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

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
• 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

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

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

Interest Rate

• 14% per annum (the "Base Rate"), compounded annually
• Default Rate: 17% per annum, compounded annually
• 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

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
• 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

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

Carve Out

• Statutory Fees: all statutory fees payable to the Clerk of the Court and the U.S. Trustee, together with reasonable fees and expenses of a chapter 7 trustee under section 726(b) not exceeding $10,000
• 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; this cap does not limit the Statutory Fees and Allowed Professional Fees in the Chapter 11 Cases

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

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

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)

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
• 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

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
• 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)

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
• 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

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

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

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)
• 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)