Cinedigm to Acquire Gaiam, Inc.s Entertainment Unit, a Multi-Platform Content Licensor and Distributor

October 17, 2013

Cinedigm to Acquire Gaiam, Inc.s Entertainment Unit, a Multi-Platform Content Licensor and Distributor Accretive acquisition positions Cinedigm as the market leader for independent film, TV and digital content distribution for every key entertainment platform, retailer and device, across theatrical, the home and mobile

$51.5 million acquisition, projected to generate more than $15 million of EBITDA annually, is expected to close next week

CENTURY CITY, Calif. & NEW YORK--(BUSINESS WIRE)-- Cinedigm Corp. (NASDAQ: CIDM) (Cinedigm or the Company) today announced it has agreed to acquire Gaiam, Inc.s (NASDAQ: GAIA) entertainment unit, known as GVE, a leading distributor of home entertainment brands and content, for $51.5 million. Gaiam will retain its health and fitness media business. Cinedigms acquisition of GVE positions the Company as the market leader for independent film, TV and digital content distribution on every key entertainment platform, retailer and device across theatrical, the home and mobile. This accretive acquisition is expected to add more than $15 million of annual EBITDA to Cinedigms financial results.

When combined, Cinedigm and GVE will have:

A market position as the largest aggregator and distributor of independent content and the fourth largest distributor of non-theatrical DVDs and Blu-Ray discs in the U.S.

Annual retail sales exceeding $320 million from both physical products and digital sales;

Exclusive, multi-year relationships with a wide range of brand name content suppliers, including WWE, NFL, Hallmark, National Geographic, Discovery, Scholastic and The Jim Henson Company;

Direct sales and marketing relationships with almost every major physical and digital retailer, including Wal-Mart, Target, iTunes, Netflix and Amazon;

A huge library of digital distribution rights for independent films, TV series and other content that includes more than 32,000 titles and episodes

The largest physical retail footprint of any independent studio distributor in the United States, with products sold through over 60,000 retail locations; and,

Strong, experienced corporate and operating management bolstered by the addition of many key GVE employees.

Cinedigm has agreed to acquire GVE for $51.5 million, subject to working capital adjustments. The acquisition will be financed through a combination of: (i) a new $55 million senior-secured credit facility arranged and led by Soci t G n rale Corporate and Investment Banking that includes a $25 million 3-year term loan funded at closing and an up to $30 million revolving credit facility of which $15 million will be drawn at closing; (ii) an up to $5 million subordinated 5-year loan facility; (iii) $3 million of restricted Cinedigm stock of which $1 million was issued to Gaiam and $2 million was purchased by an existing shareholder; (iv) an up to $13.0 million underwritten public offering of common stock, inclusive of an up to $1.5 million over-allotment, with B. Riley & Co., LLC and National Securities Corporation, a wholly owned subsidiary of National Holdings, Inc. (OTCBB:NHLD), acting as co-lead managers. The acquisition is expected to close October 21, 2013. Blackstone Advisory Partners L.P. acted as financial advisor to the Company in connection with the acquisition of GVE and Merriman Capital acted as capital markets advisor for the equity offering. Please see our separate press release on the underwritten public offering.

This acquisition of GVE gives Cinedigm immediate scale and leverage across the entire entertainment value chain. The combination of GVEs deep stable of consumer-friendly brands and unique direct retail relationships paired with Cinedigms tremendous strength in the rapidly evolving digital distribution space as well as our theatrical releasing and over-the-top network businesses -- creates a powerful and game-changing entity poised to take full advantage of the content distribution revolution, said Cinedigm Chairman and CEO Chris McGurk. This accretive acquisition fully complements our existing businesses, while providing immediate scale, EBITDA, cash flow, cost and revenue synergies, strong new management and tremendous opportunities for further growth.

Adam Mizel, Cinedigm Chief Operating Officer and CFO, added: Our efforts over the last 2 years to transform Cinedigm and completely refinance our balance sheet were designed in part to prepare us for a smart, accretive acquisition like GVE that would leverage our strong position in the digital entertainment revolution and dramatically accelerate our growth strategy. The $51.5 purchase price represents a multiple of approximately 3.3 times GVEs 2013 estimated adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). We are particularly appreciative of the support we have received from our long term lead lender Soci t G n rale as well as the support in our equity offering from many of our largest shareholders and our underwriting partners and advisors at B. Riley, National Securities and Merriman Capital

Effective immediately GVE President Bill Sondheim will become President of Cinedigms Entertainment Group (CEG), and will report to Chris McGurk and Adam Mizel.

Bill Sondheim added, I am excited to be joining Cinedigm as the new President of our combined entertainment operations. I have known Chris for many years, having previously worked for him at Polygram Entertainment, and look forward to growing Cinedigms entertainment business with him and the entire Cinedigm team. Cinedigms industry-leading digital platform, film releasing business and emerging networks initiative, enhanced by GVEs direct physical goods, digital platform, retail relationships and brands, will make CEG an even more powerful and unique competitor in our evolving industry.

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The combin

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