Conscious Content Media - Chapter 11 DIP Terms

DIP Terms

Borrower(s)

• Conscious Content Media, Inc. ("CCM"), KidPass, Inc., CodeSpark, Inc., Little Passports, Inc., and CCM Merger Sub II, Inc., each a Delaware corporation, collectively as Borrowers
• Each of the subsidiary debtors is a wholly-owned subsidiary of CCM

Agent / Lender(s)

• [212]Media, LLC, as DIP Agent and DIP Lender
  • The DIP Agent also acts as collateral agent, overseeing all rights, remedies, and interests of the DIP Lenders with respect to the DIP Collateral
  • In the motion to increase the facility, [212]Media, LLC is identified as DIP Agent in its capacity as collateral agent for the holders: DKH Capital LLC, Ascot Capital LLC, Tipsy Ventures Ltd., A.T.A. Ventures I Corp. Ltd., Devdend LLC, Marbruck Investments Limited, Sesame Workshop, and Dave Pottruck
• Each lender from time to time party thereto, as DIP Lenders
• Consenting Pre-Petition Noteholders, comprised of:
  • 2023 Bridge Noteholders: DKH Capital LLC, Ascot Capital LLC, Tipsy Ventures Ltd., A.T.A. Ventures I Corp. Ltd., and Devdend LLC
  • Magnetar Noteholders: Magnetar Financial LLC, as representative of the holders, and U.S. Bank Trust Company, National Association, as successor collateral agent
  • Marbruck Noteholder: Marbruck Investments Limited
  • Secured Convertible Noteholders: Sesame Workshop and Dave Pottruck
• The DIP orders also refer to a DIP bridge lender and to bridge DIP lenders, certain of which may be "insiders" under section 101(31)

DIP Commitments

• $10 million senior secured, priming, and super-priority term loan facility, consisting of:
  • $3,241,517 in postpetition new money term loans (the "New Money DIP Loans")
  • $6,758,483 in prepetition term loans (the "DIP Bridge Loans") to be rolled up (the "Roll-Up Obligations")
    • The DIP Bridge Loans were evidenced by Secured Promissory Notes issued prior to the Petition Date, of which $2,857,688 was advanced between twelve and three months prior to the Petition Date and $3,900,795 was advanced in the three months prior to the Petition Date
    • Immediately upon entry of the Final Order, the Roll-Up Obligations convert on a cashless dollar-for-dollar basis into principal obligations constituting DIP Obligations
• The roll up of the DIP Bridge Loan is authorized and deemed to be a fee in exchange for, and solely on account of, the DIP Lenders' agreement to fund amounts under the DIP Facility, and not as adequate protection for, or otherwise on account of, the DIP Bridge Loan

Requested Increase (Additional DIP Loans)

• The Debtors seek interim and final approval to increase the multi-draw facility by up to $3.0 million in new money DIP loans (the "Additional DIP Loans") over the facility approved under the Final DIP Order entered July 1, 2026:
  • $1.75 million (the "Interim Draw") available immediately upon entry of the interim order
  • The full $3.0 million of Additional DIP Loans, inclusive of the Interim Draw, approved upon entry of the Second Final DIP Order
• Each advance is limited by the Approved DIP Budget and the draw procedures under the DIP facility. Amounts repaid may not be reborrowed.
• The Additional DIP Loans carry the same terms as the existing DIP facility as approved by the Final DIP Order; the motion requests an increase in amount only, and the interim and Second Final DIP Orders incorporate the terms of the Final DIP Order by reference
• The increase will be funded from the Exit Financing, of which the Debtors have obtained $20.0 million of signed and legally binding commitments, and which the Debtors say they had expected to spend during this same budget period had the Exit Financing closed when originally anticipated. The Debtors are awaiting funding from two international investors whose remittances are subject to additional know-your-customer requirements imposed by their banks, a timeline the Debtors do not control.
• Exit Financing converted into the DIP facility will automatically convert into New Preferred Equity (Series A) on the same economic terms as the other DIP lenders
• The Debtors characterize the increase as a liquidity and timing bridge to the plan effective date rather than a change to the underlying capitalization plan, intended to eliminate the risk that administrative or international funding delays interrupt operations or the effective date
• No additional roll-up is requested by the motion, and there is no non-debtor affiliate funding

Purpose of the Increase / Unsatisfied Effective Date Conditions

• The Court confirmed the Debtors' first amended combined disclosure statement and joint chapter 11 plan on July 1, 2026, the same day it entered the Final DIP Order; the plan effective date has not yet occurred. Two conditions to the effective date under Section 11.1 of the plan remain unsatisfied and, the Debtors say, create the need for near-term working capital beyond the current DIP facility:
  • Administrative claims: total unpaid administrative claims for Professionals and Restructuring Expenses are expected to exceed $2.5 million, approximately $1.5 million above budget. To resolve the shortfall, the Debtors have asked Professionals and holders of Restructuring Expenses to accept pro rata payment from $1 million on the effective date and from $1.5 million ninety days after the effective date, along with the second installment payments under the plan to 2023 Bridge Secured Claims and to the Class 7 and Class 8 claims sharing in the cash pool (Option A). Nearly all have agreed, but unanimous consent is required to satisfy the condition.
  • Exit Financing escrow: the Debtors are working to escrow all Exit Financing to close simultaneously with the effective date, and are awaiting remittances from two international investors subject to additional know-your-customer requirements imposed by their banks.

Conditions Precedent

• The Additional DIP Loans are subject to the closing and borrowing conditions of the existing DIP facility, several of which relate to the original closing and have already been satisfied. The DIP Agent is not required to fund any advance until the conditions below are satisfied or waived in its sole discretion:
  • Consent of the Consenting Pre-Petition Noteholders to the subordination of their liens and claims to the DIP obligations
  • Delivery of a Budget by the Debtors
  • Insurance, including commercial general liability and property insurance, with respect to the DIP Collateral
  • Representations and warranties true and correct in all material respects as of the closing date (or as of any earlier date to which they expressly relate)
  • No event of default having occurred and continuing on the closing date or existing after giving effect to the DIP commitment made on that date
  • Corporate power and authority of the Debtors to make, deliver, and perform under the DIP Documents, subject to Bankruptcy Court approval after the Petition Date
  • As conditions precedent to the final closing date: occurrence of the Petition Date with the Debtors in possession; notification to the DIP Agent of the anticipated first day hearing date; and no trustee or examiner with expanded powers appointed under section 1104
  • Entry of an interim order approving the DIP Documents (other than the DIP orders) no later than two weeks after the Petition Date, and entry of a final order no later than 30 days after entry of the interim order

Cash Collateral

• The Debtors are authorized, pursuant to sections 363(a) and (c) of the Bankruptcy Code, to use cash collateral, whenever or wherever acquired, and the proceeds of all collateral pledged to the Consenting Pre-Petition Noteholders, in accordance with the Approved DIP Budget and subject to the Allowed Variance
• The Consenting Pre-Petition Noteholders — the only parties, other than the Debtors and certain DIP Lenders under the DIP Bridge Loans, with an interest in cash collateral — consent to such use and have consensually subordinated their Pre-Petition Liens to the DIP Liens
• In the motion to increase the facility, the Debtors state that they require the continued use of cash collateral in addition to the DIP facility to conduct operations during the pendency of the cases, asserting that without both, liquidity would quickly dry up and the Debtors would be forced to cease operations immediately

Interest Rate

• 14% per annum (the "Base Rate"), compounded annually
• Default Rate: 17% per annum, compounded annually, applicable upon any event of default without regard to any applicable grace periods
• All computations of fees and interest are made on the basis of a 365-day year and actual days elapsed
• Interest is due and payable in cash in arrears on each Interest Payment Date, subject to the Borrowers' option to pay interest in kind and add it to the Outstanding Amount
• The Additional DIP Loans bear interest on the same terms

Fees

• Commitment Fee: 3% of the DIP Commitment, paid in kind and added to the Outstanding Amount
  • Payable only on account of the New Money DIP Loans
  • With respect to the Additional DIP Loans, a fee equal to 3% of the interim DIP commitment is payable on the interim closing date in cash or in kind and added to the Outstanding Amount at the Debtors' option, and a further fee on the remaining DIP commitment is payable on the final closing date on the same cash-or-in-kind basis
• The Borrowers shall pay the DIP Agent Expenses plus Litigation Costs incurred by the DIP Agent for the benefit of the DIP Lenders in the course of any Adverse Litigation in which the DIP Agent is the prevailing party; in no event shall the Borrowers pay DIP Agent Expenses or other fees, costs, or expenses incurred in Adverse Litigation in which the Borrowers are the prevailing party
• DIP Agent expenses and fees are payable within 10 days of receipt by the Debtors, without the requirement to file retention or fee applications and without further Bankruptcy Court approval, subject to a separate, shorter timeline for DIP Agent expenses incurred after the Petition Date. If an objection to the reasonableness of the DIP Agent's invoices is not resolved within 14 days of receipt, the objecting party must file and serve a fee objection limited to the reasonableness of such fees and expenses.
• The Debtors are authorized to pay on the interim closing date all reasonable and documented fees, costs, and out-of-pocket expenses of the DIP Agent incurred on or prior to the Petition Date, to the extent payable under the DIP term sheet

Maturity

• Maturity Date: the earlier of:
  • The Effective Date
  • The date upon which the DIP Agent declares all DIP Obligations to be due and payable and the Commitments terminated as a result of an uncured Event of Default
• The DIP Obligations shall become due and payable, without notice or demand, on the Termination Date (the earliest date on which a Termination Declaration is delivered by the DIP Agent and filed on the docket following an uncured Event of Default)

Milestones

• No later than December 21, 2025: the Petition Date shall have occurred
• No later than March 2, 2026: the second Interim Order shall have been entered
• No later than April 30, 2026: the Final Order shall have been entered
• No later than thirty days after the Petition Date: the Plan of Reorganization shall have been filed
• No later than April 30, 2026: the Plan of Reorganization shall have been confirmed
• No later than May 31, 2026: the Effective Date shall have occurred
• The plan was confirmed July 1, 2026 and the Effective Date has not yet occurred; the motion to increase the facility does not propose to amend the milestones

Events of Default and Remedies

• Usual and customary events of default for financings of this type, including nonpayment of principal, interest, and fees; covenant and representation and warranty defaults; failure to comply with the Approved DIP Budget, subject to the Allowed Variance; priority liens in cash collateral and equivalents; change of control; and bankruptcy-related defaults, including failure to achieve milestones, dismissal, conversion, appointment of a chapter 7 trustee, and certain requests for relief made or orders entered without the DIP Agent's prior approval
• Upon an event of default, the DIP Agent may deliver a notice of default to the Debtors, with a copy to the U.S. Trustee and Committee counsel, and if not cured within 10 days:
  • Declare all outstanding obligations immediately due and payable
  • Terminate the Debtors' authority to use cash collateral or borrow under the DIP facility absent the DIP Agent's consent in its sole discretion
  • Terminate, reduce, or restrict the DIP Lenders' commitments and terminate the DIP loan and any future liability or obligation of the DIP Agent or the DIP Lenders, in each case without affecting the DIP Liens or DIP Obligations
• The DIP Agent may also exercise any other rights and remedies of a secured creditor under applicable law, the DIP facility, or the DIP orders, and is entitled to relief from stay to enforce the DIP Liens against the collateral upon five business days' notice to the Debtors and the U.S. Trustee

Carve Out

• Statutory Fees: all statutory fees payable to the Clerk of the Court and the U.S. Trustee under 28 U.S.C. § 1930(a) and section 156(c) fees and expenses, plus statutory interest, together with reasonable fees and expenses of a chapter 7 trustee under section 726(b) not exceeding $10,000, in each case without regard to the Carve-Out Trigger Notice
• Allowed Professional Fees of Debtors Professionals retained under sections 327, 328, or 363 (including any restructuring, sale, success, or other transaction fee of the Debtors' investment bankers or financial advisors) and of Committee Professionals retained under sections 328 or 1103 (Jenner & Block LLP as lead restructuring counsel, Pashman Stein Walder Hayden P.C. as Delaware counsel, and Novo Advisors as financial advisor to the Committee), in each case incurred on or prior to the first business day following delivery of a Carve-Out Trigger Notice, whether allowed by the Court before or after delivery of the notice
• Post-Carve-Out Trigger Notice Cap: $50,000 for Debtors Professionals and $50,000 for Committee Professionals, for Allowed Professional Fees incurred after the first business day following delivery of a Carve-Out Trigger Notice
• Professional Carve-Out Cap: the Carve-Out from DIP Collateral for the Allowed Professional Fees is capped at $450,000. If Allowed Professional Fees exceed the cap, the Carve-Out is distributed first to pre-trigger Allowed Professional Fees pro rata, and second to post-trigger Allowed Professional Fees pro rata. This cap does not limit the Statutory Fees and Allowed Professional Fees in the Chapter 11 Cases.
• A Carve-Out Trigger Notice may only be delivered by the DIP Agent, by email or other electronic means, to the Debtors' lead counsel, the U.S. Trustee, and Committee counsel, following the occurrence and during the continuation of an event of default, stating that the Post-Carve-Out Trigger Notice Cap has been invoked
• Other than the Carve-Out, no other amounts owed by the Debtors to any party, including amounts set forth in the Approved DIP Budget, are payable from the Pre-Petition Collateral or DIP Collateral as of the date a Carve-Out Trigger Notice is delivered

Use of Proceeds

• Pay transaction costs, fees, and expenses incurred in connection with the DIP Facility
• Pay professional fees of the Debtors and their Estates and the Committee
• Fund working capital and other general corporate purposes permitted by the DIP Documents
• Pay Statutory Fees
• Proceeds of the Additional DIP Loans are to fund payroll obligations, amounts owed to vendors, suppliers, and landlords, and other critical expenses, including the launch of the Sage parenting product, back-to-school marketing spend, holiday inventory purchases for Little Passports, holiday planning and marketing efforts, and other operational and administrative expenses
• The Approved DIP Budget assumes the Debtors will pay all wages, 1099 payments, and amounts owed to vendors when due, whether prepetition or postpetition. The Debtors intend to seek Court approval for such payments, which will not be made absent Court approval.

Credit Bid

• In connection with any Sale, the DIP Agent is authorized, subject to section 363(k) of the Bankruptcy Code, to credit bid on a dollar-for-dollar basis any or all of the outstanding DIP Obligations (including the Roll-Up Obligations) and DIP Bridge Obligations, up to their full amount, including any accrued interest, expenses, and fees, without the need for further court authorization
• The DIP Agent has the absolute right to assign, transfer, sell, or otherwise dispose of its credit bid rights to any acquisition vehicle formed in connection with such bid or other designee
• Any DIP Lender's or the DIP Agent's right to credit bid is subject to an agreement with the Magnetar Noteholders regarding 50% "side-by-side" credit bidding, to be formalized in an intercreditor agreement; such side-by-side credit bidding applies only if a DIP Lender or the DIP Agent exercises its credit bid right in its absolute discretion

Avoidance Actions

• The DIP Collateral includes proceeds from Avoidance Actions arising under sections 502(d), 544, 545, 547, 548, and 550 of the Bankruptcy Code, or any other avoidance actions whether under federal or applicable state law
• The Additional DIP Loans are secured by a DIP lien in avoidance actions, subject to entry of the Second Final DIP Order

Challenge Period and Budget

• The Challenge Period runs through the date that is forty-five calendar days following the conclusion of the confirmation hearing on the Debtors' First Amended Plan, unless shortened by order of the Court
• The Committee shall not commence any Challenge, including the filing of a standing motion, prior to the conclusion of the confirmation hearing on the Debtors' First Amended Plan
• The Court may extend the Challenge Period for cause, and any chapter 7 trustee appointed prior to its expiration will have the longer of (x) the remaining Challenge Period and (y) thirty days from the date of such trustee's appointment to commence a Challenge
• Proceeds of the DIP Facility and/or Cash Collateral not to exceed $50,000 in the aggregate (the "Investigation Budget") may be used by Committee Professionals during the Challenge Period to investigate — but not prosecute — avoidance actions or other claims on account of the Pre-Petition Indebtedness and the Consenting Pre-Petition Noteholders (but not the DIP Facility and DIP Lenders); the limitation does not restrict the Committee's ability to fulfill its statutory duties under section 1103
• No portion of the Carve-Out, Cash Collateral, other DIP Collateral, or DIP proceeds may be used to challenge the Pre-Petition Indebtedness, the Pre-Petition Liens, or the DIP Lenders' liens or claims, to prevent, hinder, or delay the DIP Lenders' enforcement or realization upon the DIP Collateral, or to initiate or prosecute claims or actions against the DIP Lenders
• The Debtors make customary stipulations regarding, among other things, the amounts outstanding with respect to the Consenting Pre-Petition Noteholders and the validity, perfection, and enforceability of their liens; the effect of those stipulations and the related releases with respect to the Additional DIP Loans is subject to entry of the Second Final DIP Order
• The motion to increase the facility does not address whether a new or extended Challenge Period will run with respect to the Additional DIP Loans

Securities and Priorities

• Subject to the Carve-Out, the DIP Lenders are granted allowed superpriority administrative expense claims pursuant to section 364(c)(1) (the "DIP Superpriority Claims") for all DIP Obligations, with priority over any and all administrative expense and unsecured claims, subject only to the Carve-Out and Non-Consensual Liens
• The DIP Agent (for the benefit of the DIP Lenders) is granted continuing, automatically perfected postpetition security interests in and liens on the DIP Collateral (the "DIP Liens"), subject only to the Carve-Out, with the following priorities:
  • Pursuant to section 364(d)(1): valid, perfected, non-avoidable senior priming liens on all DIP Collateral, subject only to the Carve-Out and the Non-Consensual Liens
  • Pursuant to section 364(c)(2): valid, perfected, non-avoidable senior liens on DIP Collateral not subject to non-avoidable, valid, and perfected liens in existence as of the Petition Date, subject only to the Carve-Out
  • All DIP Liens are senior in priority to any security interests in or liens on the DIP Collateral created or granted after the Petition Date
• The prepetition liens primed under section 364(d) are those held by the 2023 Bridge Noteholders, the Magnetar Noteholders, the Marbruck Noteholders, and the Secured Convertible Noteholders, each of which has consented to, or agreed not to oppose, the subordination of its liens; no non-consensual priming is sought
• Prior Permitted Liens: neither the DIP Liens nor the DIP Superpriority Claims shall be senior to any liens senior by operation of law and otherwise permitted by the DIP Bridge Documents, 2023 Bridge Notes, Magnetar Notes, and Marbruck Notes, solely to the extent such permitted liens (1) were in existence on the Petition Date, (2) are valid, unavoidable, and properly perfected as of the Petition Date (or perfected thereafter as permitted by section 546(b)), (3) are senior in priority to the DIP Bridge Obligations, and (4) are permitted to be incurred as senior priority liens thereunder
• The DIP Liens may not be made subject to or pari passu with any lien or security interest granted in the cases or any Successor Case, are enforceable against any trustee appointed in the cases or any Successor Case and upon conversion or dismissal, are not subject to sections 510, 549, or 550, and may not be primed or matched by any lien or interest avoided and preserved under section 551
• All liens, priorities, rights, remedies, benefits, privileges, and protections provided to the DIP Lenders under the Final DIP Order apply with equal force to the Interim Draw, and the defined term "DIP Loans" under the Final DIP Order includes the Additional DIP Loans up to the Interim Draw amount
• The interim order constitutes sufficient and conclusive evidence of the validity, perfection, and priority of the DIP Liens, without the necessity of filing or recording any financing statement or other instrument

Prepetition Indebtedness

• As of December 14, 2025, the Debtors are indebted to the Consenting Pre-Petition Noteholders in the following non-contingent, liquidated amounts:
  • 2023 Bridge Noteholders: $11,359,835 (owed by CCM; inclusive of all principal and interest)
  • Magnetar Noteholders: $99,839,709 (owed by the Debtors; inclusive of all principal and interest)
  • Marbruck Noteholder(s): $19,185,616 (owed by CCM; inclusive of all principal and interest)
  • Secured Convertible Noteholders: $6,858,671 (owed by CCM; inclusive of all principal and interest)

Adequate Protection

Consenting Pre-Petition Noteholders

• Valid and perfected replacement and additional liens and security interests in all DIP Collateral in the amount of any Diminution in Value (the "Adequate Protection Liens"), in the same order of priority as the Pre-Petition Liens and subordinate and subject only to the DIP Liens, the Carve-Out, and the Non-Consensual Liens; the Adequate Protection Liens are enforceable against any trustee or successor trustee or other estate representative to the extent permitted by law
• An allowed administrative claim under sections 503(b) and 507(b) (the "Adequate Protection Super-Priority Claim"), to the extent the Adequate Protection Liens do not adequately protect against any Diminution in Value, subordinate to the Carve-Out, the DIP Liens, the Super-Priority Claim, and the Non-Consensual Liens
• Payment by the Debtors of the fees and expenses of:
  • The Magnetar Noteholders
  • DKH Capital LLC, as collateral agent for the Bridge Noteholders
  • All other Bridge Noteholders, up to $10,000 in the aggregate
  • The Mezzanine Noteholders, up to $10,000 in the aggregate
  • The Secured Convertible Noteholders, up to $15,000 in the aggregate ($10,000 for Sesame Workshop and $5,000 for Dave Pottruck)
• The adequate protection is provided in exchange for the noteholders' consent to (or agreement not to oppose) the subordination of the Pre-Petition Liens to the DIP Liens, the Debtors' use of their cash collateral, and the other relief granted in the DIP orders

Waivers

• Section 506(c): Subject to the Carve-Out, no costs or expenses of administration of the Chapter 11 Cases or any Successor Case shall be charged against or recovered from the Consenting Pre-Petition Noteholders, the DIP Lenders, or the DIP Bridge Lender with respect to the DIP Collateral or the Pre-Petition Collateral, absent their prior written consent, and no such consent shall be implied from any action or inaction
• No Marshaling: The Consenting Pre-Petition Noteholders, the DIP Lenders, and the DIP Bridge Lenders shall not be subject to the equitable doctrine of "marshaling" or any similar doctrine with respect to the DIP Collateral or the Pre-Petition Collateral
• Section 552(b): The DIP Lenders and the DIP Bridge Lenders are entitled to all rights and benefits of section 552(b), and the "equities of the case" exception shall not apply
• With respect to the Additional DIP Loans, each of the foregoing waivers is subject to entry of the Second Final DIP Order
• Indemnification: The Debtors and the DIP Lenders indemnify the DIP Agent and its related parties from all liabilities relating to the DIP facility, except those resulting from the DIP Agent's gross negligence or willful misconduct
• The automatic stay is modified to the extent contemplated by the provisions of the DIP facility
• No waiver or modification of the right to file a plan or of plan exclusivity is requested by the motion, and no limitations on the Court's authority are imposed

Releases

• Subject to paragraph 41 (the Challenge Period provisions), the Debtors, on behalf of themselves and their Estates, absolutely and unconditionally release and forever discharge each of the DIP Agent, DIP Lenders, DIP Bridge Lenders, and the Magnetar Noteholders, together with their respective affiliates and representatives (the "Released Parties"), solely in their capacities as such, from all claims and causes of action arising on or prior to the date of the Final Order relating to the DIP Documents, the DIP Bridge Documents, the Magnetar Notes, and the transactions contemplated thereby
• The Debtors further waive and release any defense, right of counterclaim, right of set-off, or deduction to payment of the DIP Bridge Obligations or the Magnetar Notes
• To the extent any of the bridge DIP lenders are "insiders" as defined in section 101(31), the releases are effective with respect to the Additional DIP Loans only upon entry of the Second Final DIP Order

Permitted Variance

• The proceeds of the DIP Loan shall be used strictly in accordance with a 13-week budget approved by the DIP Agent (the "Approved DIP Budget"), subject to a 15% aggregate variance for all expenses each week (the "Permitted Variance" or "Allowed Variance") (note: the Final Order's Budget finding elsewhere describes the DIP Budget as covering through the end of the 28th calendar week following the Petition Date)
• No variance from or amendment to the Approved DIP Budget shall increase the amounts that the Borrowers are authorized to borrow under the DIP Facility
• The interim budget accompanying the motion to increase the facility reflects anticipated cash receipts and disbursements for each calendar week from the date of the motion through the end of the sixth calendar week following the motion. The DIP Agent and the Debtors are to meet weekly to discuss the budget, or less frequently in the DIP Agent's sole discretion, and the Debtors may propose amendments that the DIP Agent may approve in its sole discretion, without further notice or Court order.
• The interim budget, dated Aug. 24, 2026 and attached to the Shenoy Declaration, opens with a cash balance of approximately $73,600 and projects total operating disbursements of approximately $3.3 million over the six-week period

Conversion, Exit Financing, and Warrants

• The DIP Loans are evidenced by Secured Convertible Notes. Upon the Effective Date, each DIP Lender may, at its option (as to its own Note), convert the aggregate unpaid principal amount of its Advances (plus DIP Obligations paid in kind and added to principal) plus accrued and unpaid interest into shares of New Preferred Equity (Series A) in connection with the Exit Financing
  • The number of shares issued equals the DIP Lender's Outstanding Amount plus accrued and unpaid interest, divided by the lowest price paid per share for the New Preferred Equity (Series A) by any investor at any closing forming part of the Exit Financing (rounded down for fractional shares); conversion satisfies and discharges the Borrowers' obligations under the Note to that extent
• New Preferred Equity (Series A): $18,500,000 pre-money valuation, 8% dividend, 1.0x liquidation preference, and standard NVCA terms as specified in the Plan of Reorganization
• Exit Financing: Reorganized CCM will use best efforts to obtain commitments from prospective shareholders (each an accredited investor under Regulation D) for up to an additional $20,000,000 of working capital exit financing, in exchange for shares of New Preferred Equity (Series A)
  • As of the motion to increase the facility, the Debtors have obtained $20.0 million of signed and legally binding Exit Financing commitments, and are working to escrow all Exit Financing to close simultaneously with the Effective Date; remittances from two international investors remain outstanding pending their banks' know-your-customer requirements
  • Exit Financing funded into the DIP facility as Additional DIP Loans will automatically convert into New Preferred Equity (Series A) on the same economic terms as the other DIP Lenders
• Warrants: Each DIP Lender electing to convert receives 10-year warrants to purchase Common Stock of Reorganized CCM at an exercise price of $0.01 per share, with coverage based on investment tranche:
  • Tier 1 ($0–$200,000): 23%
  • Tier 2 ($200,001–$400,000): 28%
  • Tier 3 ($400,001–$600,000): 33%
  • Tier 4 ($600,001–$800,000): 38%
  • Tier 5 ($800,001–$1,000,000): 43%
  • Tier 6 ($1,000,001–$1,200,000): 48%
  • Tier 7 ($1,200,001 and above): 50% (maximum)

Other Provisions

• Section 364(e): the Debtors assert the terms were negotiated in good faith and at arm's length and that the DIP Agent and DIP Lenders are entitled to the full protections of section 364(e), such that reversal or modification on appeal would not affect the validity of the debt incurred or the priority of the liens granted
• The Debtors request a final hearing no sooner than 14 days after the date of the motion; the proposed interim order leaves the final hearing date (September [__], 2026) and the objection deadline (4:00 p.m. ET) blank
• The Debtors seek a waiver of the notice requirements of Bankruptcy Rule 6004(a) and of the 14-day stay under Bankruptcy Rule 6004(h); the proposed interim order is immediately effective and enforceable upon entry, with no stay of execution