Exhibit 10.1

 

 

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April 3, 2017

 

 

Mr. Ronald L. Chez

1524 N. Astor Street

Chicago, IL 60610

 

Re:Strategic Advisor Agreement

 

Dear Ron:

 

This letter (the “Agreement”) sets forth our agreement regarding the terms and
conditions of your retention as a strategic advisor by Cinedigm Corp. (the
“Company”). You and the Company agree as follows:

 

1.Roles.

 

(a)   Board Service; Equity Ownership. As of the Effective Date (as defined
below), you shall resign from the Board of Directors of the Company (the
“Board”). No later than April 7, 2017, you shall divest a sufficient number of
shares to cause your direct or indirect ownership of outstanding Class A Common
Stock, par value $0.001 per share of the Company (the “Common Stock”), to be
reduced to less than 10% of the outstanding Common Stock.

 

(b)   Strategic Advisor. As of the Effective Date, the Company shall engage you
to serve as Strategic Advisor to the Company. In your capacity as Strategic
Advisor, you shall render such advice to the Chief Executive Officer of the
Company (the “CEO”) as the CEO shall request, and to such others as the CEO
shall direct, and in such capacity shall receive and review all materials
provided to the Board (unless you request that you not receive such materials).
From and after the date of this Agreement, the Company agrees that you shall be
entitled to the same indemnification provisions as are applicable to the
directors of the Company and shall cause its directors and officers and general
liability insurers to include you as an additional insured in its existing and
all renewal policies. You shall, as requested by the CEO, advise the CEO with
respect to any of the following areas: financings and capital structure,
strategic transactions and opportunities, including acquisitions and
dispositions, strategic matters regarding the direction of the Company’s
business and activities and any other matters as the CEO may, from time to time,
request. Prior to the selection of any new director, the CEO and consultant will
discuss the qualifications and needs of the Company as to such board position.
You agree to conduct yourself with respect to these services at all times during
the term of this Agreement in a professional manner and to refrain from taking
any action inconsistent with the Company’s best interests, it being understood
that nothing herein shall limit your rights as a lender or shareholder of the
Company. The maximum liability for any breach by you of any duty relative to the
services being provided hereunder shall be limited to the amount of compensation
actually paid.

 

 

 

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(c)   Board Observation Right. During the course of this Agreement, you shall be
entitled to (i) receive notice of any regular or special meeting of the Board of
Directors (or of the adoption or proposed adoption of any resolution of the
Board of Directors by written consent) at the time such notice (or such proposed
written consent) is provided to the members of the Board (the “Directors”), (ii)
receive copies of any materials delivered to the non-employee Directors
concurrently with their delivery to the non-employee Directors and (iii) attend
and participate (but not vote) in all meetings of the Board and any committees
thereof; provided, however, that (x) you shall not be entitled to receive those
materials or to attend those meetings of the Board and of the Audit Committee,
the Compensation Committee and the Nominating Committee of the Board (each, an
“Independent Committee”) where your participation would conflict with applicable
laws and the rules of the Nasdaq Global Market or any other primary stock
exchange or market on which the Common Stock is then traded or quoted (the
“Trading Market”), in each case as reasonably determined in good faith by the
Board or by such Independent Committee as applicable.

 

2.Term.

 

(a)   This Agreement shall commence as of April 3, 2017 (the “Effective Date”)
and shall continue through March 31, 2019 (the “Term”). The Agreement shall
automatically be extended beyond March 31, 2019 for consecutive one year terms
except in the event either party serves notice of intent not to renew in writing
to the other at least 30 days prior to such date and each anniversary date
thereafter, as applicable.

 

(b)   Upon the expiration of the Term, or upon termination of the Agreement
prior to the expiration of the Term, you shall cease performing any strategic
advisory services and attending Board and/or committee meetings under this
Agreement. The parties agree that the provisions of Sections 5 and 6 of this
Agreement shall survive the termination of this Agreement.

 

3.Compensation.

 

(a)   Quarterly Amount. You will be paid the gross amount of twenty-five
thousand dollars ($25,000) per quarter, commencing with the quarter beginning
April 1, 2017 in consideration of the strategic advisory services you perform
under this Agreement (the “Compensation”). Such Compensation shall be payable in
cash, by check or wire transfer, in arrears within ten (10) business days after
the end of each relevant calendar quarter and shall be prorated if any
termination occurs other than at the end of a calendar quarter. The parties
acknowledge that any special projects involving more than 100 hours per quarter
may, subject to the mutual agreement of the parties be subject to a separate
compensation arrangement.

 

 

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(b)   Bonus. At the conclusion of the Term, you may be entitled to a
discretionary bonus of up to one hundred thousand ($100,000), at the
recommendation of the CEO and upon approval by the Compensation Committee of the
Board, payable in cash, by check or wire transfer, within forty-five (45) days
after the expiration of the Term.

 

4.     Expense Reimbursement. The Company will reimburse you for actual and
reasonable out-of-pocket travel and other expenses that are approved in advance
by the Company, including that are related to attending Board or committee
meetings. Such expenses may include necessary and reasonable travel, hotel, meal
and other expenses incurred by you. Promptly after the incurrence of expenses,
you shall submit to the Company a statement of expenses to be reimbursed, on a
form satisfactory to the Company, stating in detail the nature of the
expenditures and enclosing receipts for same. No expense will be reimbursed
without a receipt or other documentary evidence of the expense acceptable to the
Company.

 

5.     Non-Disclosure. You acknowledge that in the course of serving as
Strategic Advisor and as a Board observer, you will have access to and be
furnished with confidential information of the Company, including information
concerning the financial condition, business, operations, potential future plans
or transactions, or prospects of the Company (all of the foregoing, whether
communicated in verbal, written, graphic, electronic or any other form,
collectively, “Confidential Information”). The term “Confidential Information”
does not include information that (i) is or becomes generally available to the
public other than as a result of a disclosure by you in violation of this
Agreement, or (ii) was available to you on a non-confidential basis prior to its
disclosure to you by the Company. You acknowledges that the Confidential
Information is owned by the Company; is unique, valuable, proprietary and
confidential; and derives independent actual or potential commercial value from
not being generally known or available to the public or to the industries in
which the Company competes. During the Term including any extension thereto and
for a period of one year thereafter, you agree to maintain the confidentiality
of the Confidential Information at all times. You acknowledge that the receipt
of Confidential Information from the Company may restrict your ability to trade
in securities of the Company under applicable federal and state securities law,
and that while you are in possession of Confidential Information, you may not
trade in Company securities to the extent required under applicable law. Nothing
herein will restrict your ability to communicate or discuss Confidential
Information with officers or directors of the board, their professional
advisors, the Company’s professional advisors or any third party under a written
confidentiality agreement with the Company.

 

 

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6.     Non-Disparagement. The parties respectively hereby agree that during the
Term and at all times thereafter, they will not and will use their best efforts
to cause their officers and directors to not make any public statement, or
engage in any conduct, that is disparaging to the other or, any of their
officers, directors, or shareholders known to them, including, but not limited
to, any statement that disparages the products, services, finances, financial
condition, capabilities or other aspect of the business of the Company.
Notwithstanding any term to the contrary herein, a party shall not be in breach
of this section for the making of any truthful statements or reporting
truthfully any violation of law. The sole remedy for a violation of this
provision will be termination of this Agreement but such limitation will not
apply to any statement that is otherwise actionable as a breach of the
confidentiality provisions, or would otherwise be actionable absent this
covenant.

 

7.     Miscellaneous Representations.

 

(a)    Each party respectively represents and warrants that it or he has all
requisite power to enter into this Agreement and that the execution, delivery
and performance of this Agreement does not and will not result in any violation
of, be in conflict with, or constitute a default under any agreement or other
instrument to which such party is bound. Upon becoming aware of, or receiving
any notice from any third party that alleges any such violation, conflict or
default, the party receiving such notice shall immediately advise the other.

 

(b)   Nothing contained in this Agreement is intended or shall be deemed to
create the relationship of employer and employee between you and the Company.
You are retained as an independent contractor and shall not be entitled to any
employment rights or benefits provided by the Company to its employees,
including paid vacation, holiday and sick time, medical, dental, life and
disability insurance, and participation in any pension or bonus plan of the
Company. You expressly understand and acknowledge that (i) you will be solely
responsible for the reporting and payment of any federal, state and local income
taxes that may arise out of the fees paid to you under this Agreement and (ii)
you will be solely responsible to obtain and maintain any insurance policy that
you deem necessary in the performance of the strategic advisory services other
than the Company’s obligations as D&O and general liability to name you as an
additional insured under this Agreement and understand and acknowledge that the
Company will not maintain any insurance policies, including workers compensation
insurance, in connection with your retention under this Agreement.

 

(c)   You shall have no authority to bind the Company in any way and may not
enter into, terminate or modify any agreement, contract or commitment on behalf
of the Company. You shall not make any representation to any third party that
you are the Company’s agent or authorized to bind the Company except pursuant to
a delegation from the Board or the CEO within their respective authority.

 

 

 

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(d)   You shall not make any public statement, or issue any press release,
concerning the Company or any of the services being provided by you to the
Company under this Agreement without the prior written approval of the Company.

 

8.     Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof, and supersedes all prior
agreements, arrangements and understandings, either oral or written, between the
Company and you, and may be amended only by a written instrument executed by you
and an officer of the Company. For the avoidance of doubt, this Agreement does
not supersede any agreements with respects to loans or advances made by you or
your affiliates to the Company.

 

9.     Choice of Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware, without regard to
principles of conflicts of law. The parties hereby agree to submit to the
jurisdiction of the courts of the State of Illinois and further agree that any
actions relating to this Agreement must be instituted in the courts of the State
of Illinois.

 

10.   Severability. If any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed to be modified to conform with such statute or rule of law. Any
provision hereof that may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision hereof.

 

11.   Non-Assignment. You may not assign this Agreement or delegate any duties
hereunder without the prior written consent of the Company.

 

12.   Damages. All parties waive any claim for punitive, consequential, or
incidental damages. The maximum liability for any breach by you of any duty
relative to the services being provided hereunder shall be limited to the amount
of compensation actually paid. In any action to collect funds hereunder arising
from nonpayment in which you prevail, you shall be entitled to also recover your
reasonable attorneys’ fees and litigation costs.

 

 

 

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Please indicate your understanding of, and agreement to, the foregoing terms by
signing this letter in the space indicated below, whereupon this letter shall
become a binding agreement between the parties. This Agreement may be executed
and acknowledged in one or more counterparts (including by facsimile or other
electronic transmission), all of which shall be considered one and the same
Agreement.

 

  Sincerely,           By:      /s/ Christopher J. McGurk          Name:
Christopher J. McGurk  

Title: Chief Executive Officer 

 

Agreed to and accepted:

 

 

/s/ Ronald L. Chez                   

Ronald L. Chez

 

 

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