RLJE Rlj Entertainment, Inc. (delisted)

ABOUT THIS PROXY STATEMENT

        This statement constitutes the proxy statement (" Proxy Statement ") of RLJ Entertainment, Inc., a Nevada corporation (" RLJE " or the " Company "), under Section 14(a) of the Securities Exchange Act of 1934, as amended. In addition, it constitutes a notice of meeting with respect to the special meeting (" Special Meeting ") of the common stockholders of the Company (" Stockholders ").

        The Company, AMC Networks Inc., a Delaware corporation (" AMC "), Digital Entertainment Holdings LLC, a Delaware limited liability company and wholly owned subsidiary of AMC (" Parent "), and River Merger Sub Inc., a Nevada corporation and wholly owned subsidiary of Parent (" Merger Sub ") have entered into an Agreement and Plan of Merger, dated as of July 29, 2018 (as it may be amended or supplemented from time to time, the " Merger Agreement "). Pursuant to the Merger Agreement, upon the terms and subject to the conditions thereof, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and as a wholly owned subsidiary of Parent (the " Merger "). Accordingly, unless otherwise expressly stated herein, all discussions in this Proxy Statement concerning the Merger, the Merger Agreement, and all transaction documentation, including all discussions concerning the events leading thereto, the applicable proceedings of the Special Committee of the Board of Directors of the Company (the " Special Committee "), the fairness opinion of the financial advisor to the Special Committee, and all other considerations, all relate to the Merger Agreement and the transactions contemplated thereby, including the Merger.

        No one has been authorized to provide you with information that is different from that contained in this Proxy Statement. This Proxy Statement is dated [                ], 2018. You should not assume that the information contained in this Proxy Statement is accurate as of any date other than that date. The mailing of this Proxy Statement to Stockholders will not create any implication to the contrary.

         This Proxy Statement will not constitute an offer to sell, or the solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation.

        Unless otherwise indicated or as the context otherwise requires, all references in this Proxy Statement to:

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" 2015 Warrant Consideration " refers to an amount in cash, without interest, equal to the product of (i) the number of Shares issuable upon exercise of such Eligible 2015 Warrant immediately prior to the Effective Time multiplied by (ii) the excess of (A) the Per Share Merger Consideration minus (B) the exercise price per Share of such Eligible 2015 Warrant.



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" 2015 Warrants " means the warrants to purchase Shares with an initial exercise date of May 20, 2015;



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" Affiliates " refers to means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person as of the date on which, or at any time during the period for which, the determination of affiliation is being made (for purposes of this definition, the term "control" (including the correlative meanings of the terms "controlled by" and "under common control with"), as used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise); provided, that (i) with respect to Parent, the term "Affiliate" means only Ultimate Parent and its Subsidiaries (and, for the avoidance of doubt, does not include the Company or its Subsidiaries or any other Persons that are not controlled by Ultimate Parent) and (ii) with respect to the Company, the term "Affiliate" includes (among other Persons) Agatha Christie Limited and Agatha Christie Productions Limited, but does not include Ultimate Parent or its Subsidiaries;



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" AMC " or " Ultimate Parent " refers to AMC Networks Inc., a Delaware corporation;

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" AMC Warrants " refers to the Class A, Class B and Class C warrants held by Parent to purchase Shares with an initial exercise date of October 14, 2016;



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" Board " or " Board of Directors " refers to the Board of Directors of the Company;



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" Closing " refers to the closing of the Merger;



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" Closing Date " refers to the date on which the Closing occurs;



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" Common Stock " refers to the common stock of RLJ Entertainment, par value $0.001 per share;



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" Company Bylaws " refers to the bylaws of the Company, as amended effective July 30, 2018, as in effect immediately prior to the Effective Time;



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" Company Charter " refers to the amended and restated articles of incorporation of the Company as in effect immediately prior to the Effective Time;



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" Company Option " refers to any outstanding option to purchase shares of Company Stock granted under the Incentive Plan;



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" Company PSU " refers to any outstanding performance stock unit granted under the Incentive Plan;



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" Company Restricted Share " refers to any outstanding restricted stock award granted under the Incentive Plan;



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" Company RSU " refers to any outstanding restricted stock unit granted under the Incentive Plan;



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" Contribution Agreement " refers to the Contribution Agreement, dated as of July 29, 2018, by and between the Johnson Entities and Parent;



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" Conversion Amount " means with respect to each share of Preferred Stock, as of the applicable date of determination, the sum of (1) the Stated Value plus (2) all accrued and unpaid dividends on such share, whether or not declared (other than Capitalized Dividends, as defined in the certificate of designation for such share) and any accrued and unpaid Late Charge (as defined in the certificate of designation for such share);



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" Converted Option Award " means the right to receive, on the earlier of (x) the date on which each such Company Option is scheduled to vest (subject to the achievement of the vesting conditions) and (y) the first anniversary of the Closing Date (subject to continued employment through that date), the Option Consideration, subject to the terms and conditions (including vesting conditions) that applied to the Company Option immediately prior to the Effective Time;



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" Converted PSU Award " means the right to receive, on the earlier of (x) the date on which such PSU is scheduled to vest (subject to the achievement of the vesting conditions) and (y) the first anniversary of the Closing Date, subject to continued employment through that date, an amount in cash, without interest and subject to applicable withholding tax, equal to the product of (i) the number of shares underlying such Converted PSU Award multiplied by (ii) the Per Share Merger Consideration, subject to the terms and conditions (including vesting conditions) that applied to the Company PSU immediately prior to the Effective Time;



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" Converted RSU Award " means the right to receive, on the earlier of (x) the date on which each such RSU is scheduled to vest (subject to the achievement of the vesting conditions) and (y) the first anniversary of the Closing Date, subject to continued employment through that date, an amount in cash, without interest and subject to applicable withholding taxes, equal to the product of (i) the number of shares underlying such RSU immediately prior to the Effective Time multiplied by (ii) the Per Share Merger Consideration, subject to the terms and conditions (including vesting conditions) that applied to the Company RSU immediately prior to the Effective Time;



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" Dissenter's Rights Statutes " means NRS 92A.300 to 92A.500, inclusive;

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" Dissenting Shares " means any shares of Preferred Stock owned by holder who has duly demanded and perfected, and has not withdrawn or otherwise waived or lost, dissenter's rights pursuant to and in accordance with the NRS;



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" Effective Time " refers to the date and time that the Articles of Merger have been duly filed with and accepted by the Nevada Secretary of State, or at such later date and time as the Company and Parent may agree and as specified in the Articles of Merger;



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" Eligible 2015 Warrant " refers to each 2015 Warrant issued and outstanding immediately prior to the Effective Time other than 2015 Warrants owned by Ultimate Parent, Parent, Merger Sub or any other Affiliate of Parent;



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" Eligible Preferred Share " refers to each share of Preferred Stock issued and outstanding immediately prior to the Effective Time other than Dissenting Shares and shares of Preferred Stock owned by Ultimate Parent, Parent, Merger Sub or any other Affiliate of Parent;



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" Exchange Act " refers to the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder;



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" Excluded Shares " refers to, collectively, (a) the Shares (including Shares underlying the Preferred Stock, 2015 Warrants and AMC Warrants) owned by Ultimate Parent, Parent, Merger Sub or any other Affiliate of Parent, and (b) any Shares directly or indirectly owned by the Company or any controlled Affiliate of the Company, in each case not held on behalf of third parties;



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" Greenberg Traurig " refers to Greenberg Traurig, LLP, counsel to the Special Committee;



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" Governmental Entity " refers to any U.S., non-U.S., or supranational governmental (including public international organizations), quasi-governmental, regulatory or self-regulatory authority, agency, commission, body, department or instrumentality, or any court, tribunal or arbitrator or other entity or subdivision thereof or other legislative, executive or judicial entity or subdivision thereof, in each case of competent jurisdiction;



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" Incentive Plan " refers to the Company's 2012 Incentive Compensation Plan, as amended;



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" Indemnified Parties " refers to, collectively, each present and former (determined as of the Effective Time) director or officer of the Company or any of its Subsidiaries, in each case, when acting in such capacity;



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" Investment Agreement " refers to the Investment Agreement, dated as of August 19, 2016, by and between the Company and Parent;



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" Johnson Entities " refers, collectively, to Robert L. Johnson, The RLJ Companies, LLC, and RLJ SPAC Acquisition, LLC;



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" Merger " refers to the merger of Merger Sub with and into RLJ Entertainment;



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" Merger Sub " refers to River Merger Sub Inc., a Nevada corporation and wholly owned subsidiary of Parent;



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" Non-Affiliate Common Stockholders " refers to Stockholders other than AMC, the Johnson Entities, the Company's officers and directors, and their respective Affiliates.



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" NRS " refers to the Nevada Revised Statutes;



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" Option Consideration " refers to an amount in cash, without interest and subject to applicable withholding taxes equal to the product of (i) the number of Shares issuable upon exercise of such Company Option(s) immediately prior to the Effective Time multiplied by (ii) the excess of (A) the Per Share Merger Consideration minus (B) the exercise price of such Company Option(s);



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" Outside Date " refers to February 28, 2019;

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" Organizational Documents " refers to (a) with respect to any Person that is a corporation, its articles or certificate of incorporation, memorandum and articles of association, as the case may be, and bylaws, or comparable documents, (b) with respect to any Person that is a partnership, its certificate of partnership, if any, and partnership agreement, or comparable documents, (c) with respect to any Person that is a limited liability company, its certificate of formation or articles of organization and limited liability company or operating agreement, or comparable documents and (d) with respect to any other Person that is not an individual, its comparable organizational documents;



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" Parent " refers to Digital Entertainment Holdings LLC, a Delaware limited liability company and a wholly owned subsidiary of Ultimate Parent;



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" Paying Agent " refers to the U.S. bank or trust company appointed by Parent to act as paying agent, in trust for the benefit of the holders of the Common Stock;



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" Per Share Merger Consideration " refers to the right to receive $6.25 per Share in cash, without interest;



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" Person " refers to any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, Governmental Entity or other entity of any kind or nature;



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" Preferred Stock " means the preferred stock of the Company, par value $0.001 per share;



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" Preferred Stock Consideration " refers to an amount in cash, without interest, equal to the product of (i) 125% multiplied by (ii) the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient of (1) the Per Share Merger Consideration divided by (2) $3.00;



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" Representative " refers to, with respect to any Person, any director, principal, partner, manager, member (if such Person is a member-managed limited liability company or similar entity), employee (including any officer), consultant, investment banker, financial advisor, legal counsel, authorized attorneys-in-fact, accountant or other advisor, agent or representative of such person, in each case acting in their capacity as such;



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" Requisite Company Vote " refers to the approval of the Merger Agreement by the holders of a majority of the outstanding Shares entitled to notice of and to vote on such matter at a meeting of the holders of Common Stock duly called and held for such purpose;



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" RLJE ", " RLJ Entertainment ", the " Company ", " we " " our " or " us " refers to RLJ Entertainment, Inc., a Nevada corporation;



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" RLJ SPAC " refers to RLJ SPAC Acquisition, LLC.



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" Rollover Shares " refers to the shares of Common Stock and 2015 Warrants owned by the Johnson Entities that will be contributed to Parent immediately prior to consummation of the Merger pursuant to the Contribution Agreement;



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" SEC " refers to the U.S. Securities and Exchange Commission;



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" Share " refers to a share of Common Stock;



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" Special Committee " refers to the special committee of independent and disinterested directors of the Board heretofore constituted, established and authorized pursuant to duly adopted resolutions of the Board and NRS 78.125(1) for the purpose of, among other things, considering, negotiating and making a dispositive and binding determination on behalf of the Company and the Board to approve or disapprove of the Merger Agreement and the other transaction contemplated thereby;



•

" Stated Value " means, with respect to each share of Preferred Stock, the sum of (i) $1,000 per share and (ii) any Capitalized Dividends (as defined in the certificate of designation for such

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share) with respect to such share of Preferred Stock, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the initial issuance date of such share.

•

" Stock Unit Consideration " refers to an amount in cash, without interest and subject to applicable withholding taxes equal to the product of (i) the number of Shares issuable upon exercise of such Company PSUs or Company RSUs immediately prior to the Effective Time multiplied by (ii) the Per Share Merger Consideration.



•

" Subsidiaries " refers to, with respect to any Person, any other Person of which at least a majority of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other individuals performing similar functions is directly or indirectly owned or controlled by such Person and/or by one or more of its Subsidiaries, provided, that with respect to Ultimate Parent and its Subsidiaries, the term "Subsidiary" does not include the Company;



•

" S&C " refers to Sullivan & Cromwell LLP, counsel to AMC, Parent and Merger Sub.



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" Voting Agreement " refers to the Voting and Transaction Support Agreement, dated as of July 29, 2018, by and among Parent, the Johnson Entities and the Company.

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

         The following questions and answers are intended to address briefly some commonly asked questions regarding the Merger, the Merger Agreement and the Special Meeting. These questions and answers may not address all questions that may be important to you as a Stockholder of the Company. Please refer to the "Summary Term Sheet" and the more detailed information contained elsewhere in this Proxy Statement, the annexes to this Proxy Statement and the documents referred to in this Proxy Statement, which you should read carefully and in their entirety.

Q.

What is the proposed transaction and what effects will it have on the Company?

A.

The proposed transaction involves the acquisition of the Company by Parent in accordance with the terms and subject to the conditions set forth in the Merger Agreement.

If the proposal to approve the Merger Agreement is approved by our Stockholders at the Special Meeting and the other closing conditions under the Merger Agreement have been satisfied or, to the extent permitted by the Merger Agreement and applicable law, waived, Merger Sub will merge with and into the Company. Upon completion of the Merger, the Company will be the Surviving Corporation in the Merger and will continue to exist and conduct business following the Merger. As a result of the Merger, we will become a wholly owned subsidiary of Parent and will no longer be a publicly traded corporation, and you will no longer have any equity interest in the Company or any financial interest in our future earnings or growth.

Q.

What will I receive if the Merger is completed?

A.

Upon completion of the Merger, you will be entitled to receive the Per Share Merger Consideration of $6.25 in cash, without interest thereon and less any required withholding taxes, for each share of our Common Stock that you own. For example, if you own 100 shares of Common Stock, you will receive $625 in cash in exchange for your shares, less any required withholding taxes. You will not own any shares of capital stock of the Surviving Corporation.

Q.

When do you expect the Merger to be completed?

A.

We and Parent have agreed in the Merger Agreement to complete the Merger as soon as practicable. If the Merger Agreement is approved at the Special Meeting then, assuming timely satisfaction or, to the extent permitted by the Merger Agreement and applicable law, waiver of the other necessary closing conditions, we anticipate that the Merger will be completed promptly thereafter.

Q.

What happens if the Merger is not completed?

A.

If the Merger Agreement is not completed for any reason, you will not receive any payment for your shares of Common Stock. Instead, we will remain an independent public company, and our Common Stock will continue to be listed and traded on the Nasdaq Capital Market.

If, to the extent permitted by the Merger Agreement, (i) the Merger Agreement is terminated by either us or Parent due to the failure to consummate the Merger by the Outside Date, any Person has made and publicly announced an Acquisition Proposal and, within 12 months of such termination, we have entered into or consummated an Alternative Acquisition Agreement with respect to an Acquisition Proposal or (ii) the Merger Agreement is terminated by either Parent or us as a result of a Recommendation Change made in connection with a Superior Proposal, the Company must pay or cause to be paid to Parent a termination fee equal to $6.75 million, as described under " The Merger Agreement—Terms of the Merger Agreement—Termination Fees " beginning on page [     ·     ] of this Proxy Statement.

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If, to the extent permitted by the Merger Agreement, the Merger Agreement is terminated by either Parent or us as a result of a Recommendation Change made in connection with an Intervening Event, the Company must pay or cause to be paid to Parent a cash termination fee equal to the documented, out-of-pocket expenses of Parent incurred in connection with the Merger Agreement and the transactions contemplated thereby, up to a maximum of $3 million, as described under " The Merger Agreement—Terms of the Merger Agreement—Termination Fees " beginning on page [     ·     ] of this Proxy Statement.

Q.

Is the Merger expected to be taxable to me?

A.

Yes. The exchange of shares of Common Stock for the Merger Consideration in the Merger will be a taxable transaction to U.S. Holders for U.S. federal income tax purposes. In general, a U.S. Holder who receives cash in exchange for shares of Common Stock pursuant to the Merger will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received (determined before the deduction of any withholding tax) and the Stockholder's adjusted tax basis in the shares of Common Stock exchanged for cash pursuant to the Merger. Backup withholding may also apply to the cash payments made pursuant to the Merger unless the U.S. Holder or other payee provides a taxpayer identification number, certifies that such number is correct and otherwise complies with the backup withholding rules.

Payments made to a Non-U.S. Holder who receives cash in exchange for shares of Common Stock pursuant to the Merger will generally be exempt from U.S. federal income tax, subject to certain exceptions. A Non-U.S. Holder may, however, be subject to backup withholding with respect to the cash payments made pursuant to the Merger, unless the holder certifies that it is not a U.S. person or otherwise establishes a valid exemption from backup withholding tax.

See " Special Factors—Material U.S. Federal Income Tax Consequences of the Merger " beginning on page [     ·     ] of this Proxy Statement for definitions of "U.S. Holder" and "Non-U.S. Holder," and for a more detailed discussion of the U.S. federal income tax consequences of the Merger.

You should consult your own tax advisor regarding the particular tax consequences (including the state, local or non-U.S. tax consequences) of the Merger to you in light of your own particular circumstances.

Q.

How many votes do I have?

A.

You will have one vote for each share of Common Stock that you owned on the Record Date.

Q.

What will I be voting on?

A.

You will be voting on the following:

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Proposal 1:   The approval of the Merger Agreement, which provides that, at the effective time, Merger Sub will merge with and into the Company, with the Company surviving the Merger as a wholly owned subsidiary of Parent;

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Proposal 2:   The proposal to approve, by non-binding, advisory vote, certain compensation that will or may become payable to the Company's executive officers in connection with the Merger; and

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Proposal 3:   The proposal to adjourn the Special Meeting, if necessary or appropriate (as determined by the Company).

Q.

What are the voting recommendations of the Special Committee?

A.

The Special Committee has unanimously determined that the Merger Agreement and the Merger are advisable, fair to, and in the best interests of, the Company and its Non-Affiliate Common

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Stockholders and adopted the Merger Agreement and the Merger. The Special Committee recommends that you vote " FOR " approval of the Merger Agreement (Proposal 1) "and " FOR " approval of the proposal to adjourn the Special Meeting, if necessary or appropriate (as determined by the Company) (Proposal 3). The Board recommends that you vote FOR " approval, by non-binding advisory vote, of certain compensation that will or may become payable to the Company's executive officers in connection with the Merger (Proposal 2).

Q.

How do I vote?

A.

If you are a Stockholder of record (that is, if your shares of Common Stock are registered in your name with Computershare Trust Company, N.A., our transfer agent), then you may vote in any of the following four ways:

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By telephone;

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By the internet;

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By mail; or

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By vote at the Meeting

Telephone and Internet voting is convenient, provides postage and mailing cost savings and is recorded immediately, minimizing the risk that postal delays may cause votes to arrive late and therefore not be counted.

Even if you plan to attend the Special Meeting, you are encouraged to vote your shares by proxy. You may still vote your shares in person at the meeting even if you have previously voted by proxy. If you are present at the meeting and desire to vote in person, your previous vote by proxy will not be counted.

Q.

What if I hold my shares in "street name"?

A.

If you are a beneficial owner of shares held in "street name" and do not provide the broker, nominee, fiduciary or other custodian through which you hold your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that holds your shares may generally vote on routine matters but cannot vote on non-routine matters. We believe that the proposals set forth in this Proxy Statement will not be considered to be routine matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the organization that holds your shares will inform us that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a "broker non-vote." When we tabulate the votes for any particular matter, broker non-votes will be counted for purposes of determining whether a quorum is present. Your broker or nominee will usually provide you with the appropriate instruction form at the time you receive this Proxy Statement. We encourage you to provide voting instructions to the organization that holds your shares by carefully following the instructions in the voting instruction form.

If you do not instruct your bank, brokerage firm or other nominee to vote your shares of Common Stock, your shares will not be voted on any of the proposals described in this Proxy Statement, which will have the same effect as a vote " AGAINST " the proposal to approve the Merger Agreement.

Q.

How many votes must be present to hold the meeting?

A.

Nevada law and our Bylaws require that a quorum exist for the transaction of business at a Stockholder meeting. A quorum for the actions to be taken at the Special Meeting will consist of a

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majority of the voting power of the outstanding shares of stock that are entitled to vote at the Special Meeting. Proxies marked as abstaining, and any proxies returned by brokers as "broker non-votes" on behalf of shares held in "street name" because beneficial owners' discretion has been withheld as to one or more matters on the agenda for the Special Meeting, will be treated as present and entitled to vote and will count towards the establishment of a quorum. Our founder, Robert L. Johnson, and his affiliates, who collectively own approximately 43.5% of the outstanding Common Stock, have agreed to be present at the Special Meeting for the purpose of establishing a quorum.

Q.

What vote is required to approve each proposal?

A.

Approval required for Proposal 1:     If a quorum is present at the Special Meeting, the approval of the Merger Agreement requires the affirmative vote of holders (in person or by proxy) of a majority of the outstanding shares of Common Stock entitled to vote thereon at the Special Meeting. Because the affirmative vote required to approve the proposal to approve the Merger Agreement is based upon the total number of outstanding shares of Common Stock, if you fail to submit a proxy or vote in person at the Special Meeting, or abstain, or you do not provide your bank, brokerage firm or other nominee with voting instructions, as applicable, this will have the same effect as a vote " AGAINST " the proposal to approve the Merger Agreement.

AMC has notified the Company that it intends to exercise the AMC Warrants, in full (or in substantial part), prior to the record date of the Special Meeting and that it will vote all shares of common stock owned by AMC in favor of approval of the Merger Agreement at the Special Meeting. Accordingly, upon AMC's exercise, in full (or in substantial part), of the AMC Warrants, AMC will have the requisite voting power and ability at the Special Meeting to unilaterally cause the approval of the Merger Agreement by the requisite vote of the Company's stockholders (without any need for any additional votes by any other Company stockholder).

Approval required for Proposal 2:     If a quorum is present, approval, by non-binding, advisory vote, of certain compensation that will or may become payable to the Company's executive officers in connection with the Merger will be approved if the number of votes cast at the special in favor of such proposal exceeds the number of votes cast opposing such proposal. The outcome of this vote is not binding on the Company.

Approval required for Proposal 3:     If a quorum is present, approval of the proposal to adjourn the Special Meeting, if necessary or appropriate (as determined by the Company), whether in person or by proxy, in favor of adjournment exceeds the number of votes cast opposing adjournment.

Q.

What are the effects of abstentions and broker non-votes?

A.

Abstentions

Pursuant to Nevada law, abstentions are counted as present for purposes of determining the presence of a quorum; however, abstentions will not be counted as votes cast " FOR " or " AGAINST " any proposal. Because the proposal to approve the Merger Agreement requires the affirmative vote of a majority of our outstanding shares of Common Stock entitled to vote thereon at the Special Meeting, an abstention will have the same effect as a vote " AGAINST " the proposal to approve the Merger Agreement.

Abstentions will have no effect on the voting results for any other proposal described in this Proxy Statement.

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Broker "non-votes"

Under applicable exchange rules, if a broker, bank or other institution that holds shares in "street name" for a customer does not receive voting instructions from that customer, the broker may vote on only certain "routine" matters. For "non-routine" matters, which include all proposals contained in this Proxy Statement, a broker may not vote on such matters unless it receives voting instructions from the customer for whom it holds shares of Common Stock. A broker "non-vote" occurs when a broker does not receive such voting instructions from its customer on "non-routine" matters. Broker non-votes are counted for purposes of determining the presence of a quorum; however, they will not be counted as votes cast " FOR " or " AGAINST " any proposal and will have no effect on the voting results for any proposal, other than the proposal to approve the Merger Agreement, for which a broker non-vote will have the effect of a vote " AGAINST " approval of the Merger Agreement.

Because all proposals in this Proxy Statement are considered "non-routine" matters under applicable exchange rules, we urge you to give voting instructions to your broker.

If any "routine" matters are properly brought before the Special Meeting, then brokers holding shares in street name may vote those shares in their discretion for any such routine matters.

Q.

Can I change my mind after I vote?

A.

If you are the record owner of your shares, you may revoke your proxy at any time before it is voted at the Special Meeting by:

•

delivering written notice to our Corporate Secretary at 8515 Georgia Avenue, Suite 650, Silver Spring, Maryland 20910;

•

executing and delivering to our Corporate Secretary at the address above a proxy bearing a later date;

•

attending the Special Meeting in person, at which time the powers of the proxy holders with respect to your shares will be revoked if you so request; or

•

submitting a vote by telephone or via the Internet with a later date.

Please note that attendance at the Special Meeting will not, by itself, constitute revocation of your proxy.

If you hold your shares in "street name," the broker, nominee, fiduciary or other custodian through which you hold your shares will instruct you as to how you may revoke or change your vote.

Q.

Who will count the votes?

A.

A representative of Computershare Trust Company, N.A. will count the votes and will serve as the independent inspector of elections.

Q.

What does it mean if I receive more than one proxy card?

A.

It means that you have multiple accounts with brokers or our transfer agent. Please vote all of these shares of Common Stock. We encourage you to register all of your shares of Common Stock in the same name and address. You may do this by contacting your broker or our transfer agent. Our transfer agent may be reached at 1-800-586-1305 or at the following address:

Computershare Trust Company, N.A.
Computershare Inc.

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250 Royall Street
Canton, Massachusetts 02021

Q.

Will my shares of Common Stock be voted if I do not provide my proxy?

A.

If you are the Stockholder of record and you do not vote or provide a proxy, your shares of Common Stock will not be voted.

If your shares of Common Stock are held in "street name", they may not be voted if you do not provide the bank, brokerage firm or other nominee with voting instructions. Currently, banks, brokerage firms or other nominees have the authority under the Nasdaq Capital Market rules to vote shares of Common Stock for which their customers do not provide voting instructions on certain "routine" matters.

However, banks, brokerage firms or other nominees are precluded from exercising their voting discretion with respect to approving non-routine matters, which include all proposals described in this Proxy Statement, and, as a result, absent specific instructions from the beneficial owner of shares of Common Stock held in street name, banks, brokerage firms or other nominees are not empowered to vote those shares.

Q.

May Stockholders ask questions?

A.

Yes. Our representatives will answer Stockholders' appropriate questions of general interest following the Special Meeting consistent with the rules distributed at the Special Meeting.

Q.

Have any Stockholders already agreed to vote "FOR" approval of the Merger Agreement?

A.

As of the date of this Proxy Statement, AMC, through DEH, owns approximately 30.0% of the outstanding Common Stock, in addition to the AMC Warrants it owns, which, if exercised by AMC, in full (or in substantial part), would result in AMC beneficially owning, in the aggregate, a majority of the voting power attributable to all of the outstanding Common Stock. AMC has notified the Special Committee that it intends to exercise the AMC Warrants, in full (or in substantial part), prior to the record date of the Special Meeting and that it will vote all Common Stock owned by AMC in favor of approval of the Merger Agreement and the transaction contemplated thereby, at the Special Meeting. Accordingly, because the Merger Agreement does not require an affirmative vote of a majority of the Non-Affiliate Stockholders, upon AMC's exercise, in full (or in substantial part), of the AMC Warrants, AMC will have the requisite voting power and ability at the Special Meeting to unilaterally cause the approval of the Merger Agreement by the Stockholders (without any need for any additional votes by any other Stockholder).

Concurrently with the execution of the Merger Agreement and as a condition and inducement to Ultimate Parent's, Parent's and Merger Sub's willingness to enter into the Merger Agreement, the Johnson Entities entered into a Voting Agreement with Parent, pursuant to which, subject to certain exceptions, such Stockholders have agreed to, among other things, vote all of their respective shares of Common Stock in favor of the approval of the Merger Agreement. The shares of Common Stock subject to the Voting Agreement comprise approximately 43.5% of the issued and outstanding shares of Common Stock as of the date of this Proxy Statement (but will constitute a smaller percentage of the outstanding Common Stock once AMC exercises all or a substantial part of the AMC Warrants prior to the Record Date). The Voting Agreement will terminate upon certain circumstances, including upon termination of the Merger Agreement.

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Q.

Do any of the directors or officers of the Company have interests in the Merger that may differ from or be in addition to my interests as a Stockholder?

A.

Yes. In considering the recommendation of the Special Committee that you vote to approve the Merger Agreement, you should be aware that certain of our directors and executive officers have certain interests in the Merger that may be different from, or in addition to, your interests as a Stockholder generally. The Special Committee was aware of these interests, considered them and took them into account, together with other factors, in determining whether to approve the Merger Agreement and recommend that you vote for approval of the Merger Agreement. See " Special Factors—Interests of the Company's Directors and Executive Officers in the Merger " beginning on page [     ·     ] of this Proxy Statement.

Q.

Who will pay for this proxy solicitation?

A.

We will pay the cost of preparing, assembling and mailing this Proxy Statement, the notice of meeting and the enclosed proxy card. Our directors, officers and employees may solicit proxies in person or by telephone, mail, e-mail or facsimile. These persons will not be paid additional remuneration for their efforts. We may request banks, brokers and other custodians, nominees and fiduciaries to forward copies of the proxy materials to the beneficial owners of our Common Stock and to request authority for the execution of proxies, and we may reimburse such persons for their expenses incurred in connection with these activities.

In addition, we have retained MacKenzie Partners, Inc. to assist in the solicitation. We will pay a fee of $10,000 plus reasonable out-of-pocket expenses for their assistance. We will indemnify MacKenzie Partners, Inc. against any losses arising out of its proxy soliciting services on our behalf.

Q.

Will any other matters be voted on at the Special Meeting?

A.

As of the date of this Proxy Statement, our management knows of no other matter that will be presented for consideration at the Special Meeting other than those matters discussed in this Proxy Statement.

Q.

What is the Company's website address?

A.

Our website address is www.rljentertainment.com. We make this Proxy Statement, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act available on our website in the Investors-SEC Filings section, as soon as reasonably practicable after electronically filing such material with the SEC. Information contained on, or accessible through, our website is not a part of this Proxy Statement and is not incorporated by reference.

This information is also available free of charge at www.sec.gov, an Internet site maintained by the SEC that contains reports, proxy and information statements, and other information regarding issuers that is filed electronically with the SEC. Stockholders may also read and copy any reports, statements and other information filed by us with the SEC at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC's website for further information on its public reference room. In addition, Stockholders may obtain free copies of the documents filed with the SEC by contacting us at (301) 608-2115 or by sending a written request to RLJ Entertainment, Inc., 8515 Georgia Avenue, Suite 650 Silver Spring, Maryland 20910.

Our SEC filings are available in print to any Stockholder who requests a copy at the phone number or address listed above.

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Q.

What happens if I sell my shares of Common Stock before the Special Meeting?

A.

The Record Date for Stockholders entitled to vote at the Special Meeting is earlier than both the date of the Special Meeting and the consummation of the Merger. If you transfer your shares of Common Stock after the Record Date but before the Special Meeting, unless special arrangements (such as provision of a proxy) are made between you and the person to whom you transfer your shares and each of you notifies us in writing of such special arrangements, you will retain your right to vote such shares at the Special Meeting but will transfer the right to receive the Per Share Merger Consideration to the person to whom you transfer your shares.

Q.

What do I need to do now?

A.

Even if you plan to attend the Special Meeting, after carefully reading and considering the information contained in this Proxy Statement, please vote promptly to ensure that your shares of Common Stock are represented at the Special Meeting. If you hold your shares of Common Stock in your own name as the Stockholder of record, please vote your shares by (i) completing, signing, dating and returning the enclosed proxy card in the accompanying prepaid reply envelope, (ii) using the telephone number printed on your proxy card or (iii) using the Internet voting instructions printed on your proxy card. If you decide to attend the Special Meeting and vote in person, your vote by ballot will revoke any proxy previously submitted. If you are a beneficial owner, please refer to the instructions provided by your bank, brokerage firm or other nominee to see which of the above choices are available to you.

Q.

Should I send in my stock certificates now?

A.

No. You will be sent a letter of transmittal promptly after the completion of the Merger, describing how you may exchange your shares of Common Stock for the Merger Consideration. If your shares of Common Stock are held in "street name" by your bank, brokerage firm or other nominee, you will receive instructions from your bank, brokerage firm or other nominee as to how to effect the surrender of your "street name" shares in exchange for the Merger Consideration. Please do NOT return your stock certificate(s) with your proxy.

Q.

Who can help answer my other questions?

A.

If you have questions regarding the Special Meeting, please contact MacKenzie Partners at

1407 Broadway, 27 ^th  Floor

New York, New York 10018

(212) 929-5500 (Call Collect)

or

Call Toll-Free (800) 322-2885

Email: proxy@mackenziepartners.com

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SPECIAL FACTORS

Background of the Merger

        On August 19, 2016, the Company entered into an Investment Agreement (the " Investment Agreement ") with Parent, pursuant to which the Company agreed to (i) enter into a Credit and Guaranty Agreement with Parent (the " Credit Agreement "), pursuant to which Parent would provide to the Company a $60 million seven-year term loan and a $5 million one-year term loan and (ii) issue to Parent warrants to purchase shares of Common Stock (the " AMC Warrants ") that, if exercised in full, would provide Parent with at least 50.1% of the outstanding Common Stock (on a fully diluted basis) and, therefore, a majority of the total voting power attributable to all outstanding shares of Common Stock (the " AMC Transaction "). The AMC Warrants are exercisable, in whole or in part, at any time in Parent's discretion.

        Pursuant to the Investment Agreement, for so long as Parent owns the AMC Warrants, or any amounts remain outstanding in respect of the term loans, Parent has the right to designate two directors for election to the Board and, upon the exercise of the AMC Warrants, in full, Parent will have the right to designate a majority of the directors for election to the Board. Two such director designees of Parent currently serve on the Board. In addition, the Investment Agreement provides that the Company may not, directly or indirectly, entertain or solicit acquisition proposals, participate in any discussions or negotiations with any person regarding any acquisition proposal, provide non-public information to any person in connection with any acquisition proposal, enter into any agreement with any person relating to any acquisition proposal, grant any waiver, amendment or release under any standstill or confidentiality agreement concerning an acquisition proposal, or otherwise facilitate any effort or attempt to make an acquisition proposal. These restrictions remained in effect following the consummation of the transactions contemplated by the Investment Agreement and have been waived by Parent solely to facilitate the ability of the Company to take certain actions in respect of unsolicited Acquisition Proposals under the Merger Agreement, as described in more detail under " The Merger Agreement—Other Covenants and Agreements—No Solicitation and the Company's Fiduciary Exceptions Thereto " beginning on page [     ·     ] of this Proxy Statement.

        In connection with the Investment Agreement, holders of the Company's Series A-1, A-2, B-1 and B-2 preferred stock and holders of the 2015 Warrants exchanged their securities for shares of Preferred Stock and 2015 Warrants with revised terms. For holders of the Company's Series A-1, A-2 and B-1 preferred stock, the revised terms of their 2015 Warrants included a reduced exercise price of $1.50 per share, and for certain holders of the Company's Series B-2 preferred stock, the revised terms of their 2015 Warrants included a reduced exercise price of $2.37 per share. Also, on August 19, 2016, substantially all of the holders of the Company's Series A-1, A-2, B-1 and B-2 preferred stock and 2015 Warrants entered into Waiver Agreements with the Company, whereby they waived all payment rights, rights of acceleration or redemption and any other rights or preferences to which they were entitled that could be triggered in connection with the transactions contemplated by the Investment Agreement. In particular, under the Waiver Agreements, holders of the Company's Series A-1 and A-2 preferred stock agreed that the size of the Board could be increased in connection with AMC's right to designate directors to the Board upon the closing of the transactions contemplated under the Investment Agreement.

        Furthermore, in connection with the Investment Agreement, on August 19, 2016, the Company, Robert L. Johnson (the Company's Chairman) and certain of the Company's other directors, executives, principal stockholders and their affiliates, who in the aggregate held approximately 47% of the outstanding Common Stock as of such date, entered into a Voting Agreement with AMC (the " Voting Agreement "), pursuant to which such parties agreed to vote all of their shares of Common Stock in favor of (i) the AMC Transaction and appointed AMC as their proxy for purposes of voting on the

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AMC Transaction and (ii) from and after the consummation of the AMC Transaction, the election to the Board of the director-nominees designated by AMC.

        The issuance of the AMC Warrants and the other transactions contemplated by the Investment Agreement were approved by the holders of Common Stock at the Company's annual meeting of stockholders held on October 14, 2016. Upon consummation of the AMC Transaction, (i) the Company issued to Parent the AMC Warrants and (ii) the Company and Parent entered into the Credit Agreement (which was subsequently amended on January 30, 2017, June 16, 2017, June 5, 2018 and August 9, 2018), pursuant to which Parent provided to the Company term loans in an aggregate principal amount of $65 million (which principal amount was subsequently increased to an aggregate of $78 million), which term loans mature in tranches until the final maturity date of October 14, 2023. Pursuant to the Credit Agreement, the interest payable by the Company to Parent in respect of the outstanding term loans is payable quarterly, in arrears, in shares of Common Stock.

        The AMC investment refinanced the Company's previously existing senior credit facility, added working capital, reduced the cost of capital through lower interest rates and provided revised covenants allowing for increased operating flexibility. AMC's support and investment was intended to accelerate the Company's distribution and development of diverse content and independent films.

        In connection with the consummation of the transactions contemplated by the Investment Agreement, on October 14, 2016, Robert L. Johnson, RLJ SPAC Acquisition LLC (" RLJ SPAC "), Peter Edwards, Morris Goldfarb (collectively, the " Principal Stockholders ") and the Company entered into a Stockholders' Agreement with Parent (the " Stockholders' Agreement "), pursuant to which (i) the Principal Stockholders granted Parent certain rights of first refusal with respect to the transfer of their equity securities in the Company, (ii) the Principal Stockholders and Parent granted each other certain "tag-along" rights and "drag-along" rights with respect to certain sales by them of the Company's outstanding equity securities and (iii) the Company granted the Principal Stockholders and Parent certain preemptive rights to purchase, on a pro rata basis, equity securities of the Company in certain future offerings thereof by the Company and its wholly owned subsidiaries.

        During the period from October 2016 through [the date of this Proxy Statement], the Company has issued to Parent an aggregate of 2,277,364 shares of Common Stock in the form of interest payments due to Parent in respect of the outstanding term loans. During the same period, Parent purchased from various stockholders of the Company (i) an aggregate of 738,256 shares of Common Stock, (ii) 7,479.432 shares of Series D-1 Preferred Stock of the Company, which were convertible into 2,893,693 shares of Common Stock at the time of the purchase, and (iii) additional warrants to purchase up to an aggregate of 747,945 shares of Common Stock. In addition, during the same period, Parent, as previously noted above, added term loan debt under the Credit Agreement and partially exercised certain of the AMC Warrants and purchased 1,667,000 shares of Common Stock. Parent funded such exercise by surrendering to the Company for cancellation $5,001,000 principal amount of its outstanding term loan obligations.

        On February 26, 2018, AMC delivered a letter to the Company (which was publicly disclosed in an amendment to AMC's Schedule 13D filed with the SEC on such date), pursuant to which AMC proposed to acquire all of the outstanding shares of Common Stock not then-owned by AMC, Robert L. Johnson or any of their respective affiliates, for $4.25 per share in cash (the " Initial Proposal "). The Initial Proposal indicated that it was the intention of AMC for the Company to become a privately owned subsidiary of AMC, with a minority stake held by Mr. Johnson and his affiliates. The Initial Proposal stated that the $4.25 price indication represented a 10% premium to the closing sale price of the Common Stock as reported on Nasdaq on February 23, 2018, the last Nasdaq trading day preceding the date of the Initial Proposal, a 12% premium to the volume weighted average trading price of the Common Stock over the 10 Nasdaq trading days preceding the date of the Initial Proposal, and a 126% premium to the closing sale price of the Common Stock on the day prior to the

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public announcement of AMC's initial investment in the Company. AMC stated that it expected the Board to form a special committee of independent directors to evaluate, consider and negotiate the Initial Proposal and that Mr. Johnson and the directors of the Company nominated by AMC and its affiliates would not participate in the Company's evaluation of the proposal. The Initial Proposal was subject to AMC's satisfactory completion of business, financial and legal due diligence, and AMC stated that it was interested only in acquiring the publicly held (non-affiliate) shares of the Company and would not sell its equity stake in the Company to any third party or participate in any other transaction process.

        AMC retained Citigroup Global Markets Inc. ("Citi") as its financial advisor in connection with the delivery of the Initial Proposal and its consideration of the proposed going-private merger transaction. AMC selected Citi because it is an internationally recognized investment banking firm that has substantial M&A advisory experience, including in the media and telecommunications industries, and because of the firm's longstanding relationship as a financial advisor to AMC. Citi also served as AMC's financial advisor in connection with the AMC Transaction. Over the course of AMC's consideration of the proposed going-private merger transaction, periodically following the closing of the AMC Transaction until the signing of the Merger Agreement, AMC discussed with representatives of Citi certain performance metrics with respect to the Company—including the Company's historical price performance, recent earnings and summary financials—as well as valuation information with respect to the Company for purposes of AMC's consideration of an appropriate per share purchase price, and Citi provided materials to AMC in connection with these discussions on September 12, 2017, October 24, 2017, February 26, 2018, April 20, 2018, May 2, 2018, July 27, 2018 and July 28, 2018. None of these discussion materials related to the fairness of the consideration provided for in the Merger Agreement to the Non-Affiliate Common Stockholders.

        Also on February 26, 2018, Robert L. Johnson, RLJ SPAC and The RLJ Companies, LLC (collectively, the " RLJ Companies ") filed an amendment to their Schedule 13D, in which they disclosed that Mr. Johnson had reached an agreement-in-principle with AMC with respect to certain liquidity and corporate governance matters and his role at the company following the consummation of the transaction contemplated by the Initial Proposal, if it occurs.

        Later that same day, the Board held a telephonic meeting that was attended by all members of the Board and a representative of Arent Fox LLP (" Arent Fox "), outside counsel to the Company and Mr. Johnson, to consider and appoint a special committee of independent directors to address the Initial Proposal. Following discussion, the Board determined to appoint a special committee comprised entirely of independent directors to review, consider, evaluate and negotiate the Initial Proposal. It was determined that Messrs. Laszlo and Royster—who (other than in their capacity as directors of the Company) had no commercial, financial or business affiliations or relationships with any of AMC, Robert L. Johnson or any of their respective affiliates and (other than certain annual grants of equity awards and quarterly cash compensation payments made by the Company to all non-employee directors of the Company) had no material pecuniary interests in the going-private merger transaction contemplated by the Initial Proposal—qualified as independent and disinterested directors. Accordingly, the Board resolved to constitute Messrs. Laszlo and Royster as the exclusive members of a special committee of independent and disinterested directors (the " Special Committee ") with the authority to evaluate the Initial Proposal, to negotiate directly with AMC and the holders of Preferred Stock and warrants with respect to the Initial Proposal and to approve or disapprove (i.e., "say no" to) any transaction proposed by AMC. The Board also authorized the Special Committee to retain independent legal counsel and financial advisors at the Company's expense.

        On February 27, 2018, the Company issued a press release announcing the appointment of the Special Committee to consider, review and evaluate the Initial Proposal.

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        Also on February 27, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee. The Special Committee discussed its plan and timetable for identifying, interviewing and ultimately retaining qualified independent professional advisors to assist the Special Committee in connection with a potential transaction with AMC. The members of the Special Committee discussed their respective relationships with well-regarded, national law firms specializing in public M&A transactions of a nature similar to the going-private transaction proposed by AMC, as well as their relationships with well-regarded financial advisory/investment banking firms with a history of executing such transactions in the media and telecommunications industry. The Special Committee established a timetable over the following two weeks to interview and select a team of independent professional advisors and outlined its plan to identify and elicit the background information needed from independent legal and financial advisor candidates, formulate and script questions to ascertain that information, establish the overall criteria for evaluating candidates, and interview a number of highly-qualified law firms and financial advisory/investment banking firms.

        On February 28, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee. The Special Committee discussed its role in view of the authority granted to the Special Committee by the full Board with respect to the Initial Proposal, as well as its fiduciary obligations in connection therewith and in view of the stock ownership, creditor and other controlling interests in the Company held by AMC, Robert L. Johnson and their respective affiliates. The Special Committee also discussed the need to identify and engage independent professional advisors with no current or recent past relationships or other affiliations with the Company, AMC or Mr. Johnson to assist the Special Committee with valuing the Company and, if the Special Committee deemed it appropriate to pursue a going-private merger transaction with AMC, to structure such potential transaction, negotiate the price and other terms of a potential transaction, prepare and negotiate transaction documents, conduct due diligence and execute such transaction.

        During the period from February 28, 2018 to March 10, 2018, the Special Committee interviewed six prominent law firms. At the conclusion of such interview process, the Special Committee determined to engage international law firm, Greenberg Traurig, LLP (" Greenberg Traurig "), as its independent legal counsel. In selecting Greenberg Traurig, the Special Committee considered, among other things, the firm's overall reputation and deal execution experience and, specifically, the reputation, qualifications and significant public company M&A experience of the M&A partner leading the Greenberg Traurig deal team who interviewed with the Special Committee. The Special Committee also considered the fact that Greenberg Traurig previously represented, on a one-off basis, RLJ Acquisition, Inc., a special purpose acquisition company (SPAC) controlled by Robert L. Johnson, in connection with the acquisition by RLJ Acquisition, Inc. of Image Entertainment, Inc. and Acorn Media Group, Inc. in 2012, which transaction resulted in the creation of the Company. The Special Committee concluded that, in view of the fact that, since the consummation of such acquisition, Greenberg Traurig did not perform any continuing work for the Company or for Robert L. Johnson or any of his affiliates, the prior (six-year old) relationship with Mr. Johnson would not impair Greenberg Traurig's ability to serve as independent legal counsel to the Special Committee in connection with the Initial Proposal and the transactions contemplated thereby. It was also noted that Greenberg Traurig had no recent or current M&A advisory or other engagement relationship with AMC or any of its affiliates.

        During the same approximately two-week period, the Special Committee also interviewed seven prominent financial advisory/investment banking firm candidates. At the conclusion of such interview process, the Special Committee engaged Allen & Company LLC (" Allen & Co .") as its financial advisor to assist in connection with the Special Committee's review and evaluation of the Initial Proposal, including a financial valuation by Allen & Co. of the Company. The Special Committee

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selected Allen & Co. based upon such firm's experience and reputation as a leading independent financial advisory firm regularly engaged to provide M&A advisory services in connection with transactions similar to the going-private transaction proposed by AMC, as well as its specialization in the media and telecommunications sector. The Special Committee also considered the qualifications and significant public M&A transaction experience of the senior managing director leading the Allen & Co. deal team who interviewed with the Special Committee. The Special Committee also noted that, in 2012, Allen & Co. had represented Acorn Media Group, Inc. in the sale of such business to the Company. The Special Committee determined that in view of the fact that Allen & Co. was adverse to the Company, Robert L. Johnson and his affiliates in such transaction and had no advisory or engagement relationship in the past two years with AMC, Robert L. Johnson or any of their respective affiliates, such prior sale engagement with Acorn TV would not impair Allen & Co.'s independence regarding the proposed going-private merger transaction between the Company and AMC. The Special Committee also considered Allen & Co.'s familiarity with Acorn TV and the Company's business a positive factor with respect to its decision to hire Allen & Co.

        On March 16, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. Greenberg Traurig provided a presentation on the fiduciary duties of the members of the Special Committee, both generally and in the context of the transactions contemplated by the Initial Proposal. It was noted that the Special Committee was constituted to function as the exclusive bargaining agent and guardian of the investment interests of the Non-Affiliate Common Stockholders. Greenberg Traurig and Allen & Co. also discussed the anticipated due diligence process, including the scope and nature of information that Greenberg Traurig and Allen & Co. would need to review in order to assess the Company's intrinsic value and understand the Company's business segments, the execution risks of management's business plan, competition in the sector, the Company's prospects, the Company's organizational and capital structure, the impact of the proposed going-private merger transaction on certain Company contracts and obligations, and a variety of related issues and considerations. The anticipated due diligence that AMC was expected to perform was also discussed.

        At the Special Committee's request, Greenberg Traurig also addressed the provisions contained in the respective certificates of designation for the outstanding Preferred Stock that would be implicated by the transactions contemplated by the Initial Proposal. In consultation with Greenberg Traurig, the Special Committee determined that it would be appropriate to amend the February 26, 2018 Board resolutions establishing the Special Committee to delete the current mandate regarding the Special Committee's negotiation of the proposed AMC transaction with the Company's preferred stockholders (in that their rights were preexisting and wholly contractual and outside the context of the Special Committee's fiduciary obligations) and to make certain other clarifications regarding the Special Committee's authority, function and role in respect of any potential transaction with AMC and its affiliates. Additionally, it was determined that the Special Committee should seek to obtain authority to explore alternative strategic transactions, including the solicitation of potential third-party buyers and business combination candidates who may be interested in pursuing a transaction with the Company and its controllers, and to obtain from AMC in connection therewith, any necessary waivers of the restrictions on such solicitation activities currently prohibited by the terms of the no-shop covenant in the Investment Agreement. Following further discussion, the Special Committee requested that Greenberg Traurig prepare a draft of amended and restated resolutions establishing the Special Committee to be presented to the full Board for discussion and consideration.

        After the representatives of Allen & Co. left the meeting, Greenberg Traurig also discussed with the Special Committee the terms of Allen & Co.'s draft engagement letter. The Special Committee authorized Greenberg Traurig to work with Allen & Co.'s outside counsel to finalize the terms of the engagement letter.

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        At the meeting, the Special Committee also discussed proposed compensation for the members of the Special Committee for the work they would be required to perform in respect of evaluating, negotiating and determining whether to pursue the Initial Proposal or any alternative transaction with AMC or otherwise. Various compensation methodologies were discussed, with Greenberg Traurig noting that there could be no compensation payable upon consummation of a transaction or based on the outcome of any transaction process with AMC or the terms thereof, and that instead, any compensation should be structured as fixed monthly payments, subject to an aggregate monetary cap. Following discussion, the Special Committee determined to request from the full Board its authorization for the Company to pay to each member of the Special Committee compensation, as follows: $25,000 payable as of March 5, 2018, $25,000 payable as of April 5, 2018, $10,000 payable on the fifth day of each month thereafter commencing on May 5, 2018, subject to a monetary cap of $100,000.

        On March 19, 2018, the Special Committee and Allen & Co. executed an engagement letter, pursuant to which the Special Committee formally retained Allen & Co. as financial advisor to the Special Committee in connection with the Initial Proposal and any alternative potential transaction with AMC.

        Later that same day, the Company issued a press release announcing that the Special Committee had retained Allen & Co. as its financial advisor and Greenberg Traurig as its legal counsel to assist the Special Committee in connection with its consideration, review, evaluation and negotiation of the Initial Proposal and any alternative potential transaction with AMC.

        On March 20, 2018, Sullivan & Cromwell LLP (" S&C "), legal counsel to AMC, delivered to Greenberg Traurig an initial comprehensive due diligence request list in connection with AMC's proposed due diligence review of the Company.

        On March 29, 2018, a draft of the proposed resolutions prepared by Greenberg Traurig at the request of the Special Committee to amend and restate the authority of the Special Committee consistent with the changes discussed during the March 16, 2018 meeting of the Special Committee was distributed to all members of the Board for adoption by unanimous written consent without a meeting.

        Later that same day, the Special Committee received a letter signed by Mr. John Hsu, a senior executive of AMC and a member of the Board nominated by AMC, in response to the request that he received in his capacity as a director of the Company to execute the unanimous written consent to amend and restate the authority of the Special Committee. In the letter, Mr. Hsu reiterated on behalf of AMC that, as stated in the Initial Proposal delivered by AMC to the Company on February 26, 2018 (and as publicly disclosed in AMC's amendment to Schedule 13D), AMC would not support a transaction to sell the Company to any party, at any price, or support any other strategic transaction involving the Company. The letter stated that if Special Committee were to explore other strategic transaction alternatives (i.e., "shop the Company"), doing so would be an exercise in futility, given AMC's beneficial ownership (assuming the exercise, in full, of the AMC Warrants) of more than 50% of the Company's total outstanding voting power, the Company's preexisting no-shop covenant in effect under the Investment Agreement and AMC's status as lender for all of the Company's outstanding senior debt. The letter also reiterated that AMC would negotiate only with the Special Committee in respect of the Initial Proposal, and that holders of the Preferred Stock would be paid consideration based on the value paid by AMC for the Common Stock, calculated in accordance with the formula therefor set forth in the certificates of designation for the various outstanding series of the outstanding classes of Preferred Stock.

        On April 2, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. The Special Committee discussed the upcoming meeting of the Board scheduled for April 3, 2018, which was called at the request of the Special

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Committee to consider, among other things, the proposed resolutions to amend and restate the authority of the Special Committee. The Special Committee also discussed the letter received from AMC on March 29, 2018, in which AMC made clear that it was only a buyer of the Company and not a seller.

        Greenberg Traurig provided an overview of the fiduciary duties of the Special Committee members, both generally and in the context of a potential transaction with AMC. Following discussion, the Committee members determined that in light of AMC's reiterated statement that it was only a buyer of the Company and the Company's previously agreed to no-shop covenant contained in the Investment Agreement, it would not be productive for the Special Committee to conduct a market check of the Company. Moreover, in view of the fact that AMC's position on these matters had been publicly disclosed in its amendment to Schedule 13D, it was determined that there was essentially no likelihood that alternative transaction candidates would surface or be interested, willing or able to submit alternative (or competing) transaction proposals. The Special Committee also discussed with its advisors the due diligence process to be conducted by Allen & Co. and Greenberg Traurig and the anticipated scope and timing thereof, as well as the anticipated due diligence review to be conducted by AMC and its representatives. The Special Committee directed Allen & Co. to complete its preliminary valuation of the Company prior to providing AMC full due diligence access to certain non-public Company information. It was further noted that the Special Committee considered the Initial Proposal as merely an "opening bid" and invitation to negotiate and that such price was materially inadequate and not a sufficient basis upon which the Special Committee would proceed to negotiate the overall terms and documentation for a transaction.

        On April 3, 3018, the full Board held a special meeting to consider the request from the Special Committee to amend and restate the authority granted to it by the Board and to discuss the letter from Mr. John Hsu to the Special Committee received on March 29, 2018. The Board discussed the proposed resolutions prepared by Greenberg Traurig at the request of the Special Committee. Following discussion, in view of Mr. Hsu's letter to the Special Committee reiterating that AMC would not support a transaction to sell the Company to any third party, at any price, or support any alternative strategic transaction, and AMC's affirmative statement that were the Special Committee to seek to explore other strategic alternatives such undertaking would be an exercise in futility, the Board determined not to approve any changes to the resolutions regarding the Special Committee's ability to shop the Company and explore strategic alternatives and directed Arent Fox to communicate the Board's views with Greenberg Traurig. The Board conceptually agreed to all of the other changes and clarifications regarding the Special Committee's authority, function and role set forth in the resolutions prepared by Greenberg Traurig. AMC's designated directors recused themselves from the foregoing discussion.

        On April 4, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. The Special Committee discussed the events that took place at the full Board meeting held on April 3, 2018. Representatives of Greenberg Traurig reported that they had discussed these matters with Arent Fox. The Special Committee discussed with Allen & Co. and Greenberg Traurig the anticipated timing of receipt from Allen & Co. of its preliminary financial valuation analysis of the Company. The Special Committee also discussed the anticipated timing of furnishing to Citi access to management's five-year base case financial forecasts and assumptions and communicating to AMC the Special Committee's view that the proposed purchase price of $4.25 per share set forth in the Initial Proposal materially undervalued the Common Stock and was not an acceptable basis upon which to proceed with a substantive discussion and negotiation of overall deal terms or the preparation and negotiation of any transaction documents. It was noted that such base case forecasts were prepared for internal budget and financial planning purposes only and, to that extent, were somewhat aggressive in nature. It was further noted that AMC's designated directors,

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including Mr. John Hsu, had already received from management and reviewed such base case forecasts in their capacity as directors of the Company.

        The Special Committee instructed Allen & Co. to discuss with management whether a more reliable and alternative set of five-year financial forecasts should be prepared by management that would better address the risks inherent in the execution of management's business plan. In the following weeks, Allen & Co. discussed with members of management potential adjustments to be made to the base case projections to assemble management's adjusted case financial forecasts for 2018-2022. Allen & Co. communicated to the Company's management the Special Committee's concerns that the growth projections for certain new initiatives of the Company might be difficult to achieve on the anticipated timetables. Based upon these discussions, management began considering and incorporating certain business plan adjustments to its base case forecast, applying more conservative revenue growth and paid-subscriber growth rate estimates and related cost assumptions.

        The Special Committee next discussed the anticipated process for providing to AMC and its advisors access to the Company's other non-public information. Representatives of Greenberg Traurig stated that they would contact each of S&C and Arent Fox regarding proposed amendments to the Non-Disclosure Agreement, dated as of October 14, 2016 (the " Non-Disclosure Agreement "), previously entered into by the Company and Rainbow Media Holdings, LLC, a wholly owned subsidiary of AMC, to expand the scope of such agreement, and the overall process by which the Special Committee was prepared to provide to AMC due diligence access to the Company and its management team.

        On April 5, 2018, Allen & Co. had a telephone conversation with Citi during which, as instructed by the Special Committee, Allen & Co. informed Citi that the purchase price of $4.25 per share proposed by AMC in the Initial Proposal significantly undervalued the Common Stock and, therefore, such price indication did not provide a sufficient basis upon which the Special Committee would commence substantive discussions and negotiations of a potential transaction, and that the Special Committee would consider engaging in such a process only if AMC submitted a "meaningfully higher offer." Accordingly, at the Special Committee's direction, Allen & Co. indicated to Citi that the Special Committee would permit AMC to begin its financial due diligence so it could revert to the Special Committee with a meaningfully higher price proposal for consideration by the Special Committee.

        Later that same day, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. Allen & Co. reported the substance of its conversation with representatives of Citi. Representatives of Greenberg Traurig also updated the Special Committee regarding their recent conversations with representatives of S&C regarding the rights of the Company's preferred stockholders in the case of a "Change of Control" and a "Fundamental Transaction" (as such terms are defined in the certificates of designation governing the outstanding classes of Preferred Stock) and with respect to Greenberg Traurig's proposed amendments to the Non-Disclosure Agreement.

        On April 6, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. Allen & Co. reviewed with the Special Committee management's quarterly cash flow projections as of March 31, 2018 that were recently provided to AMC in the Company's electronic data room. It was noted that such projections were provided by management to the full Board, including AMC's designated directors in their capacity as such. The Special Committee discussed with Allen & Co. and Greenberg Traurig the impact, if any, that the Company's failure to maintain the Minimum Cash Balance requirement under the Credit Agreement (as defined therein) could have on the Company's ability to timely and successfully execute on its current business plan and achieve management's base case forecasts.

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        On April 7, 2018, Mr. Royster, a member of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co., participated in a telephone conference. Mr. Laszlo, the other member of the Special Committee, was not available to participate in the call. Allen & Co. provided an update on its recent discussions with Miguel Penella, Chief Executive Officer of the Company, regarding the Company's ability to maintain the Minimum Cash Balance requirement under the Credit Agreement (as defined therein), in which Mr. Penella advised Allen & Co. that he was closely monitoring the Company's cash position and attempting to spread out the timing of the payment of certain expenses given the risk of the Company not complying with the Minimum Cash Balance requirement under the Credit Agreement. He noted that as of March 31, 2018, the Company's cash on hand was in excess of the cash projections for the fiscal quarter ended March 31, 2018 contained in management's 2018 base case forecast.

        On April 9, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. The Special Committee discussed, among other things, convening, at the request of the holders of the Preferred Stock, a meeting with such holders solely to receive their views with respect to the implied value of the Common Stock and the Company's overall performance prospects. It was noted that the purpose of such meeting was for the Special Committee members to be in "listening mode" only, that the rights of the holders of Preferred Stock in respect of a Change of Control or a Fundamental Transaction were preexisting and solely contractual in nature, that the holders of Preferred Stock had no right to vote on any proposed merger transaction, and that, if the Special Committee determined to pursue a transaction with AMC, the Special Committee's fiduciary obligations were owed exclusively to the Non-Affiliate Common Stockholders. Representatives of Greenberg Traurig also reported on their negotiations with S&C regarding proposed amendments to the Non-Disclosure Agreement, including the need for a "clean team" agreement to withhold from AMC and quarantine certain digital programming business segment information that the Company deemed highly sensitive, competitive and proprietary. The nature of such sensitive information had been previously discussed among representatives of Greenberg Traurig, the Company's Chief Executive Officer and the Company's in-house counsel.

        On April 10, 2018, the full Board, acting by unanimous written consent in lieu of a meeting (which consent was previously circulated to entire Board for their review and execution), formally adopted revised resolutions prepared by Greenberg Traurig to amend and restate the authority of the Special Committee to, among other things, (i) clarify the Special Committee's authority to consider, negotiate and approve alternative transactions with AMC (and not just the price and other terms set forth in the Initial Proposal) and (ii) eliminate any requirement to negotiate any proposed AMC transaction on behalf of and with the holders of the outstanding Preferred Stock (which the Special Committee believed was inappropriate in view of its function as bargaining agent solely for the Non-Affiliate Common Stockholders). The revised resolutions stated that the Special Committee is granted the full and plenary authority and power of the full Board under NRS 78125.1 with respect to the AMC Proposal or any alternative transaction with AMC. Pursuant to NRS 78125.1, this authority includes, among other things, authority to make the disclosures and filings required by Schedule 13E-3 on behalf of the Company, including a determination as to the fairness of any such transaction to the Non-Affiliate Common Stockholders.

        On April 13, 2018, the Company and an affiliate of AMC executed the proposed amendment to the Non-Disclosure Agreement. In addition, the Company and AMC entered into a Clean Team Non-Disclosure Agreement dated as of April 13, 2018 (the " Clean Team Agreement "), pursuant to which the Company agreed to grant AMC's outside professional advisors and certain designated (permitted) employees of AMC limited and restricted access to certain highly competitive, sensitive, proprietary and confidential information, upon the terms and in accordance with the procedures set forth in the Clean Team Agreement.

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        On April 14, 2018, Allen & Co. delivered to Citi a five-year base case financial forecast for the Company for fiscal years 2018-2022 prepared by the Company's management, together with associated assumptions for such forecast period and supplemental financial and operating information provided by the Company's management. Allen & Co. subsequently delivered to Citi an updated base case financial forecast for the Company for fiscal years 2018-2022 prepared by the Company's management, which reflected an updated forecast for Agatha Christie Ltd. as well as the Company's actual Q1 2018 performance. The Company's adjusted case financial forecast, once prepared, was not provided to AMC or its representatives prior to execution of the Merger Agreement.

        Also on April 14, 2018, certain designated employees of AMC and its outside professional advisors were granted access to certain confidential materials of the Company via a virtual data room.

        On April 18, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. Allen & Co. reported on certain pending information necessary for its preliminary financial valuation analysis of the Company. Representatives of Allen & Co. also reported that Citi's representatives inquired whether the Special Committee would be willing to provide AMC with "price guidance" (in the form of a specific counter-proposal to AMC's $4.25 opening bid price) but that, as instructed by the Special Committee, Allen & Co. declined to do so and reiterated to Citi that AMC's price indication of $4.25 per share substantially undervalued the Common Stock, and that AMC should complete its financial due diligence and analysis of management's five-year forecasts and growth plan.

        On April 25, 2018, representatives of AMC and Citi convened a telephonic conference with members of the Company's senior management, in which they discussed the base case forecast and certain other items relating to AMC's financial due diligence.

        On April 26, 2018, Mr. Dayton Judd and Mr. John Ziegelman (representing the preferred stockholders of the Company), Mr. Laszlo and Allen & Co. convened a telephonic conference in which Mr. Judd and Mr. Ziegelman expressed their views, on behalf of the Company's preferred stockholders, as to appropriate valuation multiples for companies such as the Company.

        On May 2, 2018, representatives of Allen & Co. and Citi held an in-person meeting at Allen & Co.'s offices, at which Citi presented its financial valuation analysis of the Company and stated that AMC would be willing to pay $4.92 per non-affiliate share of Common Stock, subject to the completion of AMC's business, financial and legal due diligence.

        Later that same day, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. The Special Committee and its financial and legal advisors discussed AMC's increased price indication of $4.92 per share (the " Increased Price "). Allen & Co. also presented to the Special Committee its preliminary financial valuation analysis of the Company, including summaries of background and economics of the transaction as well as an overview of the Company.

        On May 4, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. The Special Committee and such advisors continued their discussion of the Increased Price, including the impact of the Company's results of operations for the fiscal quarter ended March 31, 2018 on the implied value of the Common Stock. The Special Committee concluded that the Increased Price materially undervalued the Common Stock and, therefore, was inadequate. The Special Committee instructed Allen & Co. to advise Citi that the Increased Price materially undervalued the Common Stock and, therefore, it was substantially below the price per share at which the Special Committee would be willing to engage in a process to

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negotiate the overall terms of a possible going-private merger transaction with AMC. Greenberg Traurig discussed the Special Committee's fiduciary duties in the context of the proposed transaction process and reiterated that the Special Committee had full authority to just "say no" and reject any transaction proposed by AMC if the Special Committee did not believe that such transaction was advisable, fair to and in the best interests of the Non-Affiliate Common Stockholders.

        On May 7, 2018, Allen & Co. and Citi convened a telephonic conference to further discuss the Increased Price and AMC's possible acquisition of the outstanding non-affiliate shares of Common Stock. Allen & Co. also communicated the Special Committee's position on the Increased Price to Citi.

        On May 9, 2018, the Board held a meeting at which the Special Committee provided an update on the Increased Price. AMC's designated directors recused themselves from the meeting.

        On May 12, 2018, Allen & Co. and Citi convened a telephonic conference to discuss the various valuation and financial assumptions underlying the base case forecast and Citi's internal adjustments to the base case forecast.

        On May 15, 2018, Mr. Andor Laszlo, a member of the Special Committee, met in person in New York City with Mr. John Hsu, one of AMC's designated directors and AMC's lead negotiator for a possible transaction, to discuss the Increased Price. Mr. Hsu communicated AMC's view on the Company's financial prospects, business execution risks and the implied value of the Common Stock. Mr. Hsu expressed some concern that a protracted transaction process could adversely impact the business of the Company, due principally to management distraction. Mr. Laszlo and Mr. Hsu also discussed the Company's operating performance for the fiscal quarter ended March 31, 2018, as compared to management's estimates for such fiscal quarter, the Company's Q2 performance trend to date and the Company's anticipated performance for the remainder of 2018. Mr. Hsu stated that he would like to meet again in the near-term with both members of the Special Committee to try to reach an agreement on price, and he indicated a willingness to consider a further increase to the Increased Price (although such potential increase was not quantified). Mr. Laszlo indicated that he would set up the next meeting.

        On May 16, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. Mr. Laszlo reported the discussion that he had with Mr. Hsu during their in-person meeting on May 15, 2018, including Mr. Hsu's desire to meet in person with both members of the Special Committee to try to reach an agreement on a further increased price. It was agreed that the Special Committee members would meet with Mr. Hsu to learn of such further price increase in order to seek to obtain the highest price and best overall deal terms attainable for the Non-Affiliate Common Stockholders. The Special Committee further reviewed management's five-year base case and adjusted case financial forecasts for 2018-2022 and the preliminary financial valuation analyses of the Company previously provided to the Special Committee by Allen & Co. on May 2, 2018. The Special Committee noted that management's adjusted case forecasts presented a more realistic and reliable estimate of revenue growth and paid-subscriber growth rates in relation to management's more aggressive base case forecasts, especially in the post-2018 forecast years. The Special Committee next consulted with Allen & Co. and Greenberg Traurig regarding messaging strategies and the Special Committee's views on the implied value of the Common Stock and concluded that the Special Committee would inform Mr. Hsu in advance of the next in-person meeting that it would be very difficult for the Special Committee to proceed with the negotiation and documentation of a potential transaction unless AMC's price exceeded $6.00 per share, and that the Special Committee would need to obtain a firm price per share that was not subject to any reduction based on AMC's completion of business, financial and legal due diligence.

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        On May 17, 2018, Mr. Andor Laszlo, a member of the Special Committee, had a telephone conversation with Mr. John Hsu and advised Mr. Hsu that it would be very difficult for the Special Committee to support any potential going-private merger transaction with AMC unless AMC's price was at least $6.00 per share. Mr. Laszlo further informed Mr. Hsu that the Special Committee required a firm price per share that was not subject to any reduction based on AMC's completion of business, financial and legal due diligence. Mr. Hsu indicated that he looked forward to meeting in-person with both members of the Special Committee.

        On May 21, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. The Special Committee further discussed with Allen & Co. various methodologies for the implied valuation of the non-affiliate shares of Common Stock in connection with the impending in-person meeting between the Special Committee and Mr. John Hsu of AMC. The Special Committee also discussed the lack of any viable strategic and financial alternatives currently available to the Company by reason of AMC's ability to acquire majority voting control of the Company through the exercise in full, at any time in its discretion, of the AMC Warrants, as well as AMC's previous private and publicly disclosed statements that it was only a buyer (and not a seller) of the Company and the inability of the Special Committee as a practical matter to "shop" the Company to potential third-party buyers and business combination candidates. Greenberg Traurig also discussed the Special Committee's fiduciary duties in undertaking a cash-out merger of the Company's minority (public) stockholders in lieu of a decision to continue the execution of management's business plan and operating strategy as a controlled company. Discussion continued with respect to the likely impact on the price of the Common Stock if a proposed transaction with AMC was publicly withdrawn, and the historical illiquidity of the Common Stock.

        On May 22, 2018, the members of the Special Committee attended an in-person meeting in New York City with Mr. John Hsu, who noted that he had been given full authority by AMC to negotiate price with the Special Committee. After discussion regarding the Company's business, historical performance and prospects, as well as conditions in the industry, Mr. Hsu indicated that AMC was prepared to offer $5.95 per share of Common Stock (representing an increase of $1.70 per share and 40% over the Initial Proposal). Messrs. Laszlo and Royster informed Mr. Hsu that, as previously indicated to him, the Special Committee would not proceed with the negotiation of an overall transaction unless AMC's price offer was at least $6.00 per share and, therefore, they rejected AMC's $5.95 offer. After some further discussion, Mr. Hsu offered $6.00 per share, and Messrs. Lazslo and Royster left the meeting to consider the same and the meeting was adjourned.

        When the meeting resumed, and following further discussion of the Company's business and prospects and further negotiation of price, Messrs. Lazslo and Royster informed Mr. Hsu that they would be prepared to accept a price of $6.25 per share. After some further discussion, Mr. Hsu agreed to offer $6.25 per share, subject to completion of due diligence and the preparation and negotiation of definitive merger documentation and the negotiation by AMC of various post-closing arrangements with Robert L. Johnson. Messrs. Laszlo and Royster then informed Mr. Hsu that such $6.25 per share price must be firm and not be subject to reduction based on the completion of AMC's remaining business, financial and legal due diligence investigation of the Company. Mr. Hsu agreed that such price was a firm offer price, and the Special Committee informed Mr. Hsu that it would authorize its counsel to commence working with S&C on the preparation and negotiation of definitive merger documentation for the proposed transaction. Mr. Hsu indicated that he would similarly instruct S&C. The participants acknowledged that while the price of $6.25 per share had been agreed as a firm price, there could be no agreement to proceed with a transaction until definitive agreements were negotiated and finalized. Mr. Lazlo also disclosed to Mr. Hsu that Mr. Penella had informed him that compliance with the Minimum Cash Balance requirement under the Credit Agreement (as defined therein) was becoming more difficult to maintain given the expenses incurred in connection with the proposed

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transaction, and as a result, the Company was delaying certain vendor payments in order to maintain compliance.

        Later on the same day, the Special Committee held a meeting at Allen & Co.'s offices in New York City that was attended in-person by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Allen & Co. Representatives of Greenberg Traurig participated in the meeting by telephone. Messrs. Laszlo and Royster reported the results of their in-person meeting with Mr. John Hsu earlier that day. Representatives of Greenberg Traurig informed the Special Committee that they would contact S&C to coordinate an action plan and to assign various work stream responsibilities to the parties.

        On May 23, 2018, the Board held a meeting at which the Special Committee provided an update on the results of their in-person meeting with Mr. Hsu on the previous day. AMC's designated directors recused themselves from the Board meeting.

        On May 24, 2018, S&C delivered to Greenberg Traurig an updated business, financial and legal due diligence request list in connection with AMC's due diligence review of the Company.

        On May 25, 2018, the Special Committee held a telephonic meeting attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. The Special Committee and Greenberg Traurig discussed the anticipated timeline for the proposed transaction as well as the impact of the proposed transaction on certain provisions of the certificates of designation for the various outstanding classes of the Preferred Stock and on other outstanding contractual and other obligations of the Company. Representatives of Greenberg Traurig also outlined for the Special Committee certain anticipated key subject matter areas of the draft merger documentation that would be the subject of considerable negotiation.

        On May 27, 2018, at the direction of the Special Committee, Allen & Co. sent certain additional due diligence materials to Citi in response to AMC's financial and business due diligence requests.

        On May 31, 2018, S&C delivered to Greenberg Traurig an initial draft of the Merger Agreement proposed to be entered by the parties in connection with the proposed going-private merger transaction.

        Also on May 31, 2018, the Company provided AMC and its advisors with further access to confidential materials via the virtual data room, including certain segregated information for "clean team" access only.

        On June 5, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. The Special Committee and its legal and financial advisors discussed the proposed deal structure and other issues presented by the draft Merger Agreement delivered by S&C on May 31, 2018, including, among other things, the absence of a condition to closing requiring approval of the Merger Agreement by the holders of a majority of the outstanding non-affiliate shares of the Common Stock. Greenberg Traurig explained the genesis, nature, use and legal and commercial impact of imposing such conditions in controller take-private merger transactions involving Delaware corporations (noting that those are useful, although not dispositive, reference points for transactions involving companies incorporated in Nevada, such as the Company) and indicated that it would include such a condition in its response (revised) draft of the Merger Agreement to be distributed to S&C and AMC. Greenberg Traurig also discussed the equity rollover component of the proposed transaction that AMC would need to definitively negotiate with Robert L. Johnson (and his affiliated entities) prior to the signing of a definitive Merger Agreement. Greenberg Traurig further noted that the initial draft of the Merger Agreement distributed by S&C suggested that AMC would require a voting and support agreement, whereby Mr. Johnson and his controlled affiliates would be obligated to affirmatively vote all of their shares of Common Stock "for" approval of the

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Merger Agreement and to grant to AMC an irrevocable proxy to secure such voting obligations. Greenberg Traurig next discussed the issues that typically arise in connection with such support agreements, including the termination provisions thereof, and the impact of the irrevocable proxy with respect to certain of Nevada's anti-takeover laws. Greenberg Traurig also outlined for the Special Committee the "deal protection package" and "fiduciary out" (including fiduciary termination and termination fee) provisions included in S&C's draft of the Merger Agreement. Greenberg Traurig then addressed the circumstances in which the Special Committee could withdraw its recommendation of the Merger Agreement and terminate the Merger Agreement, noting that the AMC draft did not provide for the ability of the Special Committee to withdraw its recommendation in the case of a so-called "intervening event" (not constituting a superior proposal) and that Greenberg Traurig would include such provisions in its response (revised) draft of the Merger Agreement. Greenberg Traurig also discussed the provisions relating to the termination fee that would be payable by the Company in the event of a fiduciary termination of the Merger Agreement and provided an overview of the Company's representations and warranties and the definition of Material Adverse Effect, as proposed in the AMC draft of the Merger Agreement, including the scope of such provisions and their interrelationship with the closing conditions and termination provisions in the Merger Agreement. The Special Committee and its advisors also discussed AMC's financing representations, the fact that AMC was a party to the draft Merger Agreement solely in the capacity as guarantor of Parent's and Merger Sub's payment obligations, and the Company's covenants regarding convening the special meeting of stockholders to vote on the proposed Merger Agreement and filing a proxy statement and soliciting votes for the special meeting. The parties' mutual cooperation covenants, and the Company's covenant to cooperate with AMC in seeking a replacement credit facility were also discussed. Greenberg Traurig also described certain key definitions used throughout the Merger Agreement. The Special Committee and its advisors then discussed the anticipated timing for negotiating the Merger Agreement and the status of the due diligence investigation being conducted by AMC and its advisors, which Greenberg Traurig referred to as comprehensive and not confirmatory.

        Also on June 5, 2018, Greenberg Traurig convened a telephone conference with S&C regarding its initial observations and reactions to the draft Merger Agreement and the status of AMC's continuing business, financial and legal due diligence investigation of the Company.

        Also on June 5, 2018, in response to the concern expressed by Mr. Lazlo on May 22, 2018, the Company and Parent entered into the Third Amendment to the Credit Agreement, effective as of May 31, 2018, to reduce the Minimum Cash Balance (as defined in the Credit Agreement) from $3,500,000 to $2,000,000 for the period commencing June 1, 2018 and continuing through September 30, 2018.

        On June 7, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. The Special Committee further discussed the draft Merger Agreement delivered by S&C on May 31, 2018. The Special Committee also discussed the status of due diligence being conducted by AMC and its advisors.

        On June 12, 2018, Greenberg Traurig delivered to S&C its revised (second) draft of the Merger Agreement.

        On June 13, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. Greenberg Traurig provided a formal presentation to the Special Committee with respect to various open issues and negotiating positions taken in response to the initial draft of the Merger Agreement delivered by S&C on May 31, 2018, including, among other things: (i) the definitions of Acquisition Proposal, Change of Recommendation, Intervening Event, Material Adverse Effect and Superior Proposal (all of which relate to the

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Company's ability to respond to, investigate and take certain actions in respect of an unsolicited alternative acquisition proposal, the circumstances in which the Special Committee can change or withdraw its recommendation of the Merger Agreement, and the Company's right to terminate the Merger Agreement in certain circumstances); (ii) AMC's deal protection provisions, including the Company's no-solicitation covenant and the "window shop" exceptions thereto, the standard by which the Special Committee could exercise its "fiduciary out" and cause the Company to furnish information to, and to engage in discussions and negotiations with, a person making a post-signing unsolicited alternative acquisition proposal and to terminate the Merger Agreement in certain circumstances, and the circumstances in which the Company would be required to pay Parent a termination fee in connection with a fiduciary termination of the Merger Agreement and the amount and timing of payment of the termination fee; (iii) the parties' mutual and unilateral conditions to closing and the provisions pursuant to which the parties would be permitted to terminate the Merger Agreement, including those termination provisions triggering payment of the termination fee by the Company; (iv) the definition of Requisite Company Vote (and Greenberg Traurig's proposed inclusion of a "majority-of-the-minority" vote condition); (v) the Company's covenants to convene the special meeting of stockholders to vote on the proposed Merger Agreement and to prepare and file with the SEC a proxy statement and Schedule 13E-3; (vi) the Company's obligation to notify Parent of certain adverse changes or events that would result in the failure of the closing conditions; (vii) the scope of the Company's representations and warranties, including the exceptions thereto and materiality and other qualifiers in respect thereof; (viii) the scope of and dollar thresholds relating to the Company's interim operating covenants between signing and closing; (ix) Parent's financing representation and the Company's covenant to cooperate with respect to Parent's Credit Agreement replacement efforts; (x) the director and officer indemnification provisions; (xi) the scope of AMC's obligations under the Merger Agreement as payment-guarantor of Parent and Merger Sub's obligations; (xii) the treatment of the Preferred Stock and outstanding equity awards in the merger, including the accelerated vesting and cash out thereof; (xiii) the impact of the merger on certain license agreements and material contracts of the Company and requirements to obtain necessary third party consents in respect thereof; (xiv) provisions relating to public announcements in connection with the proposed transaction; (xv) the proposed certificate of incorporation and bylaws of the surviving corporation in the merger; and (xvi) various technical drafting points throughout the draft Merger Agreement.

        Greenberg Traurig also explained the features and implications of the voting and support agreement that AMC intended to enter into with Robert L. Johnson and certain of his affiliates as a condition to the transaction, and the share exchange and contribution agreement that needed to be negotiated between Robert L. Johnson and his affiliates and AMC in connection with the proposed equity rollover by Mr. Johnson and his affiliates of their shares of Common Stock in exchange for shares of Parent common stock. It was noted that under applicable Nevada law, the holders of Common Stock would not have the right to dissent from the merger and seek a judicial determination by a Nevada court of the fair value of their shares. The Special Committee then further discussed the treatment of the Company's employee equity awards and expressed the view that, if possible under the Company's incentive equity plan and any outstanding individual award agreements, all outstanding options and restricted stock awards should vest at the effective time of the merger. The Special Committee also discussed the status of the due diligence investigation of the Company being conducted by AMC and its advisors. An anticipated timetable for the overall transaction was next discussed.

        Also on June 13, 2018, AMC delivered to Robert L. Johnson initial drafts of (i) a Contribution Agreement (the " Contribution Agreement ") and certain related documents (collectively, the " Rollover Documents ") proposed to be entered into by Parent and the Johnson Entities in connection with the proposed transaction, and (ii) a Voting and Transaction Support Agreement (the " Voting Agreement ") proposed to be entered into by Parent, each of the Johnson Entities and the Company (as a nominal party for certain ministerial acts required to be performed by the Company) in connection with the proposed merger. Mr. Johnson discussed the draft Rollover Documents with Arent Fox, acting in its

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capacity as counsel to RLJ Companies. Mr. Johnson and Arent Fox determined that the draft Rollover Documents were substantially consistent with the agreement-in-principle that Mr. Johnson had reached with AMC in February 2018 with respect to, among other terms and conditions, his ability to monetize his 17% investment in Parent's common stock, various corporate governance matters, and his title and role at the Company following consummation of the merger. At the request of Greenberg Traurig, a copy of the draft Voting Agreement was delivered by Arent Fox to the Special Committee and to Greenberg Traurig.

        On June 15, 2018, Greenberg Traurig convened a telephone conference with S&C to discuss and commence the negotiation of the issues raised in the revised draft of the Merger Agreement delivered by Greenberg Traurig to S&C on June 13, 2018, including all of the issues discussed by Greenberg Traurig with the Special Committee at the June 5, 2018 and June 13, 2018 meetings thereof. Greenberg Traurig and S&C also discussed the anticipated timetable for the proposed transaction.

        Also on June 15, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. The Special Committee discussed the Company's quarterly (previously annual) grants of equity awards (i.e., RSAs and RSUs) to employees and non-employee directors of the Company expected to be determined by the Company's Compensation Committee in the coming weeks, and the proposed treatment of such equity awards under the current draft of the Merger Agreement. Greenberg Traurig summarized and reported on its discussions and negotiations with S&C earlier that day and the overall status of such negotiations, including the Special Committee's proposal (reflected in the revised draft of the Merger Agreement delivered by Greenberg Traurig to S&C on June 13, 2018) to include a majority-of-the-minority stockholder approval condition and Greenberg Traurig's discussions with S&C regarding the same. Greenberg Traurig also discussed certain statutory and other differences between the laws of Delaware and the laws of Nevada in the context of the proposed deal structure and certain provisions in the current draft of the Merger Agreement (including with respect to AMC's proposed deal protection package and the Special Committee's fiduciary outs) and the judicial review standard likely to be invoked by a Nevada court in the case of any state court litigation regarding the transaction. Greenberg Traurig further summarized the termination fee structure initially proposed by AMC and its response (as reflected in the revised draft of the Merger Agreement delivered by Greenberg Traurig to S&C on June 13, 2018) to delete such termination fee provisions in their entirety. Greenberg Traurig next explained that this remained an open issue and continued to describe to the Special Committee certain issues regarding AMC's deal protection package and the Special Committee's fiduciary outs and suggested various alternative and compromise approaches and formulations that could be used in the course of further negotiation of these and other issues presented by the draft Merger Agreement. Greenberg Traurig also reported on the status of AMC's continuing due diligence investigation of the Company and discussed the anticipated timing for the proposed transaction.

        On June 18, 2018, S&C delivered to Greenberg Traurig a further revised (third) draft of the Merger Agreement.

        On June 19, 2018, Greenberg Traurig convened a telephone conference with S&C, Arent Fox, Citi, Allen & Co. and the Company regarding the status of AMC's continuing due diligence investigation of the Company.

        On June 21, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. The Special Committee continued the discussion of the quarterly (previously annual) grants of equity awards (i.e., RSAs and RSUs) to employees and non-employee directors of the Company expected to be made by the Company in July 2018, the proposed treatment of such awards as reflected in Greenberg Traurig's revised draft of the Merger

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Agreement, and the various means by which the grant and vesting of such quarterly equity grants could be accelerated. The Special Committee also discussed the AMC Warrants, including AMC's stated intention to exercise, in full, such warrants prior to the record date for the special meeting of stockholders to vote on the Merger Agreement and the consequences of such exercise; namely, AMC's acquisition of a majority of the voting power attributable to the outstanding Common Stock and its consequent ability to nominate a majority of the Company's directors for election to the Board. It was noted that AMC intends to pay the aggregate exercise price for the AMC Warrants by surrendering approximately $55 million of the outstanding principal amount of its term loan in exchange for shares of Common Stock.

        Greenberg Traurig then summarized for the Special Committee the changes reflected in the June 18 revised draft of the Merger Agreement distributed by S&C and the overall status of the negotiation thereof. Greenberg Traurig next summarized specifically the negotiating positions taken by the parties in the various drafts of the Merger Agreement that had been exchanged by the parties to date. Greenberg Traurig also explained the significance and consequences of certain negotiating positions taken by the parties (in terms of risk allocation, consummation certainty and fiduciary flexibility for the Special Committee) and discussed its recommendations as to potential methods of compromise for certain issues and its reasons for recommending no compromise on certain other issues. The Special Committee and Greenberg Traurig further discussed AMC's proposed deal protection package, including the Special Committee's fiduciary outs, and the Voting Agreement proposed to be entered into by Parent and the Johnson Entities and Greenberg Traurig's initial comments thereto, which would be communicated to representatives of Arent Fox. The Special Committee also discussed the status of AMC's continuing due diligence investigation of the Company and the anticipated timing for the proposed transaction.

        Also on June 21, 2018, Greenberg Traurig convened a telephone conference with S&C, Arent Fox and the Company regarding the status of AMC's continuing due diligence investigation of the Company.

        On June 22, 2018, Greenberg Traurig delivered to S&C a further revised (fourth) draft of the Merger Agreement.

        Also on June 22, 2018, Arent Fox delivered to S&C Mr. Johnson's comments on the draft Rollover Documents. Mr. Johnson subsequently discussed these comments with AMC.

        On June 23, 2018, Mr. Scott Royster, a member of the Special Committee, had a telephone conversation with Mr. Dayton Judd, a director of the Company nominated by the holders of the Company's Class C-2 preferred stock, in which Mr. Judd expressed concern that he had not had any substantive discussions to date with representatives of AMC regarding the anticipated timing of the proposed transaction and the form and terms of any substitute preferred stock that would be offered to the holders of the Preferred Stock in the event such holders elected not to participate in the Change of Control ("put") offer (at a cash-out price equal to $7.8125 for each share of Common Stock into which shares of the Preferred Stock are convertible) required to be made by the Company under the certificates of designation governing such Preferred Stock in connection with the proposed merger.

        On June 25, 2018, S&C convened a telephone conference with Arent Fox and the Company regarding AMC's continuing due diligence investigation of the Company.

        On June 26, 2018, S&C convened a telephone conference with Greenberg Traurig, Arent Fox and the Company to discuss the Company's production debt.

        Also on June 26, 2018, Greenberg Traurig convened a telephone conference with S&C to negotiate the material issues raised in the revised draft of the Merger Agreement delivered by Greenberg Traurig to S&C on June 22, 2018, including, among other things, issues relating to the Company's representations and warranties and operating covenants between signing and closing, AMC's proposed

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deal protection package, the Special Committee's fiduciary outs, the circumstances under which a termination fee vis a vis expense reimbursement would be payable by the Company and the amounts thereof, the provisions relating to AMC as guarantor of Parent's and Merger Sub's payment obligations under the Merger Agreement, the indemnification provisions of the Merger Agreement, and the parties' respective conditions to closing.

        Also on June 26, 2018, Greenberg Traurig convened a telephone conference with Arent Fox, in which Greenberg Traurig informed Arent Fox of Mr. Royster's telephone conversation with Mr. Judd on June 23, 2018. Greenberg Traurig and Arent Fox also discussed Greenberg Traurig's views on the need for and its other comments to the draft Voting Agreement delivered by AMC to Robert L. Johnson on June 13, 2018.

        On June 27, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. Greenberg Traurig summarized the material open issues remaining in the continued negotiation of the draft Merger Agreement. The Special Committee and its advisors discussed the impact of such issues on risk allocation and overall transaction consummation certainty, as well as the ability of the Special Committee to take certain fiduciary actions. The Special Committee also discussed the provisions in current (fourth) draft of the Merger Agreement regarding the treatment of the holders of the outstanding Preferred Stock. Mr. Royster also informed the Special Committee of his conversation with Mr. Judd on June 23, 2018.

        On June 27, 2018, Arent Fox delivered to S&C a further revised draft of the Voting Agreement.

        Later that same day, Greenberg Traurig convened a telephone conference with S&C, in which they continued to negotiate the remaining open issues in the Merger Agreement

        On June 28, 2018, S&C delivered to Greenberg Traurig a further revised (fifth) draft of the Merger Agreement.

        During the period between June 28, 2018 and July 3, 2018, Greenberg Traurig had several telephone conferences with S&C, in which they continued to negotiate the remaining open material issues in the draft Merger Agreement. Such issues included (i) the termination fee provisions (i.e., the circumstances in which it would become payable by the Company, the amounts thereof (in the context of both a fiduciary termination to enter into a definitive agreement for a "superior proposal" and in connection with an "intervening event") and the methods by which the termination fee would be calculated in such circumstances; (ii) the scope of certain of the Company's representations and warranties; (iii) the director and officer indemnification provisions of the draft Merger Agreement; (iv) the scope of AMC's guaranty of Parent's and Merger Sub's payment obligations under the Merger Agreement; and (v) the scope of certain of the Company's operating covenants between signing and closing. Greenberg Traurig and S&C also negotiated the provisions of the proposed charter and bylaws of the surviving company and discussed the Special Committee's comments on the draft Voting Agreement and certain remaining due diligence requests made by AMC and the timing of AMC's anticipated completion of due diligence. Greenberg Traurig and S&C further discussed the status of AMC's negotiations with Robert L. Johnson of the equity rollover and share contribution agreement.

        On June 29, 2018, Mr. Scott Royster, a member of the Special Committee, had a telephone conversation with Mr. Dayton Judd in which Mr. Judd reiterated his concern, among other things, about the lack of communication to date by AMC's representatives with the holders of the Preferred Stock and his lack of involvement in the transaction process to date. Mr. Royster explained to Mr. Judd the mandate, function and obligations of the Special Committee and the fact that the rights of the holders of the Preferred Stock are purely contractual in nature and that they had no role at the bargaining table with AMC and the Special Committee with respect to the proposed going-private

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merger transaction, so long as AMC intended to comply with the provisions in the certificates of designation governing the Preferred Stock applicable to such transaction.

        Later that same day, Mr. Royster, a member of the Special Committee, had a telephone conversation with Mr. John Hsu, in which Mr. Hsu expressed concern about the progress made in the Merger Agreement negotiations to date. Mr. Hsu also expressed concern about the apparent slowdown in the Company's subscriber growth, which the Company's CEO suggested was due, in part, to the inherent seasonality in the Company's business. Mr. Royster and Mr. Hsu also discussed the desire expressed by the holders of the Preferred Stock to be more fully informed about the overall transaction process and Mr. Hsu agreed to contact Mr. Judd or to have a representative of S&C contact Mr. Judd's counsel to discuss AMC's intentions regarding the treatment of the outstanding Preferred Stock in the merger.

        On July 2, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. Greenberg Traurig updated the Special Committee on the status of its most recent discussions and negotiations with S&C and the overall status of the continuing negotiation of the remaining open issues in the draft Merger Agreement, principally with respect to the termination fee provisions in the context of a superior proposal and the methods by which they should be calculated and expressed. Greenberg Traurig described the circumstances in which the termination fee would be payable in the context of a fiduciary termination of the Merger Agreement due to the occurrence of an intervening event and recommended that the termination fee in such circumstance should be in the nature of reimbursement for AMC's actual, documented out-of-pocket expenses incurred in connection with the proposed transaction, subject an aggregate monetary cap. The Special Committee authorized Greenberg Traurig to communicate these positions to S&C and to deliver a mark-up of the Merger Agreement reflecting such positions, including a $3 million cap on AMC's expense reimbursement in the case of a fiduciary termination resulting from an intervening event. Greenberg Traurig also discussed several more technical "drafting" points that remained open in the Merger Agreement, but noted that these would be expeditiously resolved through compromise and that none of these issues rose to the level of "show stoppers" or having economic or closing certainty significance.

        Mr. Royster also reported to the Special Committee regarding his conversations with Mr. Judd and Mr. Hsu on June 29, 2018. The Special Committee and its advisors discussed the Special Committee's role as bargaining agent for Non-Affiliate Common Stockholders and that AMC's representatives should speak directly to Mr. Judd regarding AMC's intentions to comply with the certificates of designation governing the Preferred Stock. Greenberg Traurig also discussed the Special Committee's fiduciary duties in connection with the proposed transaction. Greenberg Traurig also reported on its most recent discussions with S&C and Arent Fox regarding the status of the negotiations of the proposed Rollover Documents to be entered into between Robert L. Johnson and his affiliated entities and AMC. Greenberg Traurig further discussed the anticipated timing of the proposed transaction, including the potential signing and public announcement of the merger, the filing with the SEC of the Company's preliminary merger proxy statement and the anticipated SEC review and comment process, the special meeting process, and hypothetical closing dates for the transaction.

        On July 3, 2018, Mr. John Hsu had a telephone conversation with Mr. Dayton Judd, in which Mr. Judd informed Mr. Hsu that he believed the holders of Preferred Stock should be engaged in the transaction process with AMC. Mr. Hsu informed Mr. Judd that AMC's intentions regarding the treatment of the outstanding Preferred Stock in the proposed merger had not changed and reiterated that the Preferred Stock would be entitled to the cash-out premium provided in the applicable certificates of designation governing the Preferred Stock based on the price payable in the merger to the holders of shares of Common Stock.

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        On July 4, 2018, Greenberg Traurig delivered to S&C a further revised (sixth) draft of the Merger Agreement.

        On July 5, 2018, Mr. Scott Royster, a member of the Special Committee, had a telephone conversation with Mr. Dayton Judd, in which Mr. Judd informed Mr. Royster that he had had a telephone conversation with Mr. John Hsu, in which they discussed AMC's intentions regarding the treatment of the outstanding Preferred Stock in the proposed merger. Mr. Judd also informed Mr. Royster that he intended to send a letter to the Company regarding these matters.

        On July 8, 2018, Mr. Dayton Judd delivered a letter to Mr. Robert L. Johnson, Chairman of the Company, and Messrs. Laszlo and Royster, the members of the Special Committee, in which Mr. Judd discussed, among other things, the rights of the Company's preferred stockholders under the certificates of designation governing the various classes of the Preferred Stock and expressed concerns relating to the Company's ability to complete the proposed transaction without first reaching an understanding with the holders of the Preferred Stock as to the treatment of the Preferred Stock in the proposed merger.

        On July 9, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. Mr. Royster summarized his telephone conversation with Mr. Dayton Judd on July 5, 2018. The Special Committee discussed the letter received by Messrs. Laszlo and Royster from Mr. Judd on July 8, 2018. Greenberg Traurig reiterated that the rights of the holders of the Preferred Stock (including the holders of the Class C-2 preferred stock) under the applicable certificates of designations were wholly contractual in nature, and further reiterated that the Special Committee's role with respect to the proposed merger has been to date and continues to be that of a vigilant bargaining agent for the economic interests and rights of the Non-Affiliate Common Stockholders. It was noted that the holders of the Preferred Stock are not entitled to anything more than the $7.8125 per share cash out offer or, alternatively, substitute Preferred Stock terms provided for in the certificates of designation and that they had no right or ability to vote on the merger in their capacity as preferred stockholders. Greenberg Traurig also reported that the treatment of the holders of Preferred Stock had been discussed with S&C, that AMC intends to honor the terms of the certificates of designation for the Preferred Stock, and that such treatment had been addressed by Greenberg Traurig and S&C to a certain extent in the current draft of the Merger Agreement. Greenberg Traurig also advised the Special Committee that Mr. Judd's letter must be promptly distributed to the full Board. Following the conclusion of the meeting, Mr. Laszlo forwarded Mr. Judd's letter to all Board members.

        Also on July 9, 2018, representatives of Greenberg Traurig convened a telephone conference with S&C regarding the latest proposed termination fee provisions contained in the draft Merger Agreement delivered by Greenberg Traurig to S&C on July 4, 2018. Representatives of S&C indicated that AMC was prepared to agree conceptually to the components of the formula proposed by Greenberg Traurig for calculating the termination fee payable in the case of a fiduciary termination for a superior proposal (which, when calculated, amounted to approximately $6.75 million), but preferred to express the termination fee as a fixed dollar amount equal to $6.75 million (and not as a formula, as provided in Greenberg Traurig's revised (sixth) draft of the Merger Agreement). S&C also informed Greenberg Traurig that AMC would agree to reimbursement of up to $3 million of AMC's documented, out-of-pocket expenses payable in the event of a fiduciary termination for an intervening event, as proposed by Greenberg Traurig in its revised (sixth) draft of the Merger Agreement. Greenberg Traurig and S&C next discussed the issues raised in the July 8, 2018 letter from Mr. Judd, the rights of the holders of the Preferred Stock in connection with the proposed transaction under the certificates of designation, the proposed treatment of the Preferred Stock under the Merger Agreement, and the strategy for communicating with the Company's preferred stockholders with respect to these issues.

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Greenberg Traurig and S&C acknowledged that their interpretation of the relevant provisions of the certificates of designation were the same.

        Also on July 9, 2018, Mr. Laszlo, a member of the Special Committee, convened a telephone conference with Mr. John Hsu in which they discussed the status of the proposed transaction, the remaining open issues in the draft Merger Agreement (including, among other things, the termination fee payable by the Company to Parent in certain circumstances), and the treatment of the Preferred Stock in connection with the proposed transaction. With respect to the Preferred Stock, Mr. Hsu informed Mr. Laszlo that he had already discussed the matter with Mr. Judd, was perplexed by Mr. Judd's letter of July 8, 2018, and already advised Mr. Judd that it was AMC's intention to comply with the applicable provisions of the certificates of designation governing the Preferred Stock in connection with the merger.

        On July 12, 2018, AMC delivered to Mr. Johnson revised drafts of the Rollover Documents and a draft of the Voting Agreement in substantially execution copy form. Copies thereof were furnished to Greenberg Traurig.

        During the period between July 14, 2018 and July 26, 2018, AMC and Mr. Johnson, and their respective representatives, negotiated and finalized the open issues in the Rollover Documents.

        On July 16, 2018, S&C delivered to Greenberg Traurig a further revised (seventh) draft of the Merger Agreement reflecting the termination fee provisions agreed to by Greenberg Traurig and S&C on July 9, 2018.

        On July 17, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. Greenberg Traurig summarized its most recent conversations with S&C regarding the proposed treatment of the outstanding classes of Preferred Stock in connection with the proposed merger. In particular, Greenberg Traurig reported that AMC confirmed it intention to offer to the holders of the Preferred Stock a cash-out price equal to $7.8125 for each share of Common Stock into which shares of the Preferred Stock are convertible (which amount represents a 125% premium to the Per Share Merger Consideration payable in the merger to the holders of shares of Common Stock), as provided in the applicable certificates of designation governing the Preferred Stock, and, if such offer was rejected by the holders of the Preferred Stock, such holders would receive preferred stock in the surviving corporation having such terms as provided therefor in the applicable certificate of designation. Greenberg Traurig also discussed the amount of the termination fee that would be payable by the Company in the event of a fiduciary termination of the Merger Agreement for a superior proposal, noting that the termination fee amount was the only material issue for the Special Committee remaining in the draft Merger Agreement. In particular, Greenberg Traurig reported that AMC had proposed to express the termination fee as a fixed dollar amount equal to $6.75 million (and not as a formula, as Greenberg Traurig had proposed in its most recent (sixth) draft of the Merger Agreement), and that AMC agreed to expense reimbursement of up to $3 million payable in the case of a fiduciary termination for an intervening event. The Special Committee also discussed the proposed treatment in the proposed Merger of Mr. Penella's stock options and the non-director restricted stock awards. Representatives of Greenberg Traurig noted that they had spoken with Mr. Penella about these issues and that Mr. Penella and Mr. John Hsu were scheduled to discuss the resolution thereof over the next few business days. The Special Committee also discussed the status of Mr. Johnson's continuing negotiations with AMC with respect to his post-closing arrangements, as indicated to Greenberg Traurig by S&C and Arent Fox, as well as the anticipated timing for signing a definitive Merger Agreement and publicly announcing the transaction and the various action items and work streams that would need to be completed prior to signing.

        On July 18, 2018, a representative of S&C discussed the treatment of the Preferred Stock in the merger with Mr. Judd and informed Mr. Judd that AMC would comply with the terms of the

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applicable certificates of designations for the Preferred Stock following any announcement of a definitive transaction.

        During the period from July 25, 2018 to July 27, 2018, Greenberg Traurig and S&C exchanged two additional drafts of the Merger Agreement and various related transaction documentation and prepared proposed execution copies of the same for review and consideration by the Special Committee.

        On July 26, 2018, Mr. Miguel Penella, the Company's Chief Executive Officer, and Mr. John Hsu had a telephone conversation in which they discussed the treatment of Mr. Penella's stock options and the unvested restricted stock awards held by certain employees of the Company.

        On July 29, 2018, the Special Committee held a telephonic meeting that was attended by Messrs. Laszlo and Royster, constituting all members of the Special Committee, as well as representatives of Greenberg Traurig and Allen & Co. The Special Committee reviewed the proposed execution copies of the Merger Agreement and the Voting Agreement. Greenberg Traurig stated that there had been no material changes to the proposed Merger Agreement or Voting Agreement from the previous drafts reviewed by Greenberg Traurig with the Special Committee at the July 17, 2018 meeting.

        Greenberg Traurig then summarized the Special Committee's fiduciary obligations in connection with the proposed merger, noting that the Special Committee has been vested with the plenary authority and power of the full Board under Nevada law to consider, review and evaluate the Initial Proposal delivered to the Company on February 26, 2018 (and all subsequent amendments thereto), to negotiate with AMC the structure and terms thereof on behalf of and as exclusive bargaining agent for the Non-Affiliate Common Stockholders, and to determine and vote (on a binding basis on behalf of the full Board) to approve or disapprove of any transaction proposed by AMC. Greenberg Traurig next reviewed the five-month process that had been undertaken by the Special Committee in performing its duties in connection with the proposed merger since the initial establishment of the Special Committee on February 26, 2018. It was noted that the Special Committee had interviewed and selected, at the Company's expense, its own independent, highly qualified legal and financial advisory team and that the Special Committee convened 27 formal meetings to date. It was further noted that the Special Committee and its professional advisors had additionally engaged in numerous informal communications, correspondences, conference calls and conversations over the preceding five months. It was observed that, during the course of the transaction process to date, the Special Committee reviewed and discussed, among other matters, the Special Committee's role and authority, its fiduciary duties in connection with the proposed transaction, the proposed deal structure, nine drafts of the proposed Merger Agreement (that were prepared and exchanged by Greenberg Traurig and S&C during the negotiation process at the direction of their respective clients), and the various other transaction documents, including the proposed Voting Agreement. Greenberg Traurig observed that throughout the process, the Special Committee had regularly consulted with, and requested, received and reviewed various advice and information from, Greenberg Traurig and Allen & Co. in connection with the Special Committee's review, evaluation and negotiation of the proposed merger. In addition, it was noted that the Special Committee was proactively involved in overseeing and facilitating management's production to AMC of extensive documentation and information in connection with AMC's comprehensive due diligence review of the Company, and that the Special Committee utilized management to conduct its own due diligence review of various aspects of the Company's historical business and financial performance, capital structure, material contracts and prospects that were deemed relevant by the Special Committee and necessary for it to properly satisfy its obligations. The history of AMC's (and its affiliate's) initial investment in the Company was also discussed (including AMC's role as a lender, common stockholder, preferred stockholder and holder of the AMC Warrants). The Special Committee also discussed the fact that AMC made clear, both publicly, and privately to the Special Committee, that it would not support any third-party acquisition proposal, at any price, and further discussed the illiquidity of the Common Stock and the possible impact thereon

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and on the price of the Common Stock were AMC to publicly withdraw its proposed going-private merger with the Company.

        At the meeting, Allen & Co. next presented to and reviewed with the Special Committee Allen & Co.'s financial valuation analysis of the Company as of July 27, 2018 (the last trading day prior to the meeting) and the proposed Per Share Merger Consideration of $6.25, noting certain changes from Allen & Co.'s preliminary valuation analysis that was presented to the Special Committee on May 2, 2018. The updated presentation also provided the Special Committee with a summary of proposed transaction terms and selected premiums paid analysis, as well as updates on background and economics of the transaction.

        At the conclusion of this presentation, and following a question and answer period with respect thereto, Allen & Co. delivered to the Special Committee its oral opinion, which was subsequently confirmed the next day by delivery of its written opinion dated July 29, 2018, to the effect that, as of such date and based upon and subject to the assumptions made with the Company's consent, matters considered and limitations on the review undertaken by Allen & Co. in preparing such opinion, the Per Share Merger Consideration to be received by the Non-Affiliate Common Stockholders pursuant to the Merger Agreement was fair, from a financial point of view, to such holders, as more fully described below in the section "Opinion of Financial Advisor" beginning on page [     ·     ] of this Proxy Statement.

        The Special Committee then conducted its final deliberations and discussions, in consultation with Greenberg Traurig and Allen & Co., regarding the proposed definitive terms and conditions of the Merger Agreement. At the request of the Special Committee, Greenberg Traurig also discussed the Special Committee's continuing role following the execution of the Merger Agreement and until consummation of the proposed merger.

        Upon conclusion of such deliberations, upon motion duly made and seconded, the Special Committee determined and resolved that the Merger Agreement and the transactions contemplated thereby are advisable, fair to, and in the best interests of, the Company and the Non-Affiliate Common Stockholders, adopted the Merger Agreement and the transactions contemplated thereby and further resolved to recommend that the holders of Common Stock vote to approve the Merger Agreement.

        Immediately after the conclusion of the meeting, the Company, Parent, Merger Sub and AMC entered into the Merger Agreement. Concurrently with the execution and delivery of the Merger Agreement, Parent, the Johnson Entities and the Company entered into the Voting Agreement, and Parent and the Johnson Entities entered into the Contribution Agreement and related documents.

        Prior to the opening of trading on the Nasdaq Capital Market on July 30, 2018, the Merger Agreement was announced by AMC and the Company via a joint press release. Promptly thereafter, the Company filed with the SEC a Current Report on Form 8-K disclosing the Merger Agreement and the Voting Agreement, and AMC filed with the SEC a Current Report on Form 8-K and an amendment to its Schedule 13D disclosing the Merger Agreement, the Voting Agreement and its arrangements with Mr. Johnson.

        On August 9, 2018, the Company and Parent entered into the Fourth Amendment to the Credit Agreement to eliminate the Minimum Cash Balance requirement (as defined in the Credit Agreement).

        Certain holders of the Preferred Stock followed up with AMC following the execution of the Merger Agreement, and AMC reiterated its position with respect to the treatment of the Preferred Stock in connection with the merger.

Reasons for the Merger; Recommendation of the Special Committee; Fairness of the Merger

        In evaluating the Merger Agreement, the merger and the other transactions contemplated thereby, the Special Committee consulted with its legal and financial advisors and the Company's management

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and considered a number of factors, including, but not limited to, the following potentially positive factors (which are not intended to be exhaustive and are not listed in any intended relative order of importance):

•

the fact that the Per Share Merger Consideration consists solely of cash, providing the Non-Affiliate Common Stockholders with certainty of value and immediate liquidity upon consummation of the merger, particularly in light of the relatively limited trading volume of the Common Stock and the risks and uncertainties relating to the Company's prospects and ability to execute on its current business plan and achieve management's forecasts, and the market, economic and other risks and uncertainties inherent in owning an equity interest in a public company (many of which are beyond the Company's control);



•

the Special Committee's understanding, following discussions with management, of the Company's business, assets, condition (financial and otherwise) and results of operations, the Company's competitive position, the strategic options and prospects and the risks involved in achieving the Company's prospects, the historical and projected financial performance of the Company and the nature of the industry in which the Company competes, and current macro-economic and market conditions, both on a historical basis and on a prospective basis which, in the Special Committee's belief, makes the merger the best strategic and financial return on investment alternative available to the Company and the Non-Affiliate Common Stockholders at this time;



•

the current and historical trading prices for the Common Stock, including the market performance of the Common Stock relative to other participants in the Company's industry, general market indices and the historical volatility of the Common Stock, as compared to the Per Share Merger Consideration, including the fact that the Per Share Merger Consideration of $6.25 represents an approximate premium of:



•

61% over the $3.87 closing sale price per share of the Common Stock on the Nasdaq Capital Market on February 23, 2018, the last trading day before the public announcement of AMC's delivery to the Company of the Initial Proposal on February 26, 2018;



•

28% over the $4.87 closing sale price per share of the Common Stock on the Nasdaq Capital Market on July 27, 2018, the last trading day before the public announcement of the signing of the Merger Agreement;



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59% to the $3.93 volume weighted average price per share of the Common Stock on the Nasdaq Capital Market for the 30- consecutive trading day period ended February 23, 2018;



•

36% to the $4.61 highest trading price per share of the Common Stock on the Nasdaq Capital Market during the 52-week period ended July 27, 2018; and



•

195% to the $2.12 lowest trading price per share of the Common Stock on the Nasdaq Capital Market during the 52-week period ended July 27, 2018;



•

the fact that the Per Share Merger Consideration of $6.25 is significantly higher than the highest price paid by AMC and its controlled Affiliates for any shares of Common Stock purchased by them during the past two years, as described in more detail under " Important Information Regarding the Company—Transactions in Common Stock During the Past 60 Days, " " Important Information about the Company—Transactions in Common Stock During the Past Two Years, " " Important Information Regarding the Company—Transactions in Connection with Credit Agreement Amendments " and " Important Information Regarding the Company—Other Transactions " on pages [     ·     ] through [     ·     ] of this Proxy Statement;



•

the arms'-length negotiations conducted over an approximately five-month period by the Special Committee with respect to the Per Share Merger Consideration, which led to increases thereof

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from $4.25 per share, to $4.92 per share, to $5.95 per share, to $6.00 per share and, ultimately, to $6.25 per share (an overall increase of $2.00 per share or approximately 47% of the Initial Proposal), the Special Committee's determination that the price of $6.25 per share was the highest price that AMC was willing to pay, and the risk that further negotiation or delay created a meaningful risk that AMC might determine not to enter into the Merger Agreement and to terminate negotiations of a potential transaction, in which event the Non-Affiliate Common Stockholders would lose the opportunity to accept the substantial premium being offered;

•

the possibility that it could take a considerably long period of time, if ever, for the trading price of the Common Stock to reach $6.25 per share, as adjusted for the time value of money;



•

the Special Committee's determination that the merger is reasonably likely to deliver greater value to the Non-Affiliate Common Stockholders, as compared to the Company remaining a controlled public company and pursuing the Company's stand-alone, strategic long-term plan, taking into account the execution risks of management's business plan and the time value of money;



•

the fact that the Company's Urban Movie Channel business segment experienced a shortfall of its paid-subscriber growth targets for the Company's fiscal quarter ended June 30, 2018;



•

the "Risk Factors" set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017;



•

the Special Committee's determination that other strategic alternatives, including pursuing a potential sale of the Company to a third-party financial buyer or a strategic buyer other than AMC at price higher than $6.25 per share, are not realistically available to the Company in light of the fact that AMC indicated in the Initial Proposal delivered to the Company on February 26, 2018, which was publicly disclosed, and subsequently reiterated to the Special Committee by letter dated March 29, 2018, that AMC would not vote for or otherwise support a transaction to sell the Company to any party, at any price, or support any other strategic transaction involving the Company, and that under the Investment Agreement, the Company is prohibited from entertaining or soliciting any acquisition proposals or initiating, encouraging, participating in or otherwise facilitating any discussions or negotiations with any person with respect to any acquisition proposals without AMC's prior consent (which AMC can withhold in its sole and absolute discretion);



•

the Special Committee's review of the transaction structure contemplated by the Merger Agreement and the financial and other terms and conditions of the Merger Agreement, including, among others, the following specific terms of the Merger Agreement:



•

the high likelihood of consummation of the merger during Q4 2018, including the limited and customary conditions to the parties' obligations to consummate the merger, and the commitment by Parent and Merger Sub to use their reasonable best efforts to take or cause to be taken all actions necessary or advisable to consummate the merger and the transactions contemplated thereby as promptly as practicable;



•

the fact that the Merger Agreement does not contain any financing-related contingencies, "outs" or conditions to consummation of the merger, that in order to ensure certainty regarding the financial ability of Parent and Merger Sub to consummate the merger pursuant to the Merger Agreement, AMC has irrevocably and unconditionally guaranteed the due and punctual payment by Parent and Merger Sub of the Per Share Merger Consideration and all other payments contemplated by the Merger Agreement, in each case, as and when due and payable pursuant to the Merger Agreement, that AMC is a substantial net worth entity with more than $5.1 billion in assets as of March 31, 2018, and that the Company has the ability to specifically enforce AMC's payment guaranty and Parent's and

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Merger Sub's overall obligations to consummate the merger in accordance with the terms of the Merger Agreement;

•

the ability of the Company and its representatives, in accordance with the terms of the Merger Agreement, at any time prior to obtaining stockholder approval of the Merger Agreement at the special meeting, to provide non-public information to, and engage in discussions and negotiations with, any person that submits an unsolicited, bona fide written acquisition proposal for the Company, if the Special Committee determines in good faith, after consultation with its legal and financial advisors, that such acquisition proposal constitutes or would reasonably be expected to result in a superior proposal and that the failure to take such action would be inconsistent with the directors' fiduciary duties under applicable law;



•

the ability of the Special Committee, in certain circumstances specified in the Merger Agreement, to change in a manner adverse to Parent or withdraw its recommendation that the Company's stockholders vote at the special meeting to approve the Merger Agreement and its ability to terminate the Merger Agreement in order to enter into a definitive agreement with a topping bidder that submits a superior proposal that is not matched by Parent or in response to an intervening event, provided that the Company pays to Parent a termination fee equal to (i) $6.75 million, if the Merger Agreement is terminated by the Company in connection with a superior proposal, or (ii) the documented, out-of-pocket expenses of Parent incurred in connection with the Merger Agreement and the transactions contemplated hereby, up to a maximum of $3.0 million, if the Merger Agreement is terminated by the Company in response to an intervening event;



•

the Special Committee's determination that the termination fee of $6.75 million payable by the Company to Parent in the circumstances described above, which amount represents approximately 2.5% of the aggregate enterprise transaction value, is customary and reasonable in the context of obtaining for the Non-Affiliate Common Stockholders the Per Share Merger Consideration of $6.25 in cash, representing a premium of approximately 61% to the closing sale price of the Common Stock on the Nasdaq Capital Market on February 23, 2018 (the last trading day before the public announcement of AMC's delivery to the Company of the Initial Proposal on February 26, 2018), and in light of the overall terms of the Merger Agreement (including the Company's fiduciary outs, maximum closing certainty and the remedies available to the Company against AMC, Parent and Merger Sub in certain circumstances, as described elsewhere in this Proxy Statement); and



•

the other terms and conditions of the Merger Agreement that the Special Committee, after consulting with its legal advisors, considered to be generally reasonable, customary and consistent with transactions substantially similar to the proposed going-private merger with AMC;



•

the absence of any procedural or substantive antitrust filings or review or other regulatory risks with respect to the transactions contemplated by the Merger Agreement;



•

the fact that the Voting Agreement will automatically terminate upon the termination of the Merger Agreement in accordance with its terms, including if the Special Committee withdraws its recommendation that the Company's stockholders vote to approve the Merger Agreement and thereupon terminates the Merger Agreement in order to enter into a definitive agreement to accept a superior proposal or in response to an intervening event;

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•

the oral opinion of Allen & Co. rendered to the Special Committee on July 29, 2018, which was subsequently confirmed by delivery of a written opinion dated July 29, 2018, to the effect that, as of such date and based upon and subject to the assumptions made with the Company's consent, procedures followed, matters considered and limitations on the review undertaken by Allen & Co. in preparing the opinion, the consideration to be paid to the Unaffiliated RLJE Stockholders (as defined in the Merger Agreement) pursuant to the Merger Agreement was fair, from a financial point of view, to such stockholders, as more fully described below in the section "Opinion of Financial Advisor" beginning on page [     ·     ] of this Proxy Statement; and



•

the fact that the February 28, 2019 termination date under the Merger Agreement allows for sufficient time to complete the merger.

        The Special Committee also considered a number of factors that are discussed below relating to the procedural safeguards that it believes were and are present to ensure the fairness of the merger and to permit the Special Committee to represent effectively the interests of the Non-Affiliate Common Stockholders. These procedural safeguards, which are not intended to be exhaustive and are not listed in any relative order of importance, are discussed below:

•

the fact that the Special Committee consists entirely of independent and disinterested non-employee directors who are not affiliated, or a party to any extraneous business relationships, with AMC or any of its affiliates, Robert L. Johnson or any of his affiliates, or any members of the Company's management;



•

the fact that the Special Committee was charged solely with acting as exclusive bargaining agent and representing the interests of the Non-Affiliate Common Stockholders, has been vested with the plenary authority and power of the full Board under Nevada law to consider, review and evaluate the proposed transaction with AMC on behalf of such stockholders, had exclusive and independent control of all substantive discussions and arm's-length negotiations with AMC regarding its proposal to acquire the publicly held shares of Common Stock, the structure of the proposed going-private merger transaction and the terms and conditions of the definitive Merger Agreement, and had definitive and binding authority (on behalf of the Company and the full Board) to determine whether to approve or disapprove of the proposed merger or any alternative transaction with AMC or its affiliates;



•

the fact that Greenberg Traurig and Allen & Co. worked directly with the Special Committee and were consulted by the Special Committee throughout the five-month transaction process and were instructed by and updated the Special Committee directly and regularly;



•

the procedural fairness of the transaction, including the fact that the transaction was negotiated over a period of approximately five months, with such negotiations designed and conducted by a special committee consisting entirely of independent, non-employee directors who did not have any material financial interest in the merger different from, or in addition to, that of the Company's stockholders who are not affiliated with AMC or any of its affiliates, Robert L. Johnson or any of his affiliates, or any members of the Company's management (other than certain fees not to exceed $100,000 in the aggregate that will be paid to each member of the Special Committee in connection with their services to the Company with respect to the merger, but which are not conditioned on the consummation of the merger and the accelerated vesting and cash out of certain restricted stock awards made to all non-employee director of the Company), and that the Special Committee was advised by highly qualified and experienced M&A legal counsel and financial advisors;



•

the fact that the Special Committee met formally 27 times (and additionally engaged in numerous other correspondences, conference calls and conversations) over the course of approximately five months to evaluate, in consultation with Greenberg Traurig and Allen & Co.,

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AMC's various proposals to acquire the publicly held shares of Common Stock (including consideration ad negotiation of the Initial Proposal, which ultimately led to four price increases and a final offer price of $6.25 per share) and the economic merits and risks of the transactions contemplated by the Merger Agreement, as well as the fact that during these meetings, the Special Committee discussed the advantages and disadvantages of the merger, reviewed with the Special Committee and summarized the issues and negotiating positions raised in nine drafts of the Merger Agreement, designed and oversaw the negotiating strategy, and made various strategic and tactical recommendations relating thereto; and

•

the fact that under Nevada law and the Company's Articles of Incorporation, approval of the Merger Agreement requires the affirmative vote "for" the Merger Agreement by the holders of a majority of the voting power attributable to all outstanding classes of the Company's voting securities, that the Common Stock is the only class of the Company's capital stock that has the right to vote in respect of and to approve (or disapprove) the Merger Agreement, and that the Company's Articles of Incorporation do not provide for the ability of stockholders to vote by written consent in lieu of a meeting and, therefore, it is a condition to the consummation of the Merger that the requisite stockholder vote be obtained (in person or by proxy) at the Special Meeting.

        The Special Committee also considered a variety of uncertainties, risks and potentially negative factors in its deliberations concerning the merger, including the factors discussed below, concerning the Merger Agreement and the merger (which are not intended to be exhaustive and are not listed in any intended relative order of importance):

•

the fact that following consummation of the merger the equity interests in the Company currently owned by the Non-Affiliate Common Stockholders will be extinguished and, therefore, such former stockholders will no longer participate in the Company's future earnings or growth, if any, or benefit from increases, if any, in the value of the shares of the Common Stock;



•

the possibility that AMC could sell part or all of the Company following the merger to one or more purchasers at a valuation higher than the $6.25 per share being paid by AMC in the merger;



•

the risks and costs to the Company if the merger is not consummated, including the diversion of management and employee attention, potential employee attrition, the potential disruptive effect on business and customer relationships, as well as the negative impact of a public announcement of the merger on the Company's sales and operating results and the ability of the Company to attract and retain key management, marketing and technical personnel;



•

the fact that the Company's directors, officers and employees have expended and will continue to expend extensive efforts to consummate the merger and the other transactions contemplated by the Merger Agreement and that such persons have experienced and will continue to experience distractions from their employment duties during the pendency of such transactions;



•

the risk of incurring substantial expenses related to the consummation of the merger, including in connection with potential litigation related to the merger;



•

the restrictions in the Merger Agreement on the Company's business operations prior to completion of the merger which, although customary in tenor and scope, may delay or prevent the Company from undertaking certain business opportunities that may arise or any other action it would otherwise take with respect to the operations of the Company pending completion of the merger;



•

the fact that certain members of the Board and executive officers of the Company may have interests in the merger that may be different from, or in addition to, those of the Non-Affiliate

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Common Stockholders, as described in more detail under " Special Factors—Interests of the Company's Directors and Executive Officers in the Merger " beginning on page [     ·     ] of this Proxy Statement;

•

the fact that, as of the date of this Proxy Statement, AMC and its affiliates beneficially own in the aggregate approximately 30% of the outstanding shares of Common Stock, in addition to the AMC Warrants, shares of Preferred Stock and 2015 Warrants, which warrants, if exercised by AMC in full, would result in AMC beneficially owning, in the aggregate, a majority of the voting power attributable to all of the outstanding shares of Common Stock and, therefore, provide AMC with the ability to vote to determine unilaterally whether the Merger Agreement is approved by the Company's stockholders at the Special Meeting (without any need for obtaining any additional votes by any other holders of shares of Common Stock);



•

the fact that Robert L. Johnson, the Company's Chairman, and certain of his affiliates that beneficially own, as of the date of this Proxy Statement, in the aggregate approximately 43.5% of the outstanding shares of Common Stock, have entered into the Voting Agreement with Parent, pursuant to which they have agreed, among other things, to affirmatively vote all of their shares of Common Stock at the Special Meeting for the approval of the Merger Agreement and against any alternative acquisition proposal, and have granted to Parent an irrevocable proxy to secure the performance of their voting obligations under the Voting Agreement, as described in more detail under " The Merger Agreement—The Voting Agreement " beginning on page [     ·     ] of this Proxy Statement;



•

the fact that, by reason of the factors described immediately above, the likelihood of any third party submitting to the Special Committee or the Company (on an unsolicited basis pursuant to the "window shop" exceptions to the Company's no-solicitation covenant in the Merger Agreement) an acquisition proposal constituting or reasonably likely to lead to a Superior Proposal is materially diminished;



•

the fact that AMC rejected the Special Committee's proposal to include in the Merger Agreement a so-called "majority-of-the-minority" stockholder approval condition, which would irrevocably condition the consummation of the merger on obtaining at the Special Meeting the affirmative vote for the approval of the Merger Agreement of the holders of a majority of the outstanding shares of Common Stock (other than shares of Common Stock owned by AMC, Robert L. Johnson, members of the Company's management or any of their respective affiliates);



•

the fact that the Special Committee was unable to conduct a market check of potential third-party buyers and business combination candidates by reason of the preexisting no-shop covenant of the Company contained in the Investment Agreement, AMC's ability to acquire majority voting control of the Company by means of exercising its previously issued warrants, and AMC's previous statements, made both publicly in its amendment to Schedule 13D filed with the SEC on February 26, 2018 and privately to the Special Committee, that it was only a buyer (and not a seller) of the Company and would not vote for or otherwise support a transaction to sell the Company to any party, at any price, or support any other alternative strategic transaction involving the Company;



•

the fact that the termination fee of $6.75 million payable by the Company to Parent in the event of a fiduciary termination of the Merger Agreement to accept a superior proposal, although deemed reasonable by the Special Committee in the overall context of the Merger Agreement and in light of the Per Share Merger Consideration of $6.25, which represents an approximately 61% premium to the closing sale price of the Common Stock on the Nasdaq Capital Market on February 23, 2018 (the last trading day before the public announcement of AMC's delivery to the Company of the Initial Proposal on February 26, 2018), could deter third parties from

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submitting to the Special Committee or the Company an acquisition proposal constituting or reasonably likely to lead to a Superior Proposal;

•

the fact that holders of shares of Common Stock have no right under applicable Nevada law or pursuant to the Company's Articles of Incorporation or Bylaws to dissent from the merger and obtain a judicial determination of the fair value of their shares;



•

the fact that the gain on an all-cash transaction is 100% taxable to the Company's non-affiliate U.S. stockholders that are U.S. Holders for U.S. federal income tax purposes; and



•

the risk that, while the merger is expected to be completed during Q4 2018, there can be no assurance that all conditions to the parties' obligations to complete the merger will be timely satisfied (or satisfied at all) and, as a result, it is possible that the merger may not be completed in a timely manner or at all.

        The Special Committee did not consider the liquidation value or net book value of Company's assets because the Special Committee considers Company to be a viable going-concern that will continue to operate regardless of whether the merger is consummated, where value is derived from cash flows generated from its continuing operations. In addition, the Special Committee believes that the value of Company's assets that might be realized in a liquidation would be significantly less than its going-concern value for the reasons that (i) liquidation sales generally result in proceeds substantially less than the sales of a going-concern; (ii) it is impracticable to determine a liquidation value given the significant execution risk involved in any breakup of a company; (iii) an ongoing operation has the ability to continue to earn profit, while a liquidated company does not, such that the "going-concern value" will be higher than the "liquidation value" of a company because the "going-concern value" includes the liquidation value of a company's tangible assets as well as the value of its intangible assets, such as goodwill; and (iv) a liquidation process would involve additional legal fees, costs of sale and other expenses that would reduce any amounts that stockholders might receive upon liquidation. Furthermore, the Company has no intention of liquidation and the merger will not result in the liquidation of the Company. The Special Committee did not consider net book value, which is an accounting concept, as a factor because the Company's business is not of a nature whose value is traditionally measured as a multiple of book value. Rather, the Company's value is derived primarily from cash flows generated by continuing operations. Therefore, the Special Committee believes that net book value is not a material indicator of the value of the Company as a going concern, but rather is indicative of historical costs. Accordingly, the Special Committee believes that the net book value of the Company is irrelevant to a determination as to whether the Per Share Merger Consideration is fair to the Non-Affiliate Common Stockholders. The Special Committee believes the analyses and additional factors it reviewed provided an indication of the Company's going -concern value. The Special Committee also considered the historical trading prices of the Common Stock. The Special Committee did not seek to determine a pre-merger going-concern value for the Common Stock to determine the fairness of the Per Share Merger Consideration to the Non-Affiliate Common Stockholders. The Special Committee believes that the trading price of the Common Stock at any given time represents the best available indicator of the Company's going-concern value at that time, provided that the trading price at that time is not impacted.

        After considering the foregoing potentially positive and potentially negative factors, the Special Committee concluded that the uncertainties, risks and potentially negative factors relevant to the merger were outweighed by the potential benefits that it expected the Non-Affiliate Common Stockholders would obtain as a result of the merger. Accordingly, the Special Committee has concluded (with respect to both the substantive terms of the Merger Agreement, including the Per Share Merger Consideration, and the procedural aspects of the transaction) that the Merger Agreement is advisable, fair to and in the best interest of the Company and the Non-Affiliate Common Stockholders, and has unanimously determined to approve the Merger Agreement and the transactions contemplated thereby,

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including the merger, and to recommend to the Company's stockholders that they affirmatively vote "for" approval of the Merger Agreement at the Special Meeting.

        The foregoing discussion of information and factors considered by the Special Committee is not intended to be exhaustive and may not include all of the factors considered by the Special Committee. In view of the wide variety of factors considered by the Special Committee, the Special Committee found it impracticable to quantify or otherwise assign relative weights to the foregoing factors in reaching its conclusions. In addition, individual members of the Special Committee may have given different weights to different factors and may have viewed some factors more positively or negatively than others. The Special Committee considered the opinion and analyses of Allen & Co., among other factors considered, in reaching its determination as to the fairness of the transactions contemplated by the Merger Agreement, including the merger. The Special Committee approved the Merger Agreement based upon the totality of the information presented to and considered by it.

        In considering the recommendation of the Special Committee with respect to the proposal to approve the Merger Agreement, you should be aware that certain of our officers and directors have certain interests in the merger that may be different from, or in addition to, your interests as a stockholder generally. The Special Committee was aware of these interests, considered them and took them into account, together with other factors, in determining whether to approve the Merger Agreement and recommending that our stockholders vote for the approval of the Merger Agreement. See the section entitled " Special Factors—Interests of the Company's Directors and Executive Officers in the Merger " beginning on page [     ·     ]. The Special Committee, on behalf of the Company, further believes that the merger is fair to the Company's "unaffiliated security holders," as defined under Rule 13e-3 under the Exchange Act.

         ACCORDINGLY, THE SPECIAL COMMITTEE UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE MERGER AGREEMENT.

Opinion of Financial Advisor

        The Special Committee engaged Allen & Co. as financial advisor in connection with the proposed Merger. In connection with this engagement, the Special Committee requested that Allen & Co. render an opinion to the Special Committee as to the fairness, from a financial point of view, to the Unaffiliated RLJE Stockholders (as defined in the Merger Agreement) of the Per Share Merger Consideration to be received by such holders pursuant to the Merger Agreement. On July 29, 2018, at a meeting of the Special Committee held to evaluate the Merger, Allen & Co. rendered an oral opinion, which was confirmed by delivery of a written opinion dated July 29, 2018, to the Special Committee to the effect that, as of that date and based on and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken described in such opinion, the consideration to be received the Unaffiliated RLJE Stockholders pursuant to the Merger Agreement was fair, from a financial point of view, to such holders.

        The full text of Allen & Co.'s written opinion, dated July 29, 2018, which describes the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken, is attached as Annex B and is incorporated by reference herein in its entirety. The description of Allen & Co.'s opinion set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of Allen & Co.'s opinion. Allen & Co.'s opinion was intended for the benefit and use of the Special Committee (in its capacity as such) in connection with its evaluation of the Per Share Merger Consideration from a financial point of view and did not address any other terms, aspects or implications of the Merger. Allen & Co.'s opinion did not constitute a recommendation as to the course of action that RLJE (or the Special Committee) should pursue in connection with the Merger or otherwise address the merits of the underlying decision by RLJE to engage in the Merger, including in comparison to other strategies or transactions that might be

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available to RLJE or which RLJE might engage in or consider. Allen & Co.'s opinion does not constitute advice or a recommendation to any stockholder as to how such stockholder should vote or act on any matter relating to the Merger or otherwise.

        Allen & Co.'s opinion reflected and gave effect to Allen & Co.'s general familiarity with RLJE as well as information that Allen & Co. received during the course of its assignment, including information provided by the managements of RLJE in the course of discussions relating to the Merger as more fully described below. In arriving at its opinion, Allen & Co. neither conducted a physical inspection of the properties or facilities of RLJE, AMC, Parent or any other entity, nor made or obtained any evaluations or appraisals of the assets or liabilities (contingent, accrued, derivative, off-balance sheet or otherwise) of RLJE, AMC, Parent or any other entity, or conducted any analysis concerning the solvency or fair value of RLJE, AMC, Parent or any other entity.

        In arriving at its opinion, Allen & Co., among other things:

          (i)  reviewed the financial terms and conditions of the Merger as reflected in the Merger Agreement;

         (ii)  reviewed certain publicly available historical business and financial information relating to RLJE and AMC, including public filings of RLJE and AMC, and historical market prices and trading volumes for RLJE common stock;

        (iii)  reviewed certain financial information relating to RLJE provided to or discussed with Allen & Co. by the management of RLJE, including certain internal financial forecasts, estimates and other financial and operating data relating to RLJE prepared by the management of RLJE (such forecasts, the "RLJE Forecasts");

        (iv)  held discussions with the management of RLJE relating to the past and current operations, financial condition and prospects of RLJE;

         (v)  reviewed and analyzed certain publicly available information, including certain stock market data and financial information, relating to selected companies with businesses that Allen & Co. deemed generally relevant in evaluating RLJE;

        (vi)  reviewed and analyzed certain publicly available financial information relating to selected transactions that Allen & Co. deemed generally relevant in evaluating the Merger; and

       (vii)  conducted such other financial analyses and investigations as Allen & Co. deemed necessary or appropriate for purposes of its opinion.

        In rendering its opinion, Allen & Co. relied upon and assumed, with RLJE's consent and without independent verification, the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information available to Allen & Co. from public sources, provided to or discussed with Allen & Co. by the managements and/or other representatives of RLJE, or otherwise reviewed by Allen & Co. With respect to the RLJE Forecasts that Allen & Co. was directed to utilize for purposes of its analyses, Allen & Co. was advised by the management of RLJE, and Allen & Co. assumed, at the direction of RLJE, that the RLJE Forecasts, estimates and other financial and operating data were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of the management of RLJE, and were a reasonable basis upon which to evaluate, the future financial and operating performance of RLJE and the other matters covered thereby. Allen & Co. also assumed, with the consent of the Special Committee, that the financial results, reflected in the RLJE Forecasts, estimates and other financial and operating data utilized in its analyses would be realized in the amounts and at the times projected. Allen & Co. expressed no opinion or view as to the RLJE Forecasts or any of the estimates or other financial or operating data or the assumptions on which they were based.

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        Further, Allen & Co.'s opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Allen & Co. as of, the date of its opinion. It should be understood that subsequent developments may affect the conclusion expressed in Allen & Co.'s opinion and that Allen & Co. assumed no responsibility for advising any person of any change in any matter affecting Allen & Co.'s opinion or for updating or revising its opinion based on circumstances or events occurring after the date of its opinion.

        Allen & Co. did not express any opinion as to the fairness, financial or otherwise, of the amount, nature or any other aspect of any compensation or other consideration payable to any officers, directors or employees of any party to the Merger or any related entities, or any class of such persons or any other party, relative to the Per Share Merger Consideration or otherwise. Allen & Co. expressed no opinion as to the prices at which shares of RLJE common stock may trade at any time or the value thereof.

        In addition, Allen & Co. expressed no opinion or view as to any tax or other consequences that might result from the Merger, nor did Allen & Co. express any opinion or view as to, and Allen & Co. has relied, at the direction of RLJE, upon the assessments of representatives of RLJE regarding, legal, regulatory, accounting, tax and similar matters relating to RLJE and the Merger, as to which Allen & Co. understood RLJE obtained such advice as it deemed necessary from qualified professionals. Allen & Co. assumed, with the consent of the Special Committee, that the Merger would be consummated in accordance with the terms and conditions of the Merger Agreement and in compliance with all applicable laws, documents and other requirements, without waiver, modification or amendment of any material term, condition or agreement, and that all governmental, regulatory or other consents, approvals, releases and waivers necessary for the consummation of the Merger will be obtained without delay, limitation, restriction or condition, including any divestiture or other requirements that would be meaningful in any respect to its analyses or opinion. Allen & Co. further assumed, with the consent of the Special Committee, that the final executed Merger Agreement would not differ from the draft reviewed by Allen & Co. in any respect meaningful to Allen & Co.'s analyses or opinion.

        Allen & Co.'s opinion was limited to the fairness, from a financial point of view and as of its date, of the Per Share Merger Consideration to be received by the Unaffiliated RLJE Stockholders pursuant to the Merger Agreement. Allen & Co.'s opinion did not address any other term, aspect or implication of the Merger, including the form or structure of the Merger or any agreement, arrangement or understanding entered into in connection with the Merger or otherwise.

        In connection with its opinion, Allen & Co. performed a variety of financial and comparative analyses, including those described below. The summary of the analyses below and certain factors considered is not a comprehensive description of all analyses undertaken or factors considered by Allen & Co. The preparation of a financial opinion or analysis is a complex process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion and analyses are not readily susceptible to summary description. Allen & Co. arrived at its opinion based on the results of all analyses undertaken and assessed as a whole, and did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis. Accordingly, Allen & Co. believes that the analyses and factors summarized below must be considered as a whole and in context. Allen & Co. further believes that selecting portions of the analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses and factors, could create a misleading or incomplete view of the processes underlying Allen & Co.'s analyses and opinion.

        In performing its financial analyses, Allen & Co. considered industry performance, general business and economic, market and financial conditions and other matters existing as of the date of its opinion,

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many of which are beyond the control of RLJE. No company, business or transaction reviewed is identical or directly comparable to RLJE or their respective businesses or the Merger and an evaluation of these analyses is not entirely mathematical; rather, the analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the public trading, acquisition or other values of the companies, businesses or transactions reviewed. The estimates of the future performance of RLJE in or underlying Allen & Co.'s analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by such analyses. These analyses were prepared solely as part of Allen & Co.'s analysis of the fairness, from a financial point of view, of the Per Share Merger Consideration and were provided to the Special Committee in connection with the delivery of Allen & Co.'s opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the assumptions and estimates used in, and the ranges of valuations resulting from, any particular analysis described below are inherently subject to substantial uncertainty and should not be taken as the views of Allen & Co. regarding the actual values of RLJE.

        Allen & Co. did not recommend that any specific consideration constituted the only appropriate consideration in the Merger. The type and amount of consideration payable in the Merger was determined through negotiations between RLJE and AMC, rather than by any financial advisor, and was approved by the Special Committee. The decision to enter into the Merger Agreement was solely that of the Special Committee and the AMC board of directors. Allen & Co.'s opinion and analyses were only one of many factors considered by the Special Committee in its evaluation of the proposed Merger and the Per Share Merger Consideration and should not be viewed as determinative of the views of the Special Committee or management with respect to the Merger or the consideration payable in the Merger.

Financial Analyses

        The summary of the financial analyses described in this section entitled "— Financial Analyses " is a summary of the material financial analyses provided by Allen & Co. in connection with its opinion, dated July 29, 2018, to the Special Committee. The summary set forth below is not a comprehensive description of all analyses undertaken by Allen & Co. in connection with its opinion, nor does the order of the analyses in the summary below indicate that any analysis was given greater weight than any other analysis. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by Allen & Co., the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by Allen & Co. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by Allen & Co. Future results may differ from those described and such differences may be material. For purposes of the financial analyses described below in this section of this proxy statement/prospectus, the term (i) "LTM" means last twelve months, (ii) "EBITDA" means earnings before interest, income taxes, depreciation and amortization, excluding certain one-time non-recurring items, as applicable, (iii) "EV" means enterprise value, (iv) "ACL" means Agatha Christie Limited, and (v) "SG&A expenses" means selling, general and administrative expenses.

RLJE Financial Analyses

        WholeCo: Selected Public Companies.     Allen & Co. reviewed publicly available financial and stock market information of six selected publicly traded traditional media companies and four independent content production and distribution companies that, given certain business and financial characteristics, Allen & Co. considered generally relevant for purposes of analysis.

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        The selected traditional media companies were:

•

The Walt Disney Company



•

CBS Corporation



•

Discovery Inc.



•

Viacom Inc.



•

ITV plc



•

AMC Networks Inc.

        The selected independent content production and distribution companies were:

•

Lions Gate Entertainment Corp.



•

Entertainment One Ltd.



•

Eros International Media Ltd



•

DHX Media Ltd.

        Allen & Co. reviewed, among other information, share prices as of July 27, 2018. Allen & Co. calculated the enterprise value as a multiple of LTM EBITDA, 2018 estimated EBITDA, and 2019 estimated EBITDA for the traditional media companies and the independent content production and distribution companies. Financial data of the selected companies was based on public filings, publicly available Wall Street research analysts' estimates and other publicly available information. The results of this analysis for the traditional media companies and the independent content production and distribution companies are summarized below:

        Based upon the foregoing and other factors which it deemed relevant, Allen & Co. applied selected ranges of 2018 estimated adjusted EBITDA of 9.0x to 12.0x and 2019 estimated adjusted EBITDA (using both the base case and adjusted case projections) of 8.0x to 11.0x. This analysis indicated the following implied per share equity value reference ranges for RLJE, as compared to the offer price of $6.25 per share:

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        Selected Precedent Transactions Analysis.     Using publicly available information, Allen & Co. reviewed financial information relating to the following sixteen selected transactions Allen & Co. considered generally relevant for purposes of analysis, which are referred to for purposes of this section of this proxy statement/prospectus as the RLJE selected transactions:

        Allen & Co. reviewed, among other information, transaction values of the RLJE selected transactions. Allen & Co. calculated the enterprise values as a multiple of forward estimated EBITDA for the target companies, as of the applicable announcement date of such transaction. Financial data for the RLJE selected transactions was based on public filings, publicly available Wall Street research analysts' estimates and other publicly available information.

        Based upon the foregoing and other factors which it deemed relevant, Allen & Co. applied a selected range of forward estimated EBITDA multiples of 10.0x to 13.0x. This analysis indicated the implied per share equity value reference range was $5.00 to $6.46, as compared to the offer price of $6.25 per share.

        Discounted Cash Flow Analysis.     Allen & Co. performed a discounted cash flow analysis of RLJE by calculating, based on the RLJE Forecasts, the estimated present value (as of June 30, 2018) of the unlevered free cash flows that RLJE was forecasted to generate during the 6-months ending December 31, 2018 through the full year ending December 31, 2022. For purposes of this analysis, stock-based compensation was treated as a cash expense. Allen & Co. applied a selected range of terminal EBITDA multiples of 9.0x to 12.0x to EBITDA for the year ending December 31, 2022 of base case and adjusted case to arrive at terminal values of the base case and adjusted case, respectively. The unlevered free cash flows and terminal values of the base case and of the adjusted case were then discounted to present value (as of June 30, 2018) using discount rates ranging from 15.0% to 18.5% and 14.0% to 17.5%, respectively. This range of discount rates was determined based on Allen & Co.'s analysis of RLJE's weighted average cost of capital.

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        This analysis indicated the following implied per share equity value reference ranges for RLJE, as compared to the offer price of $6.25 per share:

        Sum-of-the-Parts: Selected Public Companies Analysis.     Allen & Co. reviewed the digital channels, IP licensing, and wholesale distribution segments of RLJE and its 64% ownership stake in ACL separately. Allen & Co. examined publicly available financial and stock market information of three subscription streaming companies that, given certain business and financial characteristics, Allen & Co. considered generally relevant to RLJE's digital channels segment for purposes of analysis. The selected subscription streaming companies were:

•

Netflix, Inc.



•

Spotify Technology SA



•

Gaia, Inc.

        Allen & Co. reviewed, among other information, share prices as of July 27, 2018. Allen & Co. calculated the enterprise value as a multiple of 2018 estimated revenue and 2019 estimated revenue for the subscription streaming companies. Financial data of the subscription streaming companies was based on public filings, publicly available Wall Street research analysts' estimates and other publicly available information. The results of this analysis for the subscription streaming companies are summarized below:

        Allen & Co. examined publicly available financial and stock market information of selected traditional media and independent content and distribution companies that, given certain business and financial characteristics, Allen & Co. considered generally relevant to RLJE's wholesale distribution segment and its 64% ownership stake in ACL for purposes of analysis. The traditional media companies consisted of The Walt Disney Company, CBS Corporation, Discovery, Inc., Viacom Inc., ITV plc and AMC. The independent content and distribution companies consisted of Lions Gate Entertainment Corp, Entertainment One Ltd., Eros International plc and DHX Media Ltd. SG&A expenses were valued at blended multiples of digital channels, IP licensing, and wholesale segments.

        Allen & Co. applied selected ranges to the different segments of RLJE and its 64% ownership stake in ACL for 2018 and 2019 as follow:

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        This analysis indicated the following implied per share equity value reference ranges for RLJE, as compared to the offer price of $6.25 per share:

Certain Additional Information

        Allen & Co. observed certain additional information that was not considered part of its financial analyses for its opinion but was noted for informational reference, including the historical trading prices of RLJE common shares during the 52-week period ended February 23, 2018 (one-trading day prior to the date of the announcement of AMC's proposal to acquire the remaining shares of RLJE), which indicated during the relevant periods low and high closing prices for RLJE common shares of approximately $2.12 and $4.61 per share, respectively.

Miscellaneous

        The Special Committee selected Allen & Co. as a financial advisor in connection with the Merger based on, among other things, Allen & Co.'s reputation, experience and familiarity with RLJE and the industry in which RLJE operates. Allen & Co., as part of its investment banking business, is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, private placements and related financings, bankruptcy reorganizations and similar recapitalizations, negotiated underwritings, secondary distributions of listed and unlisted securities, and valuations for corporate and other purposes. In the ordinary course, Allen & Co. as a broker-dealer and market maker, and certain of Allen & Co.'s affiliates and/or related entities have invested or may invest, hold long or short positions and may trade, either on a discretionary or non-discretionary basis, for their own account or for those of Allen & Co.'s clients, in the debt and equity securities (or related derivative securities) of RLJE, AMC and/or their respective affiliates. The issuance of Allen & Co.'s opinion was approved by Allen & Co.'s fairness opinion Special Committee.

        For Allen & Co.'s financial advisory services, RLJE has agreed to pay Allen & Co. an aggregate fee of $1,500,000, of which $250,000 was payable upon delivery of Allen & Co.'s opinion and $1,100,000 is contingent upon completion of the merger. RLJE also has agreed subject to certain limitations to reimburse Allen & Co.'s reasonable expenses and to indemnify Allen & Co. and related parties against certain liabilities, including liabilities under the federal securities laws, arising out of its engagement.

        During the two years prior to the date of the opinion, Allen & Co. and its affiliates did not provide any financial advisory, capital markets or similar investment banking services to RLJE (other than with respect to RLJE's engagement of Allen & Co.), AMC or any of Mr. Robert L. Johnson, The RLJ Companies, LLC and RLJ SPAC Acquisition, LLC nor received any fees from RLJE, AMC or any of Mr. Robert L. Johnson, The RLJ Companies, LLC and RLJ SPAC Acquisition, LLC.

        The reports, opinions or appraisals referenced in " Special Factors—Opinion of Financial Advisor" beginning on page [     ·     ] of this Proxy Statement will be made available for inspection and copying at the principal executive offices of RLJE during its regular business hours by any interested RLJE common stockholders or representative who has been designated in writing.

Position of the AMC Entities and the Johnson Entities as to Fairness of the Merger

        Under the SEC rules governing "going-private" transactions, each of AMC, Parent and Merger Sub (collectively, the " AMC Entities ") and the Johnson Entities may be deemed to be an Affiliate of the Company and, therefore, is required to express its belief as to the fairness of the Merger to the

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Non-Affiliate Common Stockholders. Each of the AMC Entities and the Johnson Entities is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The AMC Entities and the Johnson Entities believe that the Merger (which is the Rule 13e-3 transaction for which the Schedule 13E-3 has been filed with the SEC) is substantively and procedurally fair to the Non-Affiliate Common Stockholders on the basis of the factors described under " Special Factors—Reasons for the Merger; Recommendations of the Special Committee; Fairness of the Merger " beginning on page [     ·     ] of this Proxy Statement, and the additional factors described below.

        None of the AMC Entities or the Johnson Entities participated in the deliberations of the Special Committee or the vote of the Special Committee regarding, or received advice from Greenberg Traurig or Allen & Co. as to, the fairness of the Merger. As described in the " Special Factors—Interests of the Company's Directors and Executive Officers in the Merger " section beginning on page [     ·     ] of this Proxy Statement, the AMC Entities and the Johnson Entities have interests in the Merger different from those of the Non-Affiliate Common Stockholders by virtue of the fact that, as a result of the Merger, the Company will become a majority owned subsidiary of each of AMC and Parent, with the Johnson Entities owning a stake of 17% in the Company. Moreover, the Johnson Entities did not participate in the negotiations with the Special Committee with respect to the Merger, including with respect to the price to be paid to the Non-Affiliate Common Stockholders in the Merger.

        The interests of the Non-Affiliate Common Stockholders were represented by the Special Committee, which negotiated the terms and conditions of the Merger Agreement with the assistance of its legal and financial advisors. None of the AMC Entities or the Johnson Entities have performed, or engaged a financial advisor to perform, any valuation or other analysis for the purpose of assessing the fairness of the Merger to the Non-Affiliate Common Stockholders.

        Based on the AMC Entities' review and the Johnson Entities' knowledge of available information regarding the Company, as well as discussions with members of the Company's management regarding the Company and its business and the factors considered by, and the analysis and resulting conclusions of, the Special Committee described in " Special Factors—Reasons for the Merger; Recommendations of the Special Committee; Fairness of the Merger " beginning on page [     ·     ] of this Proxy Statement, the AMC Entities and the Johnson Entities believe that the Merger is substantively fair to the Non-Affiliate Common Stockholders. In particular, the AMC Entities and the Johnson Entities considered the following:

•

the Special Committee, consisting solely of non-management, independent directors who are not affiliated with the AMC Entities or the Johnson Entities and who have no financial interest in the Merger that is different from, or in addition to, the interests of the Non-Affiliate Common Stockholders other than their receipt of Special Committee fees (which are not contingent upon the consummation of the Merger or the Special Committee's recommendation or approval of the Merger) and their interests described in " Special Factors—Interests of the Company's Directors and Executive Officers in the Merger " section beginning on page [     ·     ] of this Proxy Statement, was delegated full authority to review, evaluate and negotiate the terms of the proposed Merger and to decide whether or not to engage in the Merger;



•

the Special Committee was advised by its own nationally recognized independent legal and financial advisors, each of which was selected by the Special Committee;



•

the Special Committee was aware of the existing relationships among the Company, the AMC Entities and the Johnson Entities and their respective affiliates and could take such relationships into account when conducting the Special Committee process and in considering whether to engage in the Merger;

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•

those members of the Board affiliated with the AMC Entities voluntarily recused themselves from all discussions by the Board with respect to a proposed transaction involving the AMC Entities;



•

the Per Share Merger Consideration of $6.25, and the other terms and conditions of the Merger Agreement, resulted from extensive negotiations between the AMC Entities and their advisors, on one hand, and the Special Committee and its advisors, on the other hand, including discussions about the five-year financial forecast that Allen & Co. provided to Citi, which Company management viewed as aggressive;



•

the Merger will provide consideration to the Stockholders entirely in cash, allowing the Non-Affiliate Common Stockholders to immediately realize a certain and fair value for all of their shares of Common Stock;



•

the current and historical market prices of the Common Stock, including the market performance of the Common Stock and the fact that the Per Share Merger Consideration of $6.25 represents an approximate premium of 61% over the $3.87 closing sale price per share of the Common Stock on the Nasdaq Capital Market on February 23, 2018, the last trading day before the public announcement of AMC's delivery to the Company of the Initial Proposal on February 26, 2018, and an approximate premium of 28% over the $4.87 closing sale price per share of the Common Stock on the Nasdaq Capital Market Market on July 27, 2018, the last trading day before the public announcement of the signing of the Merger Agreement;



•

the Per Share Merger Consideration of $6.25 is significantly higher than the highest price paid by AMC or any of its controlled Affiliates for any shares of Common Stock purchased by them during the past two years, as described in more detail under " Important Information Regarding the Company—Transactions in Common Stock During the Past 60 Days ", " Important Information Regarding the Company—Transactions in Common Stock During the Past Two Years ", " Important Information Regarding the Company—Transactions in Connection with Credit Agreement Amendments " and " Important Information Regarding the Company—Other Transactions " on pages [147-150] of this Proxy Statement;



•

the Per Share Merger Consideration of $6.25 is significant considering that on April 21, 2016 the Company had received a notice from Nasdaq indicating that the Company did not meet the required minimum of $2,500,000 in stockholders' equity needed for continued listing on the Nasdaq Capital Market under Listing Rule 5500(b) (due, in part, to a trading price of less than $1.00 per share on the Nasdaq Capital Market), and in order to maintain the Company's listing on the Nasdaq Capital Market, the Company was required to implement a reverse stock split of its Common Stock on June 24, 2016, pursuant to which every three shares of the Company's issued and outstanding common stock was automatically converted into one issued and outstanding share of the Company's common stock, after which AMC made a significant capital investment in the Company in connection with the AMC Transaction;



•

the ability of the Special Committee, in certain circumstances specified in the Merger Agreement, to change in a manner adverse to Parent or withdraw its recommendation that the Company's stockholders vote at the special meeting to approve the Merger Agreement and its ability to terminate the Merger Agreement in order to enter into a definitive agreement with a topping bidder that submits a Superior Proposal (as defined therein) that is not matched by Parent or in response to an Intervening Event (as defined therein), provided that the Company pays to Parent a termination fee equal to (i) $6.75 million, if the Merger Agreement is terminated by the Company in connection with a Superior Proposal, or (ii) the documented, out-of-pocket expenses of Parent incurred in connection with the Merger Agreement and the transactions contemplated hereby, up to a maximum of $3.0 million, if the Merger Agreement is terminated by the Company in response to an Intervening Event;

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•

the Special Committee was deliberate in its process of analyzing and evaluating the AMC Entities' proposal and negotiating with the AMC Entities, ultimately resulting in a $2.00 increase in the per share consideration being delivered to Stockholders in the Merger over that initially proposed by the AMC Entities;



•

the Special Committee requested and received from Allen & Co. an opinion on July 29, 2018, that as of such date and based upon and subject to the assumptions made with the Company's consent, procedures followed, matters considered and limitations on the review undertaken by Allen & Co. in preparing the opinion, the Per Share Merger Consideration to be received by the Non-Affiliate Common Stockholders pursuant to the Merger Agreement was fair from a financial point of view to such Stockholders; and



•

the Special Committee determined unanimously that the Merger is advisable, fair to, and in the best interests of, the Company and the Non-Affiliate Common Stockholders.

        In their consideration of the fairness of the Merger, the AMC Entities and the Johnson Entities did not find it practicable to, and did not, appraise the assets of the Company to determine the liquidation value for the Non-Affiliate Common Stockholders because they considered the Company to be a viable going concern and because the Company's business will continue following the Merger. In addition, the AMC Entities and the Johnson Entities did not consider net book value because they believe that net book value does not reflect or have any meaningful impact on the trading price of the Common Stock. Furthermore, the AMC Entities and the Johnson Entities did not separately consider a going concern value for RLJE. They believe that the trading price of the Common Stock represented the best available indicator of the Company's going concern value.

        While representatives of AMC and Parent and Mr. Johnson are directors of the Company, because of their participation in the transaction as described in the " Special Factors—Interests of the Company's Directors and Executive Officers in the Merger " section beginning on page [     ·     ] of this Proxy Statement, they did not serve on the Special Committee, nor did they participate on behalf of the Company in, or vote in connection with the Special Committee's evaluation, approval or recommendation of, the Merger Agreement and the Merger.

        The foregoing discussion of the information and factors considered by the AMC Entities and the Johnson Entities in connection with the fairness of the Merger Agreement and the Merger is not intended to be exhaustive but is believed to include all material factors considered by them. The AMC Entities and the Johnson Entities did not find it practicable to, and did not, quantify or otherwise attach relative weights to the foregoing factors in reaching their position as to the fairness of the Merger Agreement or the Merger. Rather, the AMC Entities and the Johnson Entities made the fairness determination after consideration of all of the foregoing as a whole. The AMC Entities and the Johnson Entities believe that these factors provide a reasonable basis upon which to form their belief that the Merger is fair to the Non-Affiliate Common Stockholders. This belief should not, however, be construed as a recommendation to any Stockholder to approve the Merger or the Merger Agreement. None of the AMC Entities or the Johnson Entities makes any recommendation as to how Stockholders should vote their shares of Common Stock relating to the Merger. The Merger Agreement does not require an affirmative vote of a majority of the Non-Affiliate Common Stockholders.

        Other than as described in the " Special Factors—Background of the Merger " section beginning on page [     ·     ] of this Proxy Statement, neither the AMC Entities nor the Johnson Entities are aware of any firm offers made during the past two years for the merger or consolidation of the Company, the sale or other transfer of all or any substantial part of the assets of the Company, or a purchase of the Company's securities that would enable the purchaser to exercise control of the Company.

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        The AMC Entities attempted to negotiate the terms of a transaction that would be most favorable to them, and not to the Non-Affiliate Common Stockholders, and, accordingly, did not negotiate the Merger Agreement with a goal of obtaining terms that were fair to such Stockholders.

Purposes and Reasons of the Company for the Merger

        The Company's purpose for engaging in the Merger is to enable its Stockholders to receive $6.25 per share in cash, without interest and less any applicable withholding taxes, which represents a premium of approximately 61% over the $3.87 closing price per share of the Common Stock on the Nasdaq Capital Market on February 23, 2018, the last trading day before the public announcement of AMC's delivery to the Company of the Initial Proposal on February 26, 2018, 28.3% above the closing price of the Common Stock on July 27, 2018, the last trading day on the Nasdaq Capital Market before the public announcement of the signing of the Merger Agreement, a premium of approximately 59% over the $3.93 volume weighted average price per share of the Common Stock on the Nasdaq Capital Market for the 30-day period ended February 23, 2018, a premium of approximately 36% to the $4.61 highest trading price per share of the Common Stock on the Nasdaq Capital Market during the 52-week period ended July 27, 2018, and a premium of approximately 195% to the $2.12 lowest trading price per share of the Common Stock on the Nasdaq Capital Market during the 52-week period ended July 27, 2018.

        The Company believes its long-term objectives can best be pursued as a private company and an indirect, majority-owned subsidiary of AMC. The Company has determined to undertake the Merger at this time based on the analyses, determinations and conclusions of the Special Committee described in detail above under " Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Fairness of the Merger " beginning on page [     ·     ] of this Proxy Statement.

Purposes and Reasons of the AMC Entities and the Johnson Entities for the Merger

        Under the SEC rules governing "going-private" transactions, each of the AMC Entities and the Johnson Entities may be deemed to be an Affiliate of the Company and, therefore, is required to express its purposes and reasons for the Merger to the Non-Affiliate Common Stockholders. Each of the AMC Entities and the Johnson Entities is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The views of the AMC Entities and the Johnson Entities should not be construed as any recommendation as to how Stockholders should vote their shares of Common Stock relating to the Merger.

        For the AMC Entities and the Johnson Entities, the purpose of the Merger is to enable them to acquire control of the Company, through a transaction in which the Non-Affiliate Common Stockholders will be cashed out for $6.25 per share of Common Stock, and bear the rewards and risks of the ownership of the Company after shares of the Common Stock cease to be publicly traded. AMC wants to continue its relationship with Mr. Johnson, who founded the Company and currently serves as Chairman of the Company. Together, the AMC Entities and the Johnson Entities decided to pursue the Merger because they believed that the Company would operate more effectively as a privately owned company and would have greater flexibility to focus on enhancing long-term value without scrutiny or pressure from the public market. The Merger will further AMC's digital strategy by accelerating its interests in direct-to-consumer ad-free subscription services that it owns and controls and by providing AMC with access to strong intellectual property.

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Plans for the Company after the Merger

        In accordance with the Merger Agreement, upon consummation of the Merger, the Common Stock will be delisted from the Nasdaq Capital Market and deregistered under the Exchange Act, and the Company will no longer be required to file periodic reports with the SEC on account of the Common Stock. Instead, the Company will be a majority owned subsidiary of Parent, with the Johnson Entities owning a stake of 17% in the Company. If the Merger is not consummated for any reason, the Non-Affiliate Common Stockholders will not receive any payment for their shares of Common Stock, and the Company will remain a public company, with its Common Stock continuing to be listed and traded on the Nasdaq Capital Market.

        At the closing of the Merger, the AMC Entities will enter into agreements with RLJ SPAC and Mr. Johnson with respect to Mr. Johnson's liquidity, governance rights and role at the surviving corporation following the closing of the transaction.

        As of the date of this Proxy Statement, except as set forth herein, the AMC Entities and the Johnson Entities have no current plans, proposals or negotiations which would relate to or result in an extraordinary transaction involving the Company's business or management, such as a merger, reorganization, liquidation, relocation of any operations or sale or transfer of a material amount of assets, or the incurrence of any additional indebtedness. Following the Merger, the AMC Entities and the Johnson Entities will continuously evaluate and review the Company's business and operations and may propose or develop new plans and proposals which they consider to be in the best interests of the AMC Entities and the Johnson Entities, including any of the types of extraordinary transactions described above.

Certain Effects of the Merger

        If the Merger Agreement is approved by the requisite vote of the Stockholders and all other conditions to the closing of the Merger are either satisfied or waived, Merger Sub will merge with and into the Company, with the Company surviving the Merger as a wholly owned subsidiary of Parent.

        At the Effective Time, each share of Common Stock issued and outstanding immediately prior to the Effective Time (other than Excluded Shares) will be converted into the right to receive the Per Share Merger Consideration. All such shares of Common Stock, when so converted, will no longer be outstanding and will automatically be canceled and will cease to exist, and each holder of a certificate (or evidence of shares in book-entry form) that immediately prior to the Effective Time represented any such shares of Common Stock will cease to have any rights with respect thereto, except the right to receive the Per Share Merger Consideration.

        Each Eligible Preferred Share for which a change-of-control cash purchase election has been made by the record holder thereof pursuant to Section 7(b) of the certificate of designation applicable to such Eligible Preferred Share will be entitled to receive the Preferred Stock Consideration. If any holder of Eligible Preferred Shares does not make such election and surrender such shares to the paying agent in exchange for the Preferred Stock Consideration in accordance with the requirements of the Merger Agreement within 180 days following the Closing Date, such holder will be entitled to receive, in respect of each Eligible Preferred Share for which the holder fails to make such election, a security to be issued by the Surviving Corporation as provided in the applicable certificate of designation.

        At the Effective Time, each Eligible 2015 Warrant will be converted into the right to receive, as promptly as practicable after the Effective Time, the 2015 Warrant Consideration. Any Eligible 2015 Warrant which has an exercise price per Share that is greater than or equal to the Per Share Merger Consideration will be cancelled at the Effective Time for no consideration, payment or right to consideration or payment. As of the Effective Time, each Eligible 2015 Warrant so converted will no

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longer be outstanding and will automatically be cancelled and each holder thereof will cease to have any rights with respect thereto, other than the right to receive the 2015 Warrant Consideration.

        The Common Stock is currently registered under the Exchange Act and is quoted on the Nasdaq Capital Market under the symbol "RLJE." As a result of the Merger, the Company will be a privately held corporation and there will be no public market for its Common Stock. After the Merger, the Common Stock will cease to be quoted on Nasdaq Capital Market and price quotations with respect to sales of Common Stock in the public market will no longer be available. In addition, the registration of the Common Stock under the Exchange Act will be terminated and the Company will no longer be required to file periodic reports with the SEC with respect to the Common Stock. Termination of registration of our Common Stock under the Exchange Act will reduce the information required to be furnished by the Company to our Stockholders and the SEC, and would make certain provisions of the Exchange Act, such as the short-swing trading provisions of Section 16(b) of the Exchange Act and the requirement to furnish a proxy statement in connection with Stockholders' meetings pursuant to Section 14(a) of the Exchange Act, no longer applicable to the Company.

        The Non-Affiliate Common Stockholders will be receiving cash consideration in exchange for their shares of Common Stock and will no longer own an interest in the Company upon the completion of the Merger. As a result, while the AMC Entities and the Johnson Entities will benefit from any synergies created from combining RLJE's businesses with other AMC businesses and any growth of the RLJE business going forward, the Non-Affiliate Common Stockholders will not be able to participate in these potential benefits.

        As a result of the Merger, AMC, which is currently a creditor, warrant holder and stockholder of the Company, will become the majority stockholder of the Company, beneficially owning 83% of the privately held Company. If AMC satisfies the requirements for tax consolidation, AMC expects to consolidate RLJE for tax purposes. AMC will beneficially own a pro-rata share of the Company's net book value and net earnings proportionate with its beneficial ownership interest in the Company. For a discussion of the federal tax consequences of the Merger to the Non-Affiliate Common Stockholders, see " Special Factors—Material U.S. Federal Income Tax Consequences of the Merger" beginning on page [     ·     ] of this Proxy Statement.