EXHIBIT 10.1
AMENDED AND RESTATED LOAN, GUARANTY AND SECURITY AGREEMENT
This AMENDED AND RESTATED LOAN, GUARANTY AND SECURITY AGREEMENT (this “Agreement”) is entered into as of September 15, 2022, by and among East West Bank (“Bank”), Cinedigm Corp., a Delaware corporation (“Borrower’’), Vistachiara Productions Inc., d/b/a The Bigger Picture, a Delaware corporation (“Vistachiara Productions”), Cinedigm Entertainment Corp., a New York corporation (“Cinedigm Entertainment”), Cinedigm Entertainment Holdings, LLC, a Delaware limited liability company (“Cinedigm Entertainment Holdings”), Cinedigm Home Entertainment, LLC, a Delaware limited liability company (“Cinedigm Home Entertainment”), Docurama, LLC, a Delaware limited liability company (“Docurama”), Dove Family Channel, LLC, a Delaware limited liability company (“Dove”), Cinedigm OTT Holdings, LLC, a Delaware limited liability company (“Cinedigm OTT”), Cinedigm Productions, LLC, a Delaware limited liability company (“Cinedigm Productions”), Cinedigm DC Holdings, LLC, a Delaware limited liability company (“Cinedigm DC Holdings”), Access Digital Media, Inc., a Delaware corporation (“Access Digital Media”), Christie/AIX, Inc., a Delaware corporation (“Christie/AIX”), Cinedigm Digital Funding I, LLC, a Delaware limited liability company (“Cinedigm Digital Funding I”), FoundationTV, Inc., a Delaware corporation (“FoundationTV”), Asian Media Rights LLC, d/b/a Digital Media Rights, a New York limited liability company (“Asian Media Rights”), Con TV, LLC, a Delaware limited liability company (“Con TV”), Fandor Acquisition LLC, a Delaware limited liability company (“Fandor”), TFD Acquisition LLC, a Delaware limited liability company (“TFD Acquisition”), Screambox Acquisition LLC, a Delaware limited liability company (“Screambox Acquisition”), Bloody Disgusting Acquisition LLC, a Delaware limited liability company (“Bloody Disgusting Acquisition”), Comic Blitz II LLC, a Delaware limited liability company (“Comic Blitz II”), Viewster, LLC, a Delaware limited liability company (“Viewster”), and Cinedigm India Private Limited, an Indian limited company (“Cinedigm India”, and, together with Vistachiara Productions, Cinedigm Entertainment, Cinedigm Entertainment Holdings, Cinedigm Home Entertainment, Docurama, Dove, and Cinedigm OTT, Cinedigm Productions, Cinedigm DC Holdings, Access Digital Media, Christie/AIX, Cinedigm Digital Funding I, FoundationTV, Asian Media Rights, Con TV, Fandor, TFD Acquisition, Screambox Acquisition, Bloody Disgusting Acquisition, Comic Blitz II and Viewster, individually and collectively, the “Guarantor’’ and, together with the Borrower, collectively, the “Loan Parties”).
RECITALS
Borrower, certain of the Guarantors party hereto and Bank have entered into that certain Loan, Guaranty and Security Agreement dated as of March 30, 2018 (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the “Prior Loan Agreement”).
Borrower has requested that Bank amend and restate the Prior Loan Agreement to, among other things, make additional Advances to Borrower.
Bank is willing to amend and restate the Prior Loan Agreement subject to the terms and conditions of this Agreement.
This Agreement sets forth the terms on which Bank will advance credit to Borrower, and Borrower will repay the amounts owing to Bank.
In consideration of the agreement of Bank to make the Advances to Borrower, each Guarantor is willing to guaranty the full payment and performance by Borrower of all of its obligations hereunder and under the other Loan Documents, all as further set forth herein.
Each Guarantor is a subsidiary of Borrower and will obtain substantial direct and indirect benefit from the Advances made by Bank to Borrower under the Loan Agreement.
AGREEMENT
The parties agree as follows:
Each Loan Party represents and warrants as follows:
Borrower and each other Loan Party covenants that, until payment in full of all outstanding Obligations, and for so long as Bank may have any commitment to make a Credit Extension hereunder, Borrower shall do all of the following:
Borrower may deliver to Bank on an electronic basis any certificates, reports or information required pursuant to this Section 9.2, and Bank shall be entitled to rely on the information contained in the electronic files, provided that Bank in good faith believes that the files were delivered by a Responsible Officer. If Borrower delivers this information electronically, it shall also deliver to Bank by U.S. Mail, reputable overnight courier service, hand delivery, facsimile or .pdf file within five (5) Business Days of submission of the unsigned electronic copy the certification of monthly financial statements, the Borrowing Base Certificate and the Compliance Certificate, each bearing the physical signature of the Responsible Officer.
Borrower and each other Loan Party covenants and agrees that, so long as any credit hereunder shall be available and until the outstanding Obligations are paid in full or for so long as Bank may have any commitment to make any Credit Extensions, Borrower and each such Loan Party will not do any of the following without Bank’s prior written consent, which shall not be unreasonably withheld, conditioned or delayed:
Any one or more of the following events shall constitute an “Event of Default” by Borrower under this Agreement:
Bank may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.
Effective only upon the occurrence and during the continuance of an Event of Default, Borrower hereby irrevocably appoints Bank (and any of Bank’s designated officers, or employees) as Borrower’s true and lawful attorney to: (a) send requests for verification of Accounts or notify account debtors of Bank’s security interest in the Accounts; (b) endorse Borrower’s name on any checks or other forms of payment or security that may come into Bank’s possession; (c) sign Borrower’s name on any invoice or bill of lading relating to any Account, drafts against account debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to account debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all claims under and decisions with respect to Borrower’s policies of insurance; (f) settle and adjust disputes and claims respecting the accounts directly with account debtors, for amounts and upon terms which Bank determines to be reasonable; and (g) file, in its sole discretion, one or more financing or continuation statements and amendments thereto, relative to any of the Collateral without the signature of Borrower
where permitted by law; provided Bank may exercise such power of attorney to sign the name of Borrower on any of the documents described in clause (g) above, regardless of whether an Event of Default has occurred. The appointment of Bank as Borrower’s attorney in fact, and each and every one of Bank’s rights and powers, being coupled with an interest, is irrevocable until all of the Obligations have been fully repaid and performed and Bank’s obligation to provide advances hereunder is terminated.
Unless otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement or any other agreement entered into in connection herewith shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by a nationally recognized overnight delivery service, certified mail, postage
prepaid, return receipt requested, or by telefacsimile to Borrower or to Bank, as the case may be, at its addresses set forth below:
If to Borrower or Guarantor: Cinedigm Corp.
244 Fifth Avenue, Suite M289
New York, NY 10001
Attn: Chris McGurk, Chairman and Chief Executive Officer
With a copy to: Cinedigm Corp.
244 Fifth Avenue, Suite M289
New York, NY 10001
Attn: Gary S. Loffredo, Esq., President Digital Cinema & General Counsel
If to Bank: East West Bank
9378 Wilshire Blvd., Ste 100
Beverly Hills, CA 90212
Attn: Jeffrey Zaks
With a copy to: Paul Hastings LLP
1999 Avenue of the Stars, 27th Floor
Los Angeles, CA 90067
Attn: Susan Z. Williams
The parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other.
California law governs the Loan Documents without regard to principles of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in Los Angeles County, California; provided, however, that nothing in this Agreement shall be deemed to operate to preclude Bank from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court order in favor of Bank. Each party expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Each party hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to it at the address set forth in, or subsequently provided by it in accordance with, Section 13 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of such party’s actual receipt thereof or five (5) Business Days after deposit in the U.S. mails, proper first class postage prepaid.
IF AND ONLY TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IF PERMITTED BY APPLICABLE LAW, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or
controversies of any nature between them arising at any time shall be decided by a reference to a private judge, who is a former or retired judge of any California Federal or State Court, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638, sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive. The private judge shall have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential and all records relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the Santa Clara County, California Superior Court for such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings. The parties shall be entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings. The private judge shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in the same manner as a trial court judge. The parties agree that the selected or appointed private judge shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to California Code of Civil Procedure § 644(a). Either party shall have the right to object to the decision of the private judge and to appeal as provided for in the California Code of Civil Procedure. Nothing in this paragraph shall limit the right of any party at any time to exercise self-help remedies, foreclose against collateral, or obtain provisional remedies. The private judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.
BORROWER: Cinedigm Corp. By: /s/ Gary S. Loffredo General Counsel and Secretary GUARANTOR: Vistachiara Productions Inc. By: /s/ Gary S. Loffredo Cinedigm Entertainment Corp. By: /s/ Gary S. Loffredo Cinedigm Entertainment Holdings, LLC By: /s/ Gary S. Loffredo | BANK: East West Bank: By: /s/ Jeffrey Zaks |
Cinedigm Entertainment, LLC
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: Secretary
Cinedigm Home Entertainment, LLC
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: Secretary
Docurama, LLC
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: Senior Vice President & Secretary
Dove Family Channel, LLC
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: Senior Vice President & Secretary
Cinedigm OTT Holdings, LLC
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: Senior Vice President & Secretary
Cinedigm Productions, LLC
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: Senior Vice President & Secretary
Cinedigm DC Holdings, LLC
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: President
Access Digital Media, Inc.
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: President
Christie/AIX, Inc.
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: President
Cinedigm Digital Funding I, LLC
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: President
FoundationTV, Inc.
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: President
Asian Media Rights, LLC, d/b/a Digital Media Rights
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: Chief Operating Officer, General
Counsel and Secretary
Con TV, LLC
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: Secretary
Fandor Acquisition LLC
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: President
TFD Acquisition LLC
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: Chief Operating Officer & Secretary
Screambox Acquisition LLC
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: Chief Operating Officer & Secretary
Bloody Disgusting Acquisition LLC
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: Chief Operating Officer & Secretary
Comic Blitz II LLC
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: Senior Vice President & Secretary
Viewster, LLC
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title: Chief Operating Officer
Cinedigm India Private Limited
By: /s/ Gary S. Loffredo
Name: Gary S. Loffredo
Title:
EXHIBIT A
DEFINITIONS
“Accounts” means all presently existing and hereafter arising “accounts,” as such term is defined in Section 9102 of the Code, contract rights, instruments (including those evidencing indebtedness owed to Borrower by its affiliates), general intangibles, payment intangibles, chattel paper (including electronic chattel paper) and all other forms of obligations owing to Borrower arising out of the sale or lease of goods or inventory (including, without limitation, the licensing of digital content, software and other technology) or the rendering of services by Borrower and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by Borrower and Borrower’s Books relating to any of the foregoing.
“Advance” or “Advances” means a cash advance or cash advances under the Revolving Line.
“Affiliate” means, with respect to any Person, any Person that owns or controls directly or indirectly such Person, any Person that controls or is controlled by or is under common control with such Person.
“Bank Expenses” means all reasonable out-of-pocket costs or expenses (including reasonable attorneys’ fees and expenses) incurred in connection with the preparation, negotiation, administration, amendment, and enforcement of the Loan Documents; reasonable out-of-pocket Collateral audit fees; and Bank’s reasonable attorneys’ fees and expenses (whether generated in-house or by outside counsel) incurred in enforcing or defending the Loan Documents (including fees and expenses of appeal), incurred before, during and after an Insolvency Proceeding, whether or not suit is brought.
“Borrower State” means Delaware, the state under whose laws Borrower is organized.
“Borrower’s Books” means all of Borrower’s books and records including: ledgers; records concerning Borrower’s assets or liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the equipment, containing such information.
“Borrowing Base” means, at any date for which the amount thereof is to be determined, an amount equal to the lesser of:
“Business Day” means any day that is not a Saturday, Sunday, or other day on which banks in the State of California or the State of New York are authorized or required to close.
“Cash” means Unrestricted Cash and Cash Equivalents that are not subject to any Lien other than Lien under the Loan Documents.
“Cash Equivalents” means (a) any readily-marketable securities (i) issued by, or directly, unconditionally and fully guaranteed or insured by the United States federal government or (ii) issued by any agency of the United States federal government the obligations of which are fully backed by the full faith and credit of the United States federal government, (b) any readily-marketable direct obligations issued by any other agency of the United States federal government, any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case having a rating of at least “A-1” from S&P or at least “P-1” from Moody’s, (c) any commercial paper rated at least “A-1” by S&P or “P-1” by Moody’s and
issued by any Person organized under the laws of any state of the United States, (d) any Dollar-denominated time deposit, certificate of deposit, overnight bank deposit or bankers’ acceptance issued or accepted by Bank or any commercial bank that is, in each case, rated investment grade by both S&P and Moody’s, (e) interests in any money market fund registered under the Investment Company Act of 1940 that (i) has substantially all of its assets invested continuously in the types of investments referred to in clause (a), (b), (c) or (d) above with maturities as set forth in the proviso below, (ii) has net assets in excess of $500,000,000 and (iii) has obtained from either S&P or Moody’s the highest rating obtainable for money market funds in the United States, and (f) other cash equivalents determined by the Bank to have a risk equivalent to items rated at least “A-1” by S&P or “P-1” by Moody’s and otherwise acceptable from time to time to the Bank; provided, however, that the maturities of all obligations specified in any of clauses (a) through (d) above shall not exceed 365 days.
“Change in Control” means any event or circumstance whereby (a) any person or group of persons acting in concert acquires control of Borrower (whether directly or indirectly); or (b) the majority of the seats (other than vacant seats) on the Board of Directors of Borrower cease to be occupied by persons who either (i) were members of the Board of Directors of Borrower as of the closing of the transactions contemplated hereby or (ii) were nominated for election by the Board of Directors of Borrower, a majority of whom were directors on the Closing Date or whose election or nomination for election was previously approved by a majority of such directors. For the purpose of this definition, “control” of Borrower means: (x) the acquisition of ownership, directly or indirectly, beneficially or of record, by any person or group (within the meaning of the Securities Exchange Act of 1934, as amended, and the rules of the United States Securities and Exchange Commission thereunder as in effect on the date of the Closing) of stock representing 35% or more of the aggregate ordinary voting power represented by the issued and outstanding stock in Borrower; (y) the power to appoint or remove all or a majority of the members of the board of directors of Borrower or (z) otherwise directly or indirectly to direct or have the power to direct the affairs and policies of Borrower.
“Change in Management” means both Chris McGurk and Gary Loffredo shall cease to perform the functions and services substantially similar to those provided for Borrower as of the Closing Date and a replacement of at least one such individual proposed by Borrower and acceptable to Bank (such approval not to be unreasonably withheld) has not been retained within a period of one hundred twenty (120) days following the last day that such individual shall have ceased to serve in such capacity or to perform such functions and services as aforesaid. The parties hereto agree that during such one hundred twenty (120) day period until such time as a replacement has been approved by Bank, Bank shall not be required to make any Advances. The Bank and the Loan Parties agree that nothing herein shall preclude the board of directors of Borrower from performing its legal or fiduciary duties with respect to the employment of Chris McGurk or Gary Loffredo under applicable law.
“Chief Executive Office State” means California, where Borrower’s chief executive office is located.
“Closing Date” means the date of this Agreement.
“Code” means the California Uniform Commercial Code as amended or supplemented from time to time.
“Collateral” means the property described on Exhibit B attached hereto except (i) to the extent the granting of a security interest therein is contrary to applicable law, provided that upon the cessation of any such restriction or prohibition, such property shall automatically become part of the Collateral; provided that in no case shall the definition of “Collateral” exclude any Accounts, proceeds of the disposition of any property, or general intangibles consisting of rights to payment, (ii) any leasehold property worth less than $1,000,000 in the aggregate, (iii) any motor vehicles and other assets subject to certificates of title, except to the extent perfection of a security interest therein may be accomplished by the filing of UCC financing statements or an equivalent thereof in appropriate form in the applicable jurisdiction, (iv) any commercial tort claim as to which the claim thereunder is less than $1,000,000, (v) any property if, for so long as and to the extent a security interest may not be granted in such assets as a matter of applicable law or without constituting a material breach of the terms of a lease, license, contract or other agreement or instrument or permitting any party to terminate such lease, license, contract, or other agreement or instrument, except, in each case under this clause (v) to the extent that such law or the terms in such lease, license, contract or other
agreement or instrument providing for such prohibition, breach, right of termination or default or requiring such consent, approval, license or authorization is ineffective under the UCC or other applicable law or principles of equity, provided further that this clause (v) shall not exclude proceeds thereof and Accounts arising therefrom the assignment of which is deemed effective under the UCC, (vi) any governmental licenses or permits or franchises, charters and authorizations of a Governmental Authority if, for so long as and to the extent the grant of a security interest therein is prohibited or restricted by applicable law, except, in each case under this clause (vii), to the extent that such prohibition or restriction is ineffective under the UCC or other applicable law or principles of equity, provided that this clause (vi) shall not exclude proceeds thereof and Accounts arising therefrom the assignment of which is deemed effective under the UCC, (vii) equity interests in any Excluded Subsidiary, (viii) any “intent to use” trademark application for which a statement of use has not been filed with the United States Patent and Trademark Office, but only to the extent that the grant of a security interest therein would invalidate such trademark application, (ix) any letter-of-credit rights (except to the extent constituting a supporting obligation of other Collateral as to which perfection of a security interest therein may be accomplished solely by the filing of a UCC financing statement in the applicable jurisdiction (it being understood that no actions shall be required to perfect a security interest in letter-of-credit rights, other than the filing of a UCC financing statement), (x) any equity interest in a first-tier foreign Subsidiary in excess of 65% of the issued and outstanding voting stock of any first-tier foreign Subsidiary of any Loan Party, (xi) any assets of a first-tier foreign Subsidiary; and (xii) Excluded Accounts.
“Collateral State” means the state or states where the Collateral is located.
“Collection Account” has the meaning set forth in Section 4.4.
“Consolidated Net Content Advances” means, with respect to the Borrower and its Subsidiaries on a consolidated basis as of any date of determination, the sum, without duplication, of (a) production costs capitalized during such period, net of capitalized production costs charged to income during such period, (b) advertising costs deferred during such period, net of deferred advertising costs charged to income during such period, (c) the net cash flow impact of advance payments made with respect to Distributed and Licensed Content pursuant to distribution agreements during such period, (d) advances or purchase consideration made to acquire feature films or other items of content for distribution as Owned Library Content, net of advances amortized and charged to income during such period, in each case as reported in Consolidated cash flow statements in accordance with GAAP and (e) Investments in, start-up expenses related to, and net operating losses incurred with respect to the Borrower’s subscription-based internet distribution services that are so identified in the Borrower’s financial reporting.
“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any indebtedness, lease, dividend, letter of credit or other obligation of another, including, without limitation, any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect to undrawn letters of credit, corporate credit cards or merchant services issued for the account of that Person; and (iii) all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business or customary indemnity obligations entered into in connection with any acquisition or any disposition permitted hereunder. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.
“Copyright Security Agreement” means a Copyright Security Agreement, substantially in the form of Exhibit G(1) attached hereto, as the same may be amended, supplemented or otherwise modified, renewed or replaced from time to time by delivery of a Copyright Security Agreement Supplement or otherwise.
“Copyright Security Agreement Supplement” means a Copyright Security Agreement Supplement, substantially in the form of Exhibit G(2) attached hereto.
“Credit Extension” means each Advance or any other extension of credit by Bank to or for the benefit of Borrower hereunder.
“Distributed and Licensed Content” means theatrical feature films, television productions and other traditional or non-traditional video content, for which a Loan Party obtains the rights via distribution agreements to be exploited in various manners, including one or more of theatrical distribution, DVDs, Blu-Ray, internet or digital distribution, pay-television, cable television and broadcast television.
“EBITDA” means annual earnings before interest, taxes, depreciation and amortization, calculated monthly on a trailing 12 month basis. EBITDA shall be calculated in accordance with GAAP.
“Entitlement Reserve Percentage” means, for any three month period, the percentage equal to the aggregate amount of third party entitlements to the Collections Amount during such period divided by the Collections Amount for such period.
“Environmental Laws” means all laws, rules, regulations, orders and the like issued by any federal state, local foreign or other Governmental Authority pertaining to the environment or to any hazardous materials or wastes, toxic substances, flammable, explosive or radioactive materials, asbestos or other similar materials.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder.
“Event of Default” has the meaning assigned in Article 11.
“Excluded Accounts” means any account which is exclusively used for trust, payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of employees.
“Excluded Subsidiaries” means Access Digital Cinema Phase 2 Corp.; Access Digital Cinema Phase 2 B/AIX Corp.; CDF2 Holdings, LLC; Cinedigm Digital Funding 2, LLC; Cinedigm Digital Cinema Australia Pty Ltd.; ADM Cinema Corporation d/b/a the Pavilion Theatre; Vistachiara Entertainment, Inc.; C&F Merger Sub, Inc.; and Matchpoint Digital, LLC.
“GAAP” means generally accepted accounting principles, consistently applied, as in effect from time to time.
“Governmental Authority” means any federal, state, municipal, national, supranational or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity, officer or examiner exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with the United States of America, any State thereof or the District of Columbia or a foreign entity or government.
“Hedge Agreement” means any agreement with respect to any swap, forward, future or derivative transaction, or any option or similar agreement, involving, or settled by reference to, one or more rates, currencies, commodities, prices of equity or debt securities or instruments, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value, or any similar transaction or combination of the foregoing transactions.
“Indebtedness” means (a) all indebtedness for borrowed money or the deferred purchase price of property or services, including without limitation reimbursement and other obligations with respect to surety bonds and letters of credit, but excluding trade payables in the ordinary course of business, (b) all obligations
evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations that have been or required to be accounted for as a capital lease on a balance sheet prepared in accordance with GAAP and (d) all Contingent Obligations, if any.
“Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law, including general assignments for the benefit of creditors, formal or informal moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.
“Investment” means any beneficial ownership of (including stock, partnership or limited liability company interest or other securities) any Person, or any loan, advance or capital contribution to any Person.
“IRC” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder.
“Lien” means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.
“Loan Documents” means, collectively, this Agreement, any note or notes executed by Borrower, the Copyright Security Agreement, the Copyright Security Agreement Supplements, and any other document, instrument or agreement entered into in connection with this Agreement, all as amended, restated, amended and restated, modified, supplemented or extended from time to time.
“Material Adverse Effect” means any event or circumstance that, (i) has a materially adverse effect on the business, assets, liabilities (actual or contingent), properties, operations or condition (financial or otherwise) of the Loan Parties, taken as a whole, (ii) materially impairs the legal right, power or authority of any Loan Party to perform its respective obligations under the Loan Documents to which it is a party, (iii) materially impairs the validity or enforceability of, or materially impairs the rights, remedies or benefits available to the Bank under the Loan Documents or (iv) has a materially adverse effect on the Collateral or the Bank’s security interests therein or the priority of such security interests; provided, however, that none of the following, either alone or in combination, will constitute, or be considered in determining whether there has been, a Material Adverse Effect: any event, change, circumstance, effect or other matter resulting from or related to (i) any outbreak or escalation of war or major hostilities or any act of terrorism, (ii) changes in laws, GAAP or enforcement or interpretation thereof, (iii) changes that generally affect the industries and markets in which Borrower and its Subsidiaries operate, (iv) changes in financial markets, general economic conditions (including prevailing interest rates, exchange rates, commodity prices and fuel costs) or political conditions, (v) any failure, in and of itself, of Borrower or any Subsidiary to meet any published or internally prepared projections, budgets, plans or forecasts of revenues, earnings or other financial performance measures or operating statistics (it being understood that the facts and circumstances underlying any such failure that are not otherwise excluded from the definition of a “Material Adverse Effect” may be considered in determining whether there has been a Material Adverse Effect), or (vi) any action taken or failed to be taken pursuant to or in accordance with the Loan Documents or at the request of, or consented to by, the Bank.
“Moody’s” means Moody’s Investors Service, Inc., or any successor to its rating agency business.
“Negotiable Collateral” means Collateral regarding which a security interest under the Code is or may be perfected by possession or control.
“Obligations” means all debt, principal, interest, Bank Expenses and other amounts owed to Bank by Borrower pursuant to this Agreement or any other agreement, whether absolute or contingent, due or to become due, now existing or hereafter arising, including any interest that accrues after the commencement of an Insolvency Proceeding and including any debt, liability, or obligation owing from Borrower to others that Bank may have obtained by assignment or otherwise.
“OFAC” means the Office of Foreign Asset Control of the United States Treasury Department.
“Operating Account” means a deposit account established at Bank in the name of Borrower and under the control of Bank for which certain amounts are to be deposited pursuant to the payment priorities in Section 4.4 of the Agreement.
“Owned Library Content” means theatrical feature films, television productions and other traditional or non-traditional video content, owned by a Loan Party and either (a) exploited by such Loan Party in various manners, including, but not limited to, one or more of theatrical distribution, DVDs, Blu-Ray, internet or digital distribution, pay-television, cable television, broadcast television and any other content distribution medium or otherwise or (b) licensed by the applicable Loan Party to a third party.
“Periodic Payments” means all installments or similar recurring payments that Borrower may now or hereafter become obligated to pay to Bank pursuant to the terms and provisions of any instrument, or agreement now or hereafter in existence between Borrower and Bank.
“Permitted Indebtedness” means:
“Permitted Investments” means:
“Permitted Liens” means the following:
“Permitted Transfer” means the conveyance, sale, lease, transfer or disposition by any Loan Party of:
“Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or governmental agency.
“Prime Rate” means, for any particular day, the variable rate of interest, per annum, most recently announced by Bank, as its “prime rate,” whether or not such announced rate is the lowest rate available from Bank.
“Prohibited Territory” means any person or country listed by OFAC as to which transactions between a United States Person and that territory are prohibited.
“Responsible Officer” means each of the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer and the Controller of Borrower.
“Revolving Line” means revolving Credit Extensions of up to Five Million Dollars ($5,000,000.00) in aggregate principal amount at any time outstanding.
“Revolving Maturity Date” means September 15, 2023; provided however that the Revolving Maturity Date may be extended for one successive period of one year at the sole discretion of the Bank so long as (i) no Event of Default has occurred and is continuing as of the then scheduled Revolving Maturity Date and (ii) provided that Borrower has given the Bank written notice of its intention to extend the Revolving Maturity Date at least ninety (90) days prior to the then scheduled Revolving Maturity Date. If the Borrower has given the Bank such a notice, the Bank shall notify the Borrower within thirty (30) days after receiving such notice as to whether the Revolving Maturity Date will be so extended.
“S&P” means S&P Global Ratings, or any successor to its rating agency business.
“Schedule” means the schedule of exceptions attached hereto and approved by Bank, if any.
“SOS Reports” means the official reports from the Secretaries of State of each Collateral State, Chief Executive Office State and the Borrower State and other applicable federal, state or local government offices identifying all current security interests filed in the Collateral and Liens of record as of the date of such report.
“Subordinated Debt” means any debt now or hereafter incurred by Borrower that is subordinated in writing to the debt owing by Borrower to Bank on terms reasonably acceptable to Bank (and identified as being such by Borrower and Bank).
“Subsidiary” means any corporation, partnership or limited liability company or joint venture in which (i) any general partnership interest or (ii) more than fifty percent (50%) of the stock, limited liability company interest or joint venture of which by the terms thereof ordinary voting power to elect the Board of Directors, managers or trustees of the entity, at the time as of which any determination is being made, is owned by Borrower, either directly or through a Subsidiary.
“Trademark Security Agreement” means a Trademark Security Agreement, substantially in the form of Exhibit H attached hereto.
“Unrestricted Cash” means cash that is not subject to any lien or security interest (other than the those granted pursuant to the this Agreement) and that is on deposit with Bank or its Affiliates in an account that is subject to a perfected security interest in favor of the Bank and in respect of which the relevant Loan Party has entered into an account control agreement reasonably satisfactory to the Bank.
EXHIBIT B
COLLATERAL DESCRIPTION ATTACHMENT TO AMENDED AND RESTATED LOAN, GUARANTY AND SECURITY AGREEMENT
Except as set forth in the definition of “Collateral” in Exhibit A to this Agreement, all personal property of the Loan Parties (collectively, the “Debtor”) whether presently existing or hereafter created or acquired, and wherever located, including, but not limited to:
For the purposes of this Agreement, (i) “Picture” means any television product (including movies of the week, mini-series and series and any episode thereof), motion picture or other audiovisual product, in any case whether recorded on film, videotape, cassette, cartridge, disc or on or by any other means, method, process or device whether now known or hereafter developed, with respect to which a Loan Party (i) has an ownership interest in the copyright (in whole or in part) or (ii) acquires any direct or indirect equity interest or participation rights, or any distribution rights, sales agency rights or other rights (including rights as a production services entity) or (ii) acquires any distribution rights, (ii) “Books” means books and records (including each Debtor’s records indicating, summarizing, or evidencing Debtor’s assets (including the Collateral) or liabilities, Debtors records relating to Debtor’s business operations or financial condition, and Debtor’s goods or General Intangibles related to such information, including, without limitation, ledger sheets and cards, files, correspondence, books of accounts, business papers, computers, computer software and programs for general business use, tapes, disks, and other documents relating to Debtors assets, (iii) “Contracts” means all contracts or agreements to which Debtor is a party including, without limitation, (a) each partnership agreement, joint venture agreement, limited liability company agreement, shareholders agreement, operating agreement, voting trust, proxy agreement or other similar agreement to which Debtor is a party and (b) each lease, license or sublicense, evidence of Indebtedness, mortgage, indenture, security agreement, deed of trust or other contract, commitment or obligation to which Debtor is a party, in each case whether contingent or matured, in each case, to which Debtor is a party, and (iv) “Contract Rights” means all of the rights of Debtor (including, without limitation, all rights to payment) under any Contract.
EXHIBIT C
LOAN ADVANCE/PAYDOWN REQUEST FORM
DEADLINE FOR SAME DAY PROCESSING IS Noon, P.S.T.
To: ______________________ | DATE: _____________, 2022 | TIME: ___________ |
FROM: CINEDIGM CORP. FROM: ____________________________ FROM: ____________________________ PHONE #: ____________________________ FROM ACCOUNT#: _____________________ TO ACCOUNT#: ____________________________ | TELEPHONE REQUEST (For Bank Use Only): The following person is authorized to request the loan payment transfer/loan advance on the designated account and is known to me. __________________________________ __________________________________ __________________________________ |
REQUESTED TRANSACTION TYPE | REQUESTED DOLLAR AMOUNT | For Bank Use Only Date Rec’d: |
PRINCIPAL INCREASE* (ADVANCE) | $ ________________________ | |
PRINCIPAL PAYMENT (ONLY) | $ ________________________ | |
OTHER INSTRUCTIONS: | ||
| ||
| ||
|
All representations and warranties of Borrower stated in the Amended and Restated Loan, Guaranty and Security Agreement are true, correct and complete in all material respects as of the date of the telephone request for and advance confirmed by this Loan Advance/Paydown Request Form; provided, however, that those representations and warranties the date expressly referring to another date shall be true, correct and complete in all material respects as of such date.
*IS THERE A WIRE REQUEST TIED TO THIS LOAN ADVANCE? (PLEASE CIRCLE ONE) | YES | NO |
If YES, the Outgoing Wire Transfer Instructions must be completed below. |
|
|
OUTGOING WIRE TRANSFER INSTRUCTIONS | Fed Reference Number | Bank Transfer Number | |
The items marked with an asterisk (*) are required to be completed. | |||
*Beneficiary Name |
| ||
*Beneficiary Account Number |
| ||
*Beneficiary Address |
| ||
*Currency Type | US DOLLARS ONLY | ||
*ABA Routing Number (9 Digits) |
| ||
*Receiving Institution Name |
| ||
*Receiving Institution Address |
| ||
*Wire Amount | $ |
EXHIBIT D
BORROWING BASE CERTIFICATE
Borrower: Cinedigm Corp. | Bank: |
Commitment Amount: $5,000,000 from the Closing Date through the Revolving Maturity Date |
|
Borrowing Base Calculation | Amount |
The Lesser of: |
|
(a) the difference of: |
|
i. the Commitment Amount; and | $5,000,000 |
ii. the amount of Advances outstanding; and | $[_______] |
TOTAL of (a) | $[_______] |
(b) the difference of: |
|
i. the Collections Amount; and | $[_______] |
ii. the product of: |
|
(x) the Collections Amount; and | $[_______] |
(y) the Entitlement Reserve Percentage | $[_______] |
TOTAL of (b) | $[_______] |
TOTAL BORROWING BASE | $[_______] |
The undersigned represents and warrants that the foregoing is true, complete and correct, and that the information reflected in this Borrowing Base Certificate complies with the representations and warranties set forth in the Amended and Restated Loan, Guaranty and Security Agreement between the undersigned and East West Bank.
Comments: | BANK USE ONLY Rec’d By: ___________________________ |
|
[Attach supporting Schedules and other detail]
EXHIBIT E
COMPLIANCE CERTIFICATE
Please send all Required Reporting to: East West Bank
[_______________]
FROM: Cinedigm Corp. (“Borrower’’)
The undersigned authorized Officer of Cinedigm Corp., hereby certifies that in accordance with the terms and conditions of the Amended and Restated Loan, Guaranty and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending ______________________________ with all required covenants, except as noted below and (ii) all representations and warranties of Borrower stated in the Agreement are true and correct in all material respects as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes.
Please indicate compliance status by circling Yes/No under “Complies” or “Applicable” column.
REPORTING COVENANTS | REQUIRED | COMPLIES |
Company Prepared Monthly F/S
Company Prepared Quarterly F/S
Compliance Certificate Company prepared
Audited and Unqualified F/S Borrowing Base Cert. | Monthly, within 20 days of the end of such month Quarterly, within 45 days of the end of such FQ Monthly, within 20 days of the end of such month Annually, within 90 days of FYE Monthly, within 20 days of the end of such month
| YES NO
YES NO
YES NO
YES NO YES NO |
FINANCIAL COVENANTS | REQUIRED ACTUAL | COMPLIES | |
TO BE TESTED MONTHLY, UNLESS OTHERWISE NOTED: |
| ||
Minimum balance of cash and availability under Minimum EBITDA | $2,000,000 | $___________ | YES NO |
>[[_]:1 | __________: 1 | YES NO |
Please Enter Below Comments Regarding Violations:
The Officer further acknowledges that at any time Borrower is not in compliance with all the terms set forth in the Agreement, including, without limitation, the financial covenants, no credit extensions will be made.
Very truly yours,
_________________________________
Authorized Signer
Name: Gary S. Loffredo
Title: President, Chief Operating Officer,
General Counsel and Secretary
EXHIBIT F
DISBURSEMENT LETTER
CINEDIGM CORP.
The undersigned duly elected and acting officers of CINEDIGM CORP. (“Borrower”) do hereby certify to EAST WEST BANK (“Bank”), in connection with that certain Amended and Restated Loan, Guaranty and Security Agreement dated as of ______ ___, 2022, by and among Borrower, the other Loan Parties thereto and Bank (as modified, amended and/or restated from time to time, the “Agreement”; with other capitalized terms used below having the meanings ascribed thereto in the Agreement) that:
[Balance of Page Intentionally Left Blank]
Loan Amount: $[_________________]
Less:
Net Proceeds of the Advance $ ___________
Prior Loan Agreement Expenses :
Bank Name: [___________]
Bank Address: [___________]
Account Number: [___________]
ASA Number: [___________]
Reference: Cinedigm Corp.
Bank Expenses (Paul Hastings LLP):
Bank Name: [___________]
Bank Address: [___________]
Account Name: [___________]
Account Number: [___________]
ASA Number: [___________]
Reference: [___________]
Balance - credited to Borrower’s account at East West Bank
[Balance of Page Intentionally Left Blank]
Dated as of the date first set forth above.
BORROWER:
CINEDIGM CORP.
By _______________________
Name: Gary S. Loffredo
Title: President, Chief Operating Officer,
General Counsel and Secretary
BANK:
EAST WEST BANK
By _______________________
Name: Jeffrey Zaks
Title: Senior Vice President
EXHIBIT G-1
COPYRIGHT SECURITY AGREEMENT
EXHIBIT G-2
COPYRIGHT SECURITY AGREEMENT SUPPLEMENT
EXHIBIT H
TRADEMARK SECURITY AGREEMENT
SCHEDULE OF EXCEPTIONS
Grant of Security Interest (Section 4.1)
None.
Prior Names (Section 6.4)
None.
Litigation (Section 6.5)
None.
Permitted Indebtedness (Exhibit A)
None.
Permitted Investments (Exhibit A)
Investments in the Excluded Subsidiaries in existence on the Closing Date.
Permitted Liens (Exhibit A)
Liens under the Prior Loan Agreement.
CORPORATE BORROWING CERTIFICATE
Borrower: CINEDIGM CORP. | Date: _____________, 2022 |
I hereby certify as follows, as of the date set forth above:
RESOLVED, that any one of the following officers or employees of Borrower, whose names, titles and signatures are below, may act on behalf of Borrower:☐☐☐☐
Name | Title | Signature | Authorized to Add or Remove Signatories |
____________________ | ___________________ |
|
|
____________________ | ___________________ |
|
|
____________________ | ___________________ |
|
|
____________________ | ___________________ |
|
|
RESOLVED FURTHER, that any one of the persons designated above with a checked box beside his or her name may, from time to time, add or remove any individuals to and from the above list of persons authorized to act on behalf of Borrower.
RESOLVED FURTHER, that such individuals may, on behalf of Borrower:
Borrow Money. Borrow money from East West Bank (“Bank”).
Execute Loan Documents. Execute any loan documents Bank requires.
Grant Security. Grant Bank a security interest in any of Borrower’s assets.
Negotiate Items. Negotiate or discount all drafts, trade acceptances, promissory notes, or other indebtedness in which Borrower has an interest and receive cash or otherwise use the proceeds.
Letters of Credit. Apply for letters of credit from Bank.
Foreign Exchange Contracts. Execute spot or forward foreign exchange contracts.
Issue Warrants. Issue warrants for Borrower’s capital stock.
Further Acts. Designate other individuals to request advances, pay fees and costs and execute
other documents or agreements (including documents or agreement that waive Borrower’s right to a jury trial) they believe to be necessary to effectuate such resolutions.
RESOLVED FURTHER, that all acts authorized by the above resolutions and any prior acts relating thereto are ratified.
CINEDIGM CORP.
By: ________________________
Name:
Title:
*** If the Secretary, Assistant Secretary or other certifying officer executing above is designated by the resolutions set forth in paragraph 4 as one of the authorized signing officers, this Certificate must also be signed by a second authorized officer or director of Borrower.
I, the _____________________ of Borrower, hereby certify as to paragraphs 1 through 5 above, as [print title] of the date set forth above. |
By: ________________________
Name:
Title:
EAST WEST BANK
Member FDIC
ITEMIZATION OF AMOUNT FINANCED
DISBURSEMENT INSTRUCTIONS
(Revolving Line)
Name: CINEDIGM CORP. Date: _________,2022
$ | credited to deposit account No. ______________ when Advances are requested or disbursed to Borrower by cashier’s check or wire transfer |
Amounts paid to others on your behalf: | |
$ | to East West Bank for accounts receivable audit (estimate) |
$ | to Bank counsel fees and expenses |
$ | to ___________________ |
$ | to ___________________ |
$ | TOTAL (AMOUNT FINANCED) |
Upon consummation of this transaction, this document will also serve as the authorization for East West Bank to disburse the loan proceeds as stated above.
_________________________________ | _________________________________ |
USA PATRIOT ACT
NOTICE
OF
CUSTOMER IDENTIFICATION
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.
WHAT THIS MEANS FOR YOU: when you open an account, we will ask your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.