Company and the holders party thereto. (33)
|
10.10
|
‑
|
Lease Agreement, dated as of August 9, 2002, by and between OLP Brooklyn Pavilion LLC and Pritchard Square Cinema LLC. (4)
|
10.10.1
|
‑
|
First Amendment to Contract of Sale and Lease Agreement, dated as of August 9, 2002, by and among Pritchard Square LLC, OLP Brooklyn Pavilion LLC and Pritchard Square Cinema LLC. (4)
|
10.10.2
|
‑
|
Second Amendment to Contract of Sale and Lease Agreement, dated as of April 2, 2003, by and among Pritchard Square LLC, OLP Brooklyn Pavilion LLC and Pritchard Square Cinema, LLC. (4)
|
10.10.3
|
‑
|
Third Amendment to Contract of Sale and Lease Agreement, dated as of November 1, 2003, by and among Pritchard Square LLC, OLP Brooklyn Pavilion LLC and Pritchard Square Cinema, LLC. (4)
|
10.10.4
|
‑
|
Fourth Amendment to Lease Agreement, dated as of February 11, 2005, between ADM Cinema Corporation and OLP Brooklyn Pavilion LLC. (3)
|
10.11
|
‑
|
Amendment No. 1 to Settlement Agreement, dated as of July 14, 2016, among the Company, Ronald L. Chez, the Chez Family Foundation, Sabra Investments, LP, Sabra Capital Partners, LLC, and Zvi Rhine. (34)
Amendment No. 1 to Settlement Agreement, dated as of July 14, 2016, among the Company, Ronald L. Chez, the Chez Family Foundation, Sabra Investments, LP, Sabra Capital Partners, LLC, and Zvi Rhine.
Amendment No. 1 to Settlement Agreement, dated as of July 14, 2016, among the Company, Ronald L. Chez, the Chez Family Foundation, Sabra Investments, LP, Sabra Capital Partners, LLC, and Zvi Rhine.
Amendment No. 1 to Settlement Agreement, dated as of July 14, 2016, among the Company, Ronald L. Chez, the Chez Family Foundation, Sabra Investments, LP, Sabra Capital Partners, LLC, and Zvi Rhine.
|
10.12
|
‑
|
Term Loan Agreement, dated as of February 28, 2013, by and among Cinedigm DC Holdings, LLC, Access Digital Media, Inc., Access Digital Cinema Phase 2, Corp., the Guarantors party thereto, the Lenders party thereto and Prospect Capital Corporation as Administrative Agent and Collateral Agent. (19) (Confidential treatment granted under Rule 24b-2 as to certain portions which are omitted and filed separately with the SEC.)
|
10.13
|
‑
|
Commitment Letter, dated July 14, 2016, between Christopher McGurk and the Company. (34)
|
10.14
|
‑
|
Forward Stock Purchase Confirmation, dated April 24, 2015, by and between the Company and Société Générale, relating to the Company’s private offering of 5.5% Convertible Senior Notes due 2035. (24)
|
10.15
|
‑
|
Exchange Agreement dated as of December 22, 2016 between Cinedigm Corp. and Cap 1 LLC. (36)
|
10.16
|
‑
|
Exchange Agreement, dated as of December 23, 2016 between Cinedigm Corp. and Sageview Capital Master L.P. (36)
|
10.17
|
‑
|
Exchange Agreement, dated as of February 8, 2017, between the Company, BlueMountain Equity Alternatives Master Fund L.P., BlueMountain Logan Opportunities Master Fund L.P., BlueMountain Credit Alternatives Master Fund L.P., BlueMountain Montenvers Master Fund SCA SICAV-SIF, and BlueMountain Foinaven Master Fund L.P. (37)
|
10.18
|
‑
|
Exchange Agreement, dated as of February 17, 2017, between the Company and Wolverine Flagship Fund Trading Limited. (38)
|
10.19
|
‑
|
Second Amended and Restated Credit Agreement, dated as of April 29, 2015, among the Company, the Lenders party thereto, Société Générale, as Administrative Agent, and OneWest Bank, FSB, as Collateral Agent. (24)
|
10.19.1
|
‑
|
Amendment No. 1 to the Second Amended and Restated Credit Agreement, dated as of June 16, 2015, among Cinedigm Corp, the Lenders party thereto, and Société Générale as Administrative Agent.(27)
|
10.19.2
|
‑
|
Amendment No. 2 and Waiver No. 1 to the Second Amended and Restated Credit Agreement, dated as of December 21, 2015, among Cinedigm Corp., the Lenders party thereto, and Société Générale as Administrative Agent.(32)
|
10.19.3
|
‑
|
Amendment No. 3 and Waiver No. 2 to the Second Amended and Restated Credit Agreement, dated as of May 15, 2016, among Cinedigm Corp, the Lenders party hereto, and Société Générale, as Administrative Agent.(33)
|
10.19.4
|
|
Amendment No. 4 and Consent to the Second Amended and Restated Credit Agreement, dated as of July 14, 2016, among Cinedigm Corp, the Lenders party thereto and Société Générale as Administrative Agent.(34)
|
10.20
|
‑
|
Amended and Restated Credit Agreement, dated as of February 28, 2013, among Cinedigm Digital Funding I, LLC, the Lenders party thereto and Société Générale, New York Branch, as administrative agent and collateral agent for the lenders and secured parties thereto. (19)
|
10.21
|
‑
|
Strategic Advisor Agreement between Cinedigm Corp. and Ronald L. Chez dated as of April 3, 2017. (39)
|
10.22
|
‑
|
Lease for 45 W. 36
th
Street, New York, NY, dated as of April 10, 2017 between 45 West 36
th
Street LLC and Cinedigm Corp., together with Sublease for 45 W. 36
th
Street, New York, NY, dated as of April 10, 2017 between NTT Data, Inc. and Cinedigm Corp.*
|
10.23
|
‑
|
Lease for 15301 Ventura Boulevard, Sherman Oaks, CA, dated as of January 4, 2017 between Douglas Emmett 2016 and Cinedigm Corp.*
|
10.24
|
‑
|
Securities Purchase Agreement, dated October 17, 2013, among Cinedigm Corp. and the Purchasers party thereto. (21)
|
10.25
|
‑
|
Common Stock Purchase Agreement, dated October 17, 2013, among Cinedigm Corp. and the Purchasers party thereto. (21)
|
10.26
|
‑
|
Amended and Restated Employment Agreement between Cinedigm Digital Cinema Corp. and Christopher J. McGurk dated as of August 22, 2013. (20)
|
10.26.1
|
|
Amendment to Amended and Restated Employment Agreement between Cinedigm Corp. and Christopher J. McGurk dated as of January 4, 2017.(35)
|
ARTICLE 1
|
DEFINED TERMS 1
|
Section 1.1
|
Definitions 1
|
Section 1.2
|
Certain Other Terms 3
|
ARTICLE 2
|
[RESERVED] 3
|
ARTICLE 3
|
GRANT OF SECURITY INTEREST 3
|
Section 3.1
|
Collateral 3
|
Section 3.2
|
Grant of Security Interest in Collateral 4
|
ARTICLE 4
|
REPRESENTATIONS AND WARRANTIES 4
|
Section 4.1
|
Title; No Other Liens 4
|
Section 4.2
|
Perfection and Priority 4
|
Section 4.3
|
Jurisdiction of Organization; Chief Executive Office 5
|
Section 4.4
|
Locations of Books and Records 5
|
Section 4.5
|
[Reserved] 5
|
Section 4.6
|
[Reserved] 5
|
Section 4.7
|
[Reserved] 5
|
Section 4.8
|
[Reserved] 5
|
Section 4.9
|
Specific Collateral 5
|
Section 4.10
|
[Reserved] 5
|
Section 4.11
|
Solvency 5
|
Section 4.12
|
Representations and Warranties of the Credit Agreement 5
|
ARTICLE 5
|
COVENANTS 5
|
Section 5.1
|
Maintenance of Perfected Security Interest; Further Documentation and Consents 6
|
Section 5.2
|
Changes in Locations, Name, Etc 6
|
Section 5.3
|
[Reserved] 6
|
Section 5.4
|
[Reserved] 7
|
Section 5.5
|
[Reserved] 7
|
Section 5.6
|
[Reserved] 7
|
Section 5.7
|
[Reserved] 7
|
Section 5.8
|
Notices 7
|
Section 5.9
|
[Reserved] 7
|
Section 5.10
|
Compliance with Credit Agreement 7
|
ARTICLE 6
|
REMEDIAL PROVISIONS 7
|
Section 6.1
|
Code and Other Remedies 7
|
Section 6.2
|
Accounts and Payments in Respect of General Intangibles; Contracts 10
|
Section 6.3
|
[Reserved] 11
|
Section 6.4
|
Contracts 11
|
Section 6.5
|
Proceeds to be Turned over to and Held by Collateral Agent 12
|
Section 6.6
|
[Reserved] 12
|
Section 6.7
|
Deficiency 12
|
ARTICLE 7
|
THE COLLATERAL AGENT 12
|
Section 7.1
|
Collateral Agent's Appointment as Attorney-in-Fact 12
|
Section 7.2
|
Authorization to File Financing Statements 14
|
Section 7.3
|
Authority of Collateral Agent 14
|
Section 7.4
|
Duty: Obligations and Liabilities 15
|
ARTICLE 8
|
MISCELLANEOUS 15
|
Section 8.1
|
Reinstatement 15
|
Section 8.2
|
Release of Collateral 16
|
Section 8.3
|
[Reserved] 16
|
Section 8.4
|
No Waiver by Course of Conduct 16
|
Section 8.5
|
Amendments in Writing 16
|
Section 8.6
|
[Reserved] 16
|
Section 8.7
|
Notices 16
|
Section 8.8
|
Successors and Assigns 16
|
Section 8.9
|
Counterparts 16
|
Section 8.10
|
Severability 17
|
Section 8.11
|
Governing Law 17
|
Section 8.12
|
WAIVER OF JURY TRIAL 17
|
Section 8.13
|
Multiparty Agreement 17
|
Section 8.14
|
Non-Recourse 17
|
Schedule 2
|
- Jurisdiction of Organization; Chief Executive Office
|
Chief Executive Office:
|
21800 Oxnard Street, Suite 410, Woodland Hills, CA 91367
|
REQUIRED LENDER:
|
FIRST BANK & TRUST AS CUSTODIAN OF THE RONALD L. CHEZ IRA #1073
|
REQUIRED LENDER:
|
WOLVERINE FLAGSHIP FUND TRADING LIMITED
|
First Bank & Trust as Custodian of the Ronald L. Chez IRA #1073
|
$3,950,000
|
McGurk Living Trust
|
$500,000
|
Millenium Trust Co., LLC Custodian FBO Patrick W. O’Brien IRA a/c #xxxx55HX3
|
$50,000
|
Hackett Family Trust***
|
$400,000
|
UVE Partners
|
$250,000
|
Lotus Investors
|
$75,000
|
Hudson Asset Partners
|
$150,000
|
Hedy Klineman Trust
|
$150,000
|
BlueMountain Equity Alternatives Master Fund L.P.
|
$110,000
|
BlueMountain Logan Opportunities Master Fund L.P.
|
$53,000
|
Blue Mountain Credit Alternatives Master Fund L.P.
|
$1,053,000
|
BlueMountain Montenvers Master Fund SCA SICAV-SIF
|
$105,000
|
BlueMountain Foinaven Master Fund L.P.
|
$79,000
|
Wolverine Flagship Fund Trading Limited
|
$2,100,000
|
TOTAL OUTSTANDING
|
$9,025,000
|
(i)
|
For any work performed directly by Tenant or any contractor hired by Tenant or Tenant’s contractor, Tenant or Tenant’s contractor shall carry worker’s compensation insurance in accordance with the statutory limits, “all risk” Builders Risk coverage and general liability insurance, with completed operation endorsement, for any occurrence in or about the Building, under which Landlord and Same Properties whose name and address have been furnished to Tenant shall be named as additional parties insured, but not less than two million dollars ($2,000,000.00), with insurers reasonably satisfactory to Landlord. Tenant shall furnish Landlord with evidence that such insurance is in effect at or before the commencement of Alterations and, on request, at reasonable intervals thereafter during the continuance of Alterations and a five million dollar ($5,000,000.00) umbrella;
|
(ii)
|
Tenant shall furnish to Landlord a copy of all architectural drawing, plans or specifications for Landlord’s approval, which approval shall not be unreasonably withheld, delayed, or conditioned; and
|
(iii)
|
For any work performed directly by Tenant or any contractor hired by Tenant or Tenant’s contractor, Tenant will hold Landlord harmless for any and all violations concerning work, permits, and filings required, all of which will be done at Tenant’s sole cost and expense.
|
(iv)
|
Each contractor performing A Iterations on behalf of Tenant shall indemnify Landlord with an indemnity agreement substantially in the form attached hereto and made a part hereof as Exhibit A.
|
Time Period
|
Per Year
|
Per Month
|
5/1/2021-4/30/2022
|
$498,841.88
|
$41,570.16
|
5/1/2022-4/30/2023
|
$513,807.13
|
$42,817.26
|
5/1/2023-4/30/2024
|
$529,221.35
|
$44,101.78
|
5/1/2024-4/30/2025
|
$545,097.99
|
$45,424.83
|
5/1/2025-4/30/2026
|
$561,450.93
|
$46,787.58
|
1)
|
Contractor agrees to indemnify and save harmless the Landlord, any Superior Lessor and any Superior Mortgagee and their respective officers, employees, agents, affiliates, subsidiaries, and partners, and each of them, from and with respect to any claims, demands, suits, liabilities, losses and expenses, including reasonable attorneys’ fees, arising out of or in connection with the Work (and/or imposed by law upon any or all of them) because of personal injuries, including death at any time resulting therefrom, and loss of or damage to property, including consequential damages, whether such injuries to persons or property are claimed to be due to negligence of the Contractor, Tenant, Landlord or any other party entitled to be indemnified as aforesaid except to the extent specifically prohibited by law (and any such prohibition shall not void this Agreement but shall be applied only to the minimum extent required by law),
|
2)
|
Contractor shall provide and maintain at its own expense, until completion of Work, the following insurance:
|
a)
|
Workers’ Compensation and Employers’ Liability Insurance covering each and every workman employed in, about or upon the Work, as provided for in each and every statute applicable to Workers’ Compensation and Employers’ Liability Insurance.
|
b)
|
Commercial General Liability Insurance Including Coverage for Completed Operations, Broad Form Property Damage “XCU” exclusion if any deleted, and
|
c)
|
Commercial Automobile Liability Insurance (covering all owned, non-owned and/or hired motor vehicles to be used in connection with the Work) for not less than the following limits:
|
3)
|
Contractor shall require all of its subcontractors engaged in the Work to provide the following insurance:
|
a)
|
Commercial General Liability Insurance Including Protective and Contractual Liability Coverage with limits of liability at least equal to the above stated limits.
|
b)
|
Commercial Automobile Liability Insurance (covering all owners, non-owned and/or hired motor vehicles to be used in connection with the Work) for not less than the following limits:
|
1.
|
Demise
. Sublandlord hereby subleases to Subtenant and Subtenant hereby subleases from Sublandlord the Subleased Premises, including a right of passage from the building corridor to the Subleased Premises, upon and subject to the terms, covenants, and conditions hereinafter set forth. This Sublease is specifically subject and subordinate to the Principal Lease, any ground or underlying leases (the “Ground Leases”), any mortgages and/or deeds of trust, modifications, consolidations, and replacements of the Ground Leases and said mortgages and deeds of trust (collectively, “Superior Interests”).
|
2.
|
Term
. The term of this Sublease (the “Term”) shall commence upon the later of the (i) full execution of this Sublease by Sublandlord and Subtenant, receipt of consent by Overlandlord to this Sublease, and delivery of possession of the Subleased Premises to Subtenant in the condition required under this Sublease; (ii) or July 1, 2017 (the “Commencement Date”) and shall terminate no later than at 11:59 P.M. on April 30, 2019. The anticipated Commencement Date (the “Anticipated Commencement Date”) is July 1, 2017. Sublandlord shall not be liable to Subtenant for any loss or damage caused by any failure to deliver possession of the Subleased Premises to Subtenant on the Anticipated Commencement Date.; provided, however, that if the Commencement Date has not occurred by August 15, 2017, Subtenant may terminate this Lease and neither party shall have any further rights, obligations or liabilities under this Sublease.
|
a)
|
Subtenant agrees to pay Sublandlord as rent for the Subleased Premises three hundred ninety-nine thousand and 00/100 dollars ($399,000.00 / $38 p.s.f.) for the first twelve (12) months of the Term (the “Fixed Annual Rent”) in equal monthly installments on the first day of each month in the amount of $33,250.00 (“Monthly Base Rent”). On the first anniversary of this Sublease (namely, July 1, 2018) and thereafter, Subtenant agrees to pay Sublandlord as rent for the Subleased Premises an annual rate of four hundred ten thousand nine hundred seventy and 00/100 dollars ($410,970.00) which shall be prorated for the remainder of the Term in equal monthly installments of thirty-four thousand two hundred forty-seven and 50/100 dollars ($34,247.50).
|
b)
|
Commencing on the Commencement Date Subtenant shall pay to Sublandlord Subtenant’s Proportionate Share (hereafter defined) of Operating Expense Escalations as defined in Article 42 of the Principal Lease of, but Subtenant shall not be liable for any portion of the Tax Escalation as defined in Article 42.03 of the Principal Lease or any other real estate taxes or assessments imposed upon Sublandlord or the Subleased Premises.
|
c)
|
All payments due under this Section shall be payable without demand (except as expressly provided), and without abatement, offset, deduction, or counterclaim to the order of
NTT DATA, Inc., 5601 Granite Parkway, Suite 1000, Plano, Texas 75024 Attention: VP-Facilities
, or elsewhere as designated from time to time in writing or by Sublandlord. If Subtenant shall fail to pay (i) any installment of Monthly Base Rent within five (5) days after its due date or (ii) any additional rent (as provided in subparagraph (a) above) within ten (10) days after its due date, Subtenant shall also pay to Sublandlord interest on the amount overdue from its original due date at a rate of the lesser of 1.5% per month and the maximum rate allowed by law, such interest to be payable as additional rent hereunder. The payment of such late charge shall be in addition to all other rights and remedies available to Sublandlord in the case of non-timely payment of Monthly Base Rent and/or additional rent. Subtenant’s obligations under this Section shall survive the expiration of earlier termination of the Term.
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4.
|
Use
. Subtenant shall use the Subleased Premises for the purposes set forth in the Principal Lease and for no other purpose whatsoever. Subtenant shall use and occupy the Subleased Premises in full compliance with the terms of the Principal Lease.
|
5.
|
Incorporation of Principal Lease, Inapplicability of Certain Provisions, Attornment
|
a)
|
The terms and provisions of the Principal Lease are incorporated herein by reference, except for such provisions as are inapplicable to the Subleased Premises or are inconsistent with or modified by the terms of this Sublease, and further except that all references to the premises shall refer, instead, to the Subleased Premises and all references to landlord and tenant shall refer instead to Sublandlord and Subtenant respectively.
|
b)
|
Subtenant covenants and agrees that if, for any reason whatsoever, the Principal Lease or leasehold estate of the tenant thereunder is terminated, this Sublease shall also terminate as of the date of the termination of the Principal Lease unless Overlandlord elects to have this Sublease continue in full force, in which case this Sublease will continue as a direct lease between Overlandlord and Subtenant, and Subtenant will attorn to Overlandlord and will recognize Overlandlord as Subtenant’s landlord under this Sublease. Subtenant covenants and agrees to execute and deliver, at any time, within ten (10) days following a request therefor by Sublandlord or Overlandlord, any instrument which may be reasonably necessary or appropriate to evidence such attornment.
|
c)
|
Subtenant shall perform all the obligations of the tenant under the Principal Lease except as otherwise provided by this Sublease, and Subtenant’s obligations shall be performed for the benefit of Sublandlord or Overlandlord as Sublandlord may determine to be appropriate under the circumstances. Subtenant shall indemnify Sublandlord against and hold Sublandlord harmless from all claims, damages, costs, liabilities and expenses including, but not limited to, reasonable attorneys’ fees and disbursements, arising from or in connection with any failure to perform or observe the obligations of the tenant under the Principal Lease as incorporated in this Sublease by reference, except to the extent Subtenant is not obligated to perform such obligations in accordance with the terms of this Sublease. Subtenant shall not do, omit or permit to be done any act or thing, which is, or with notice or the passage of time would be a default under the Principal Lease or this Sublease.
|
a)
|
Subtenant agrees that it has inspected the Subleased Premises, agrees to take the same in their present “as is” condition, and acknowledges that no representation with respect to their condition have been made and that Sublandlord will not perform any work to prepare the Subleased Premises for Subtenant’s occupancy. Any work required by the Subtenant to prepare the Subleased Premises for its occupancy and any other changes, alterations, or improvements desired to be made to the Subleased Premises by Subtenant (collectively, “Alterations”) shall be at the sole cost and expense of Subtenant and shall be subject to the prior written approval of Sublandlord, which approval-shall not be unreasonably withheld, conditioned or delayed, and of Overlandlord and any Alterations so approved shall be performed in full compliance with the applicable provisions of the Principal Lease. Subtenant
|
b)
|
Sublandlord and Subtenant hereby agree that:
|
(i)
|
Sublandlord’s furniture, workstations shall remain in the Premises and shall become the property of the Subtenant upon the expiration of the Sublease.
|
(ii)
|
HVAC systems shall be delivered in good working order.
|
7.
|
Repair and Maintenance
. Subtenant shall at its own expense maintain and keep the Subleased Premises in good order, condition, and repair. Subtenant shall be responsible for all damage and/or injury done to the Subleased Premises or to the Building during the Term by Subtenant or by its employees, agents, independent contractors, invitees, or customer. Subtenant is responsible for its janitorial service in the Subleased Premises. Subtenant assumes responsibility and shall pay for all utilities exclusively serving the Subleased Premises
=
and agrees to be directly billed by the applicable utility companies, when possible, pursuant to the terms of the Principal Lease.
|
8.
|
Subletting/Assignment
. Subtenant shall not, by operation of law or otherwise, assign this Sublease to, or further sublet to or permit the use or occupancy of all or any part of the Subleased Premises by any other party without the prior written consent of Sublandlord, which consent shall not be unreasonably withheld, conditioned or delayed. In addition, Subtenant’s assignment of the Sublease is subject to overlandlord’s written consent pursuant to the terms of the Principal Lease. Subtenant agrees to pay any and all of Overlandlord’ s expenses and costs charged to the Sublandlord for the review of all related documents and/or the provision of the aforementioned consent except in connection with Overlandlord’s review of this Sublease and all related documentation.
|
9.
|
Sublandlord’s Obligations
. Sublandlord agrees that Subtenant shall be entitled to receive all services and repairs provided by Overlandlord under the Principal Lease, and that Sublandlord will cooperate with Subtenant, at Subtenant’s sole cost and expense, to cause Overlandlord to perform Overlandlord’s obligations under the Principal Lease with respect to the Subleased Premises, so long as Subtenant is not in default hereunder beyond any applicable notice and cure period. It is expressly agreed by the parties, however, that Sublandlord does not assume any obligation to perform the terms, covenants, and conditions contained in the Principal Lease on the part of Overlandlord under the Principal Lease to be performed, or any liability for the accuracy of any warranty or representation made by Overlandlord under Principal Lease and that Subtenant shall look solely to Overlandlord for the performance of such obligations and the inaccuracy of any such warranties or representations.
|
10.
|
Release from Liability
. Neither Sublandlord nor any of its officers, agents, or employees shall be liable for any injury, loss, or damage to persons or property, sustained by Subtenant or any other person or other entity due to (i) the Subleased Premises, the Building or any
|
11.
|
Right to Cure
. If Subtenant fails to fulfill any of its obligations under this Sublease including, but not limited to, its obligations to maintain and repair the Subleased Premises, which failure continues for more than 20 days after written notice to Subtenant (except in case of emergency where no notice and cure period shall be afforded Subtenant) then Sublandlord or Overlandlord may, at its option, fulfill such obligation on Subtenant’s behalf and Subtenant shall upon demand reimburse Sublandlord for all reasonable expenditures, fines or damages (other than indirect or consequential damages) sustained by Sublandlord due to Subtenant’s noncompliance with or nonperformance or breach of any of the terms, covenants, or conditions of this Sublease or of the Principal Lease as incorporated herein. All reimbursements under this Section 11 shall constitute additional rent payable under this Sublease and shall bear interest in accordance with Section 3 (c) above.
|
a)
|
Subtenant shall throughout the Term and its sole cost and expense maintain in full force and effect such policies of insurance as are required of Sublandlord as Tenant under Article 47 of the Principal Lease and to the extent not provided therein, policies insuring Subtenant from:
|
i)
|
All claims, demands, and/or actions for injury to or death of any person in any amount of no less than $2,000,000.00 for injury to or death of more than one person in any one occurrence to the limit of $3,000,000.00 made by, or on behalf of, any person or other entity arising from, related to or in connection with the Subleased Premises and $2,000,000.00 for property damage.
Sublandlord and Overlandlord shall be named as additional insureds on such policy of insurance
. The foregoing insurance limits shall be increased to such amounts as the Overlandlord may require upon not less than thirty (30) days’ notice to Subtenant; and
|
ii)
|
All worker’s compensation claims as required by applicable law.
|
b)
|
Subtenant shall not store upon the Subleased Premises any materials or use the Subleased Premises in any manner that may result in an increase in Sublandlord’s and/or Overlandlord’s premiums for the fire or casualty insurance insuring the Building or Subleased Premises. Without limiting the foregoing, in the event that Subtenant’s storage of materials upon or use of the same at the Subleased Premises results in an increase in said premiums, Subtenant shall pay to Sublandlord or Overlandlord, as the case may be, a sum equal to the amount of such increase following delivery to Subtenant of reasonably detailed information evidencing that Subtenant’s actions were the cause of such increase in premiums.
|
13.
|
Indemnity
. Subtenant will protect, defend, indemnify, and hold harmless Sublandlord and its agents, directors, officers, and employees from and against all liabilities, obligations, claims, damages, penalties, causes of action, costs, and expenses (including without limitation reasonable attorneys’ fees and disbursements) imposed upon or incurred by or asserted against any one or more of the aforesaid by reason of (i) any failure on the part of Subtenant to perform any obligations of Subtenant hereunder, (ii) any damage or injury to persons or property occurring upon or in connection with the use or occupancy of the Subleased Premises, or (iii) the performance of any labor or services or the furnishing of any material or other property in respect of the Subleased Premises or any part thereof except to the extent caused by the negligence or willful misconduct of Overlandlord or Sublandlord, or their respective agents, directors, officers or employees; and if any action, suit or proceeding is brought against any one or more of the aforesaid by reason of any such occurrence, Subtenant will, at Sublandlord’s and Overlandlord’s respective options, either defend such action, suit or proceeding at Subtenant’s cost and expense with counsel approved in writing by Sublandlord or Overlandlord, as the case may be, or reimburse Sublandlord or Overlandlord, as the case may be, upon demand and as additional rent hereunder for such costs and expenses (including reasonable attorneys’ fees and disbursements) as Sublandlord or Overlandlord, as the case may be, may incur in connection with such defense. The terms and provisions of this Section 13 shall survive the expiration or earlier termination of the Term.
|
14.
|
Consents
. The parties agree that this Sublease shall not become effective for any purpose unless and until it has been consented to in writing by Overlandlord and by any other entitles whose consent is required under the Principal Lease (“Third Parties”). Sublandlord shall reasonably promptly after receipt of fully executed copies of this Sublease submit the same to Overlandlord and any Third Parties for its/their consent; provided, however, that Sublandlord shall not in any event be liable to Subtenant for any failure to obtain same. Subtenant shall fully cooperate with Sublandlord and Overlandlord and any Third Parties in order to obtain the necessary consent(s) including, but not limited to, promptly supplying such information and/or documentation as Overlandlord and/or any Third Parties may request in connection therewith. If the consent of Overlandlord and that of any Third Parties is not obtained within 45 days after full execution and delivery of this Sublease (or if
|
15.
|
Termination
. Upon any termination of this Sublease, expiration or otherwise (unless Subtenant has entered into a direct lease with Overlandlord commencing upon the expiration of this Sublease):
|
a)
|
Subtenant shall immediately vacate the Subleased Premises and surrender possession thereof to Sublandlord in as good condition and as when Subtenant took possession, ordinary wear and tear and repair acts of God excepted and otherwise in accordance with the applicable provisions of the Principal Lease;
|
b)
|
Sublandlord shall have full authority and license to enter the Subleased Premises and take possession subject to, and in accordance with applicable law; and
|
c)
|
Subtenant shall remove from the Subleased Premises all property not owned by Overlandlord or Sublandlord, and shall repair and restore any damage to the Subleased Premises and the Building caused by the removal thereof. If Subtenant leaves any such property in the Subleased Premises, it shall be deemed abandoned and title thereto shall pass to Sublandlord with respect to the removal of any such property and the repair and restoration of any damage thereby caused, which obligation shall survive the expiration or other termination of this Sublease.
|
d)
|
If the Subleased Premises are not surrendered upon termination of this Sublease, Subtenant shall indemnify Sublandlord against any liability resulting therefrom (including without limitation any liability accruing to Overlandlord under the Principal Lease). Subtenant’s obligations under this Section 15 shall survive the expiration or earlier termination of the Term.
|
a)
|
No receipt of money by Sublandlord from Subtenant after the service of any notice or after the commencement of any suit of after final Judgment for possession of the Subleased Premises shall waive any default by Subtenant under this Sublease or reinstate, continue, or extend the Term or affect any such notice or suit, as the case may be.
|
b)
|
No waiver of any default hereunder shall be implied from omission by Sublandlord to take any action on any default other than and only for the time and extent as may be specified in an express written waiver.
|
17.
|
Broker
. Each of the parties hereto represent and warrant to the other that it has dealt with no broker, finder or agent, in connection with the negotiation for or obtaining of this Sublease other than E.B. Smith and Savills Studley, Inc. as the representative of the Sublandlord and Jonathan Barry and Associates, Inc. as the representative of the Subtenant (the “Brokers”). The Brokers shall be paid in accordance with the terms of separate written agreement. Each party agrees to indemnify and hold harmless from and against all loss, liability, and expenses (including reasonable attorneys’ fees and disbursements) incurred by the other as a result of any claim made against the other which is based upon a breach of said representation by the representing party. This Section shall survive the expiration or other termination of this Sublease.
|
18.
|
Security Deposit.
|
a)
|
As security for the faithful performance and observance by Subtenant of the terms, provisions, covenants, and conditions of this Sublease, Subtenant has delivered to Sublandlord a security deposit, or in the alternative a Letter of Credit, in form reasonably satisfactory to Sublandlord from a financial institution reasonably acceptable to Sublandlord (together, the “Security”), in the amount of ninety-nine thousand seven hundred fifty and 00/100 dollars ($99,750.00). In the event Subtenant defaults in any of the terms, provisions, covenants, and conditions of this Sublease, including, but not limited to, the payment of Monthly Base Rent and/or additional rent, Sublandlord may, at its discretion, use, apply or retain the whole or any part of the Security so deposited to the extent required for the payment of any Monthly Base Rent and additional rent; or any other sum as to which Sublandlord may be entitled or which it may expend by reason of Subtenant’s default.
|
b)
|
If Sublandlord applies or retains all or any portion of the Security delivered hereunder, Subtenant shall forthwith restore the amount so applied or retained so that all times the amount deposited shall be not less than the Security required hereunder.
|
c)
|
If Subtenant fully faithfully complies with all of the terms, provisions, covenants, and conditions of this Sublease, the Security shall be returned without interest to Subtenant within ten (10) days following the Termination Date and after delivery of entire possession of the Subleased Premises to Sublandlord in accordance with and in the condition required by this Sublease and receipt of acknowledgement from Overlandlord to Sublandlord that the Premises are damage free and that no deductions
|
a)
|
In all provisions of the Principal Lease requiring that Sublandlord, as tenant thereunder, notify Overlandlord, Subtenant shall be required to give notice to both Sublandlord and Overlandlord.
|
b)
|
All notices, demands, requests, defaults and termination to be given in connection with this Sublease (collectively, “notices”) shall be in writing and shall be sent by receipted personal delivery, by registered or certified U.S. mail, return receipt requested, or by Federal Express, Airborne Express, or other national overnight air courier, to Sublandlord at
NTT DATA, Inc., Attention: VP-Facilities, 5601 Granite Parkway, Suite 1000, Plano, Texas 75024 with a copy to “NTT DATA Contract/Legal Services” at 100 City Square, Boston, Massachusetts 02129
, and to Subtenant at the Subleased Premises. Either party may change the address or person to receive notices upon written notice to the other. All notices shall be deemed effective upon receipt or rejection, if sent by personal delivery, three (3) days after prepaid tender, if sent by air courier or U.S. mail.
|
a)
|
This Sublease shall be governed by and construed in accordance with the laws of the State of New York.
|
b)
|
The section headings are inserted only for convenience and reference and in no way, define, limit, or describe the scope of this Sublease nor the intent of any provision hereof.
|
c)
|
The provisions of this Sublease constitute, and are intended to constitute, the entire agreement of the parties to this Sublease. No terms, conditions, representations, warranties, promises or under takings of any nature whatever, express or implied, exist between the parties except as herein expressly set forth.
|
d)
|
Any executory agreement hereafter made between Sublandlord and Subtenant shall be ineffective to change, modify, waive, release, discharge, terminate or effect an abandonment or surrender of this Sublease, in whole or in part, unless such agreement is in writing and signed by the parties hereto and consented to by Overlandlord and all Third Parties to the extent, if required by the Principal Lease and/or any such party’s consent to this Sublease.
|
e)
|
If any term, covenant, condition or provision of this Sublease is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions shall remain in full three and effect, and shall in no way be impaired or
|
f)
|
This Sublease shall bind and inure to the benefit of Sublandlord and Subtenant and their respective heirs, distributees, executors, administrators, successors and, except as otherwise provided herein.
|
g)
|
Sublandlord and Subtenant warrant and represent to each other that their respective undersigned representatives have all due power and authority to execute this Sublease on their respective behalf and that all necessary corporate or similar action has been taken to ensure the binding effect of the terms and provisions of this Sublease.
|
h)
|
Each right and remedy of Sublandlord or Subtenant provided for in this Sublease shall be cumulative and shall be in addition to every other right and remedy provided in this Sublease or now or hereafter existing at law or in equity or by statute or otherwise.
|
i)
|
It is understood and agreed that the obligations of Sublandlord under this Sublease shall not be binding upon Sublandlord with respect to any period subsequent to the transfer of its interest in the Principal Lease, and that in the event of such transfer said obligations shall thereafter be binding upon the transferee of the Sublandlord’s interest as tenant under the Principal Lease, but only with respect to the period ending with a subsequent transfer thereof.
|
j)
|
Sublandlord and Subtenant hereby waive, to the extent permitted by law, the right to a jury trial in any action or legal proceeding between the parties or their successors arising out of this Sublease or Subtenant’s occupancy of the Sublease Premises.
|
k)
|
This sublease may be executed in one or more counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same Sublease.
|
l)
|
If required by Sublandlord or Overlandlord, Subtenant, at its sole expense, agrees to restore the Subleased Premises to its present condition at the termination of the Sublease in the event that it elects (with all appropriate consent) to make alterations to the space.
|
m)
|
Access to after hours HVAC is governed by the Principal Lease at Article
31.2
. Subtenant agrees to pay any and all separately metered utility charges for its space.
|
n)
|
The parties agree that any rights to expand, contract, terminate, extend or renew the lease as provided under the Principal lease are not applicable to this Sublease.
|
|
Douglas Emmett Management,
LLC
808 Wilshire Boulevard, 2nd Floor, Santa Monica, California 90401
Telephone 310.255,7777 Facsimile 310.255.7778
|
Re:
|
Office Lease
15301 Ventura Boulevard, Suite 410 & 420 Sherman Oaks, California 91403 |
cc:
|
Belinda Butcher
John Sharkey Stella Cartozian |
Date:
|
January 4, 2017
|
Landlord:
|
DOUGLAS EMMETT 2016, LLC,
a Delaware limited liability company |
Tenant:
|
CINEDIGM CORP.,
a Delaware corporation |
1.1
|
Premises:
|
15301 Ventura Boulevard, Suites 410 and 420 Sherman Oaks, California 91403
|
1.4
|
Rentable Area of Premises:
|
Approximately 11,598 square feet consisting of:
Suite 410: Approximately 3,037 square feet
Suite 420: Approximately 8,561 square feet |
1.4
|
Usable Area of Premises:
|
Approximately 9,109 square feet consisting of:
Suite 410: Approximately 2,385 square feet
Suite 420: Approximately 6,724 square feet |
2.1
|
Term:
|
Five (5) years
|
|
Commencement Date:
|
March 31, 2017
|
|
Expiration Date:
|
March 31, 2022
|
3.1
|
Fixed Monthly Rent:
|
$38,853.30
|
3.7
|
Security Deposit:
|
$60,873.33
|
4.1
|
Tenant’s Share:
|
13.56%
|
4.2
|
Base Year for Operating Expenses:
|
Calendar year 2017
|
6.1
|
Use of Premises:
|
General office and production use consistent with the operation of a first-class office building in the Sherman Oaks area
|
16.1
|
Tenant’s Notice and Billing Address:
|
|
|
Before the Commencement Date:
|
1901 Avenue of the Stars, Suite 1200
Los Angeles, California 90067 |
|
After the Commencement Date and Tenant’s Billing Address:
|
15301 Ventura Boulevard, Suites 410
Sherman Oaks, California 91403 |
|
Contact:
|
Ms. Jill Calcaterra, Chief Marketing Officer
|
|
Landlord’s Address for Notices:
|
Douglas Emmett 2016, LLC
c/o Douglas Emmett Management, LLC Director of Property Management 808 Wilshire Boulevard, Suite 200 Santa Monica, California 90401 |
20.5
|
Brokers:
|
Douglas Emmett Management, Inc.
808 Wilshire Boulevard, Suite 200 Santa Monica, California 90401 and LA Realty Partners 2029 Century Park East, Suite 515 Los Angeles, California 90067 |
21.1
|
Parking Permits:
|
Tenant shall purchase thirty-one (31) permits for unreserved parking spaces and two (2) permits for reserved space on a “must take” basis. In addition, Tenant shall have the right, but not the obligation, to purchase twenty-three (23) additional permits for unreserved parking spaces.
The monthly parking rates at the Building effective as of February 1, 2017 are as follows:
Unreserved Phase I Parking Permit: $210.00 each
Unreserved Phase II Parking Permit: $170.00 each
Single Reserved Permit: $275.00 each
Tandem Reserved: $330.00 each (2 spaces at $165 each)
|
ARTICLE 1
|
DEMISE OF PREMISES 2
|
Section 1.1
|
Demise 2
|
Section 1.2
|
Tenant’s Non-Exclusive Use 3
|
Section 1.3
|
Landlord’s Reservation of Rights 3
|
Section 1.4
|
Area 5
|
Section 1.5
|
Quiet Enjoyment 5
|
Section 1.6
|
No Light, Air or View Easement 5
|
Section 1.7
|
Development of the Project 5
|
ARTICLE 2
|
COMMENCEMENT DATE AND TERM 6
|
Section 2.1
|
Commencement Date and Term 6
|
Section 2.2
|
Holding Over 7
|
ARTICLE 3
|
PAYMENT OF RENT, LATE CHARGE 8
|
Section 3.1
|
Payment of Fixed Monthly Rent and Additional Rent 8
|
Section 3.2
|
Manner of Payment 8
|
Section 3.3
|
Fixed Monthly Rent 8
|
Section 3.4
|
Tenant’s Payment of Certain Taxes 9
|
Section 3.5
|
Certain Adjustments 10
|
Section 3.6
|
Late Charge and Interest 10
|
Section 3.7
|
Security Deposit 11
|
ARTICLE 4
|
ADDITIONAL RENT 12
|
Section 4.1
|
Certain Definitions 12
|
Section 4.2
|
Calculation of Tenant’s Share of Increases in Operating Expenses 18
|
Section 4.3
|
Tenant’s Payment of Direct Charges as Additional Rent 20
|
Section 4.4
|
Allocation of Operating Expenses 20
|
ARTICLE 5
|
ETHICS 20
|
Section 5.1
|
Ethics 20
|
ARTICLE 6
|
USE OF PREMISES 20
|
Section 6.1
|
Use 20
|
Section 6.2
|
Exclusive Use 21
|
Section 6.3
|
Rules and Regulations 21
|
ARTICLE 7
|
CONDITION UPON VACATING & REMOVAL OF PROPERTY 22
|
Section 7.1
|
Condition upon Vacating 22
|
Section 7.2
|
Tenant’s Property 22
|
ARTICLE 8
|
UTILITIES AND SERVICES 23
|
Section 8.1
|
Normal Building Hours / Holidays 23
|
Section 8.2
|
Access to the Building and General Services 23
|
Section 8.3
|
Janitorial Services 23
|
Section 8.4
|
Security Services 23
|
Section 8.5
|
Utilities 24
|
Section 8.6
|
After Hours HVAC and/or Excess Utility Usage 24
|
Section 8.7
|
Changes Affecting HVAC 25
|
Section 8.8
|
Damaged or Defective Systems 25
|
Section 8.9
|
Limitation on Landlord’s Liability for Failure to Provide Utilities and/or Services 26
|
Section 8.10
|
Tenant Provided Services 27
|
ARTICLE 9
|
TENANT’S INDEMNIFICATION AND LIMITATION ON LANDLORD’S LIABILITY 27
|
Section 9.1
|
Tenant’s Indemnification and Hold Harmless 27
|
Section 9.2
|
Nullity of Tenant’s Indemnification in Event of Negligence 27
|
Section 9.3
|
Tenant’s Waiver of Liability 28
|
Section 9.4
|
Limitation of Landlord’s Liability 28
|
Section 9.5
|
Transfer of Landlord’s Liability 28
|
Section 9.6
|
Landlord’s Indemnification 28
|
ARTICLE 10
|
COMPLIANCE WITH LAWS 29
|
Section 10.1
|
Tenant’s Compliance with Laws 29
|
Section 10.2
|
Tenant to Comply at Sole Expense 29
|
Section 10.3
|
Conclusive Evidence of Violation 29
|
Section 10.4
|
Landlord’s Compliance 29
|
ARTICLE 11
|
ASSIGNMENT AND SUBLETTING 29
|
Section 11.1
|
Permission Required for Assignment or Sublet 29
|
Section 11.2
|
Voluntary Assignment due to Changes in Structure of Tenant 30
|
Section 11.3
|
Request to Assign or Sublease 31
|
Section 11.4
|
Landlord’s Consent 31
|
Section 11.5
|
Reasonable Grounds for Denial of Assignment and/or Sublease 33
|
Section 11.6
|
Tenant’s Continued Obligation 34
|
Section 11.7
|
Tenant To Pay Landlord’s Costs 34
|
Section 11.8
|
Successors and Assigns 34
|
ARTICLE 12
|
MAINTENANCE, REPAIRS, DAMAGE, DESTRUCTION, RENOVATION AND/OR ALTERATION 35
|
Section 12.1
|
Tenant’s Obligation to Maintain 35
|
Section 12.2
|
Repair Period Notice 35
|
Section 12.3
|
Landlord’s Option to Terminate or Repair 36
|
Section 12.4
|
Tenant’s Option to Terminate 37
|
Section 12.5
|
Temporary Space and/or Rent Abatement During Repairs or Renovation 37
|
Section 12.6
|
Tenant’s Waiver of Consequential Damages 38
|
Section 12.7
|
Repair Of The Premises When Casualty Not Caused By Tenant 38
|
Section 12.8
|
Waiver 38
|
Section 12.9
|
Repair of the Building 39
|
Section 12.10
|
Government-Required Repairs 39
|
Section 12.11
|
Optional Landlord Renovation 39
|
Section 12.12
|
Optional Tenant Changes During the Term 40
|
Section 12.13
|
Express Agreement 41
|
ARTICLE 13
|
CONDEMNATION 42
|
Section 13.1
|
Condemnation of the Premises 42
|
Section 13.2
|
Condemnation of the Building 42
|
Section 13.3
|
Award 42
|
Section 13.4
|
Condemnation for a Limited Period 43
|
ARTICLE 14
|
MORTGAGE SUBORDINATION; ATTORNMENT AND MODIFICATION OF LEASE 43
|
Section 14.1
|
Subordination 43
|
Section 14.2
|
Attornment 44
|
Section 14.3
|
Modification of Lease; Notice of Default 44
|
ARTICLE 15
|
ESTOPPEL CERTIFICATES 44
|
Section 15.1
|
Estoppel Certificates 44
|
ARTICLE 16
|
NOTICES 45
|
Section 16.1
|
Notices 45
|
ARTICLE 17
|
DEFAULT AND LANDLORD’S OPTION TO CURE 45
|
Section 17.1
|
Tenant’s Default 45
|
Section 17.2
|
Landlord’s Option to Cure Tenant’s Default 47
|
Section 17.3
|
Landlord’s Option to Terminate this Lease 48
|
Section 17.4
|
Certain Payments 48
|
Section 17.5
|
Certain Waivers 48
|
Section 17.6
|
Landlord Default 48
|
ARTICLE 18
|
DAMAGES; REMEDIES; RE-ENTRY BY LANDLORD; ETC. 49
|
Section 18.1
|
Damages 49
|
Section 18.2
|
Computations: The “worth at the time of award” is computed: 49
|
Section 18.3
|
Re-Entry by Landlord 50
|
Section 18.4
|
Certain Waivers 51
|
Section 18.5
|
Cumulative Remedies 51
|
ARTICLE 19
|
INSURANCE 51
|
Section 19.1
|
Landlord Obligations 51
|
Section 19.2
|
Tenant Obligations 52
|
Section 19.3
|
Compliance with Building Insurance Requirements 54
|
Section 19.4
|
Mutual Waiver of Subrogation 54
|
Section 19.5
|
Failure to Secure 55
|
ARTICLE 20
|
MISCELLANEOUS 55
|
Section 20.1
|
Entire Agreement 55
|
Section 20.2
|
No Waiver or Modification 55
|
Section 20.3
|
Time of the Essence 56
|
Section 20.4
|
Force Majeure 56
|
Section 20.5
|
Broker 56
|
Section 20.6
|
Governing Law 56
|
Section 20.7
|
Submission of Lease 56
|
Section 20.8
|
Captions 57
|
Section 20.9
|
Singular and Plural, Etc 57
|
Section 20.10
|
Independent Covenants 57
|
Section 20.11
|
Severability 57
|
Section 20.12
|
Warranty of Authority 57
|
Section 20.13
|
No Representations or Warranties 57
|
Section 20.14
|
No Joint Venture or Partnership 58
|
Section 20.15
|
Tenant’s Obligations At Its Sole Expense 58
|
Section 20.16
|
Attorneys’ Fees 58
|
Section 20.17
|
Intentionally deleted 58
|
Section 20.18
|
No Merger 58
|
Section 20.19
|
Prohibition Against Recording 58
|
Section 20.20
|
Hazardous Waste 58
|
Section 20.21
|
Transportation Management 58
|
Section 20.22
|
Signage 59
|
Section 20.23
|
Intentionally Deleted 60
|
Section 20.24
|
Confidentiality 60
|
Section 20.25
|
Intentionally Deleted 60
|
Section 20.26
|
Landlord’s Right to Perform Tenant’s Obligations 60
|
Section 20.27
|
Civil Code Section 1938 Disclosure 60
|
ARTICLE 21
|
PARKING 60
|
Section 21.1
|
Parking 60
|
ARTICLE 22
|
CONTINGENCY TO EFFECTIVENESS 61
|
Period
|
Rent
|
March 31, 2017 through March 31, 2018
|
$38,853.30
|
April 1, 2018 through March 31, 2019
|
$40,018.90
|
April 1, 2019 through March 31, 2020
|
$41,619.65
|
April 1, 2020 through March 31, 2021
|
$43,700.64
|
April 1, 2021 through March 31, 2022
|
$45,885.67
|
LANDLORD:
DOUGLAS EMMETT 2016, LLC,
a Delaware limited liability company
By: Douglas Emmett Management, Inc., a Delaware corporation, its Manager
By:
/s/ Andrew B. Goodman
Andrew B. Goodman
Senior Vice President
Dated:
1/6/17
|
TENANT:
CINEDIGM CORP.,
a Delaware corporation
By:
/s/ Gary S. Loffredo
Name:
Gary S. Loffredo
Title:
SVP
Dated:
1/5/17
By:
Name:
Title:
Dated:
|
a)
|
Tenant’s proposed Contractor and the Contractor’s proposed subcontractors and suppliers shall be approved in writing by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed. As a condition of such approval, so long as the same are reasonably cost competitive, then Contractor shall use Landlord’s Heating, Venting, and Air-conditioning, plumbing, and electrical subcontractors for such work.
|
b)
|
During completion of any Tenant Change, neither Tenant or Contractor shall permit any subcontractors, workmen, laborers, material or equipment to come into or upon the Building if the use thereof, in Landlord’s reasonable judgment, would violate Landlord’s agreement with any union providing work, labor or services in or about the Building or disturb labor harmony with the workforce or trades engaged in performing other work, labor or services in or about the Building or the Common Areas. If any violation, disturbance, interference or conflict occurs, Tenant, upon demand by Landlord, shall promptly cause all contractors or subcontractors or all materials causing the violation, disturbance, interference, difficulty or conflict, to leave or be removed from the Building or the Common Areas..
|
c)
|
Contractor shall submit to Landlord and Tenant a written bid for completion of the Tenant Change. Said bid shall include Contractor’s overhead, profit, and fees, and, if the proposed Tenant Change is for cosmetic work in excess of $100,000.00 in aggregate value per occurrence or for structural work of any kind, Contractor shall, upon completion of said Tenant Change, pay an administrative fee to Landlord’s managing agent for supervision of said Tenant Change equal to three percent (3%) of the total cost of the Tenant Change, to defray said agent’s costs for supervision of the construction.
|
d)
|
Tenant’s Contractor shall execute the Agreement attached hereto as Schedule 1.
|
a)
|
Contractors to notify the management office for the Building prior to starting any work. All jobs must be scheduled by the general contractor or sub-contractor when no general contractor is being used.
|
b)
|
The general contractor is to provide the Building Manager with a copy of the projected work schedule for the suite, prior to the start of construction.
|
c)
|
Contractor will make sure that at least one set of drawings will have the Building Manager’s initials approving the plans and a copy delivered to the Building Office.
|
d)
|
As-built construction, including mechanical drawings and air balancing reports will be submitted at the end of each project.
|
e)
|
The HVAC contractor is to provide the following items to the Building Manager upon being awarded the contract from the general contractor:
|
i)
|
A plan showing the new ducting layout, all supply and return air grille locations and all thermostat locations. The plan sheet should also include the location of any fire dampers.
|
ii)
|
An Air Balance Report reflecting the supply air capacity throughout the suite, which is to be given to the Chief Building Engineer at the finish of the HVAC installation.
|
f)
|
All paint bids should reflect a one-time touch-up paint on all suites. This is to be completed approximately five (5) days after move-in date.
|
g)
|
The general contractor must provide for the removal of all trash and debris arising during the course of construction. At no time are the buildings trash compactors and/or dumpsters to be used by the general contractor’s clean-up crews for the disposal of any trash or debris accumulated during construction. The Building Office assumes no responsibility for bins. Contractor is to monitor and resolve any problems with bin usage without involving the Building Office. Bins are to be emptied on a regular basis and never allowed to overflow. Trash is to be placed in the bin.
|
h)
|
Contractors will include in their proposals all costs to include: parking, elevator service, additional security (if required), restoration of carpets, etc. Parking will be validated only if contractor is working directly for the Building Office.
|
i)
|
Any problems with construction per the plan, will be brought to the attention of and documented to the Building Manager. Any changes that need additional work not described in the bid will be approved in writing by the Building Manager. All contractors doing work
|
a)
|
All deliveries of material will be made through the parking lot entrance.
|
b)
|
Construction materials and equipment will not be stored in any area without prior approval of the Building Manager.
|
c)
|
Only the freight elevator is to be used by construction personnel and equipment. Under no circumstances are construction personnel with materials and/or tools to use the “passenger” elevators.
|
a)
|
Suite entrance doors are to remain closed at all times, except when hauling or delivering construction materials.
|
b)
|
All construction done on the property that requires the use of lobbies or Common Area corridors will have carpet or other floor protection. The following are the only prescribed methods allowed:
|
i)
|
Mylar: Extra heavy-duty to be taped from the freight elevator to the suite under construction.
|
ii)
|
Masonite: 1/4 inch Panel, Taped to floor and adjoining areas. All corners, edges and joints to have adequate anchoring to provide safe and “trip-free” transitions. Materials to be extra heavy-duty and installed from freight elevator to the suite under construction.
|
c)
|
Restroom wash basins will not be used to fill buckets, make pastes, wash brushes, etc. If facilities are required, arrangements for utility closets will be made with the Building Office.
|
d)
|
Food and related lunch debris are not to be left in the suite under construction.
|
e)
|
All areas the general contractor or their sub-contractors work in must be kept clean. All suites the general contractor works in will have construction debris removed prior to completion inspection. This includes dusting of all window sills, light diffusers, cleaning of cabinets and sinks. All Common Areas are to be kept clean of building materials at all times so as to allow tenants access to their suites or the building.
|
a)
|
All Life and Safety and applicable Building Codes will be strictly enforced (i.e., tempered glass, fire dampers, exit signs, smoke detectors, alarms, etc.). Prior coordination with the Building Manager is required.
|
b)
|
Electric panel schedules must be brought up to date identifying all new circuits added.
|
c)
|
All electrical outlets and lighting circuits are to be properly identified. Outlets will be labeled on back side of each cover plate.
|
d)
|
All electrical and phone closets being used must have panels replaced and doors shut at the end of each day’s work. Any electrical closet that is opened with the panel exposed must have a work person present.
|
e)
|
All electricians, telephone personnel, etc. will, upon completion of their respective projects, pick up and discard their trash leaving the telephone and electrical rooms clean. If this is not complied with, a clean-up will be conducted by the building janitors and the general contractor will be back-charged for this service.
|
f)
|
Welding or burning with an open flame will not be done without prior approval of the Building Manager. Fire extinguishers must be on hand at all times.
|
g)
|
All “anchoring” of walls or supports to the concrete are not to be done during normal working hours (7:30 AM - 6:00 PM, Monday through Friday). This work must be scheduled before or after these hours during the week or on the weekend.
|
h)
|
All core drilling is not to be done during normal working hours (7:30 AM - 6:00 PM, Monday through Friday). This work must be scheduled before or after these hours during the week or on the weekend.
|
i)
|
All HVAC work must be inspected by the Building Engineer. The following procedures will be followed by the general contractor:
|
i)
|
A preliminary inspection of the HVAC work in progress will be scheduled through the Building Office prior to the reinstallation of the ceiling grid.
|
ii)
|
A second inspection of the HVAC operation will also be scheduled through the Building Office and will take place with the attendance of the HVAC contractor’s Air Balance Engineer. This inspection will take place when the suite in question is ready to be air-balanced.
|
iii)
|
The Building Engineer will inspect the construction on a periodic basis as well.
|
j)
|
All existing thermostats, ceiling tiles, lighting fixtures and air conditioning grilles shall be saved and turned over to the Building Engineer.
|
LANDLORD:
DOUGLAS EMMETT 2016, LLC,
a Delaware limited liability company
By: Douglas Emmett Management, Inc., a Delaware corporation, its Manager
By:
/s/ Andrew B. Goodman
Andrew B. Goodman
Senior Vice President
Dated:
1/6/17
|
TENANT:
CINEDIGM CORP.,
a Delaware corporation
By:
/s/ Gary S. Loffredo
Name:
Gary S. Loffredo
Title:
1/5/17
Dated:
By:
Name:
Title:
Dated:
|
1.
|
Contractor shall indemnify and hold harmless Owner and Manager and their respective affiliates, members, interest holders, managing members, officers, directors, partners,
|
2.
|
Contractor agrees after written demand to immediately cause the effect of any suit or lien to be removed from the Project and in the event Contractor shall fail to do so, Owner is authorized to use whatever means in its discretion it may deem appropriate to cause said lien or suit to be removed or dismissed and the costs thereof, together with attorneys’ fees shall be immediately due and payable by Contractor to Owner. In the event a suit is brought against any Landlord Party or if any Landlord Party is named as a defendant in any suit against Contractor or Tenant, Contractor shall, at the option of Owner in Owner’s sole discretion, defend the Landlord Parties with counsel selected by Contractor and acceptable to Owner, in Owner’s reasonable discretion. Contractor shall pay any and all costs and expenses in connection therewith as well as all additional costs and expenses incurred in such suit, including without limitation, professional fees such as expert fees, and/or appraisers’ and accountants’ fees, and will pay and satisfy any such claim, lien, or judgment as may be established by the decision of the court in such suit. Contractor may litigate any such lien or suit provided Contractor causes the effect thereof to be removed from the Project promptly in advance.
|
3.
|
Contractor shall promptly pay all indebtedness incurred in Contractor’s performance of the Work. Should any lien or charge attach to the Project by reason of Contractor’s failure to pay such indebtedness, Contractor shall promptly procure the release of any such lien or charge and shall indemnify, defend (with counsel reasonably approved by Owner) and hold the Landlord Parties harmless from all loss, cost damage or expense incidental thereto.
|
4.
|
If at any time there should be evidence of any lien or claim for which Owner or Manager is or might become liable, or for which the Project is, or might become subject to and which is chargeable to Contractor or any of its subcontractors, after allowing Contractor thirty (30) days to remove such lien, Owner or Manager shall have the right to retain out of any amounts due Contractor (as in for example, disbursements of any tenant improvement allowance), which shall be above and beyond any retention amounts, an amount sufficient to clear the lien or claim and completely indemnify the Landlord Parties against such lien or claim along with all associated costs, which shall in no way serve as an election of remedies by Owner or Manager. Contractor may obtain possession of the retained amount, provided that Contractor (a) posts a bond or other security in an amount sufficient to fully indemnify the Landlord Parties against the lien or claim, and (b) obtains Owner or Manager’s approval as to the adequacy and quality of the bond or security, which Owner or Manager shall not unreasonable withhold. The cost of any such bond shall be borne by Contractor.
|
5.
|
Contractor shall not take and is not authorized to take any action in the name of or otherwise on behalf of Owner or Manager which would violate any applicable law. If Contractor knowingly performs any Work or engages in any other activities contrary to applicable law, Contractor shall bear any and all additional costs resulting therefrom, including, but not limited to, the costs of correcting the Work or repairing the Project to comply with such law and the cost of fully indemnifying the Landlord Parties from all violations.
|
6.
|
Contractor shall immediately cause all Landlord Parties to be released from any liability or penalty which may be imposed on Contractor, its employees, agents or subcontractors by reason of any alleged violation or violations of applicable law by Contractor in performance of the Work.
|
7.
|
Contractor waives any right to consequential, special or indirect damages or loss of anticipated profits, except for acts of gross negligence or intentional misconduct by Owner or Manager. Notwithstanding anything else contained herein to the contrary, Contractor shall look solely to Owner’s interest in the Project and any proceeds from a sale of the Project that actually remain undistributed, for satisfaction of any liabilities or obligations of Owner under this Agreement. No Landlord Party shall be personally liable for any such liabilities or obligations whatsoever.
|
8.
|
If litigation is instituted between Owner and Contractor, the cause for which arises out of or in relation to this Agreement, the prevailing party in such litigation shall be entitled to receive its costs (not limited to court costs), expenses and reasonable attorneys’ fees from the non-prevailing party as the same may be awarded by the court.
|
A.
|
Tenant shall strictly comply with all posted speed limits, directional signs, yield signs, stops signs and all other signs within or about the parking facilities.
|
B.
|
Tenant shall register all vehicle license plate numbers with the Building management.
|
C.
|
Tenant shall be responsible for the cost of repairing any damage to the parking facilities or cleaning any debris created or left by Tenant, including, without limitation, oil leakage from motor vehicles parked in the parking facilities under its auspices.
|
D.
|
Landlord, in addition to reserving the right to designate one or more areas solely for visitor parking, which areas may be changed by Landlord from time to time with or without prior notice to Tenant, reserves the right to allocate additional visitor spaces on any floor of the parking facilities. Tenant shall not park any vehicles in any spaces designated as visitor only spaces or customer spaces within the parking facilities.
|
E.
|
Tenant shall strictly comply with all rules, regulations, ordinances, speed limits, and statutes affecting handicapped parking and/or access, and shall not park any vehicles within the fire lanes, along parking curbs or in striped areas.
|
F.
|
Tenant shall only use the number of parking permits allocated to it and shall not permit more than one of its employees to utilize the same parking permit. Landlord reserves the right to assign or reassign parking spaces within the Parking facilities to Tenant from time to time, and provided Landlord is required to do so by reason of any action arising out of a governmental mandate imposed on Landlord, Landlord further reserves the right at any time to substitute an equivalent number of parking spaces in a parking facilities or subterranean or surface parking facility within a reasonable distance of the Premises.
|
G.
|
Except with Landlord’s managing agent(s)’ prior written consent, Tenant shall not leave vehicles in the parking facilities overnight, nor park any vehicles in the parking facilities other than automobiles, motorcycles, motor-driven or non-motor-driven bicycles or four-wheeled trucks or vans. Landlord may, in its sole discretion, designate separate areas for bicycles and motorcycles. Tenant shall ensure that vehicles parking in the parking facilities by using the parking permits assigned to Tenant shall be parked entirely within the striped lines designating a single space and are not so situated or of such a width or length as to impede access to or egress from vehicles parked in adjacent areas or doors or loading docks. Further, all vehicles utilizing Tenant’s parking permits shall not be higher than any height limitation that may be posted, or of such a size, weight or dimension so that entry of such vehicle into the parking facilities would cause any damage or injury thereto.
|
H.
|
Tenant shall not allow any of the vehicles parked using Tenant’s permits, or the vehicles of any of Tenant’s suppliers, shippers, customers or invitees to be loaded or unloaded in any area other than those specifically designated by Landlord for loading.
|
I.
|
Tenant shall not use or occupy the parking facilities in any manner which will unreasonably interfere with the use of the parking facilities by other tenants or occupants of the Building. Without limitation, Tenant agrees to promptly turn off any vehicle alarm system activated and sounding an alarm in the parking facilities. In the event said alarm system fails to turn off and no longer sound an intruder alert fifteen (15) minutes after commencing such an alarm, Landlord shall reserve the right to remove the vehicle from the parking facilities at Tenant’s sole expense.
|
J.
|
Tenant acknowledges that the Rules and Regulations as posted herein shall be in effect twenty-four hours per day, seven days per week, without exception.
|
K.
|
Tenant acknowledges that the uniformed guard officers and parking attendants serving the parking facilities are authorized to issue verbal and written warnings of Tenant’s violations of any of the rules and regulations contained herein. Except in the case of a car alarm continuing to sound in excess of a maximum of fifteen (15) minutes, in which case no further notice by Landlord shall be required. If Tenant or Tenant’s agents, contractors, directors, employees, officers, partners or shareholders continue to materially breach these rules and regulations after expiration of written notice and the opportunity to cure has been given to Tenant, then in addition to such other remedies and request for injunctive relief it may have, Landlord shall have the right, without additional notice, to remove or tow away the vehicle involved and store the same, all costs of which shall be borne exclusively by Tenant and/or revoke Tenant’s parking privileges and rights under the Lease.
|
LANDLORD:
DOUGLAS EMMETT 2016, LLC,
a Delaware limited liability company
By: Douglas Emmett Management, Inc., a Delaware corporation, its Manager
By:
/s/ Andrew B. Goodman
Andrew B. Goodman
Senior Vice President
Dated:
1/6/17
|
TENANT:
CINEDIGM CORP.,
a Delaware corporation
By:
/s/ Gary S. Loffredo
Name:
Gary S. Loffredo
Title:
1/5/17
Dated:
By:
Name:
Title:
Dated:
|
1.
|
Desks
A
;
|
2.
|
Chairs
A
;
|
3.
|
Credenzas
A
;
|
4.
|
Conference room furniture
B
;
|
5.
|
Built-in cabinetry in attorney offices
A
;
|
6.
|
Built-in cabinetry in secretarial bays
A
;
|
7.
|
All phone and computer cabling
C
;
|
8.
|
Phone switch and related equipment and software including without limitation the following
D
:
|
*
|
Network Hardware
|
*
|
Core switch: WS-C4506
|
*
|
Router: CISCO2811-V/K9
|
*
|
Router: CISCO2811 Q17245961
|
*
|
Phone system;
|
*
|
Voice GW: CISCO2811-SEC/K9 Q
|
*
|
Cisco CallManager: MCS-7825-H3-ECS1 System version: 6.1.3.1000-16
|
*
|
Cisco CallManager: MCS7816113-K9-CMB2 System version: 6.1.3.1000-16
|
*
|
Cisco Unity: MCS7816H3-K9-CMB2 Cisco Unity 5.0 Build 5.0(1)
|
*
|
Phones: Cisco IP Phones 7960
|
9.
|
Printers: HP LaserJet Printers and HP MFPs
E
|
10.
|
Refrigerators
|
A.
|
Landlord’s property located in the Premises.
|
B.
|
Chairs owned by Cinedigm; tables will remain in the Premises.
|
C.
|
Equipment is in storage; Cat 5 data cabling is in the Premises.
|
D.
|
In storage.
|
E.
|
Cinedigm to identify which equipment they have replaced at their cost, others are in storage
|
1.
|
Desks
A
;
|
2.
|
Chairs
A
;
|
3.
|
Credenzas
A
;
|
4.
|
Conference room furniture
B
;
|
5.
|
Built-in cabinetry in attorney offices
A
;
|
6.
|
Built-in cabinetry in secretarial bays
A
;
|
7.
|
All phone and computer cabling
C
;
|
8.
|
Phone switch and related equipment and software including without limitation the following
D
:
|
*
|
Network Hardware
|
*
|
Core switch: WS-C4506
|
*
|
Router: CISCO2811-V/K9
|
*
|
Router: CISCO2811 Q17245961
|
*
|
Phone system;
|
*
|
Voice GW: CISCO2811-SEC/K9 Q
|
*
|
Cisco CallManager: MCS-7825-H3-ECS1 System version: 6.1.3.1000-16
|
*
|
Cisco CallManager: MCS7816113-K9-CMB2 System version: 6.1.3.1000-16
|
*
|
Cisco Unity: MCS7816H3-K9-CMB2 Cisco Unity 5.0 Build 5.0(1)
|
*
|
Phones: Cisco IP Phones 7960
|
9.
|
Refrigerators in main kitchen
|
A.
|
Landlord’s property located in the Premises.
|
B.
|
Chairs owned by Cinedigm (except for the Aeron chairs, which will be removed from the Premises); tables will remain in the Premises.
|
C.
|
Equipment is in storage; Cat 5 data cabling is in the Premises.
|
D.
|
In storage.
|
1.
|
I have reviewed this Form 10-K of Cinedigm Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
Date:
|
June 29, 2017
|
|
By:
|
/s/ Christopher J. McGurk
|
|
|
|
|
Christopher J. McGurk
Chief Executive Officer and Chairman of the Board of Directors
(Principal Executive Officer)
|
1.
|
I have reviewed this Form 10-K of Cinedigm Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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5.
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The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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Date:
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June 29, 2017
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By:
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/s/ Jeffrey S. Edell
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Jeffrey S. Edell
Chief Financial Officer (Principal Financial Officer)
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
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Date:
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June 29, 2017
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By:
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/s/ Christopher J. McGurk
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Christopher J. McGurk
Chief Executive Officer and Chairman of the Board of Directors
(Principal Executive Officer)
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
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Date:
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June 29, 2017
|
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By:
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/s/ Jeffrey S. Edell
|
|
|
|
|
Jeffrey S. Edell
Chief Financial Officer (Principal Financial Officer)
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