CuriosityStream Inc 10-Q for FY2026 Q1
CuriosityStream Inc. (CURI)
10-Q
2026-05-14
For: 2026-03-31
View Original
Added on
May 15, 2026
About this 10-Q
CuriosityStream Inc filed this 10-Q on May 14, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $15.16M
- up 0.5% from $15.09M a year earlier
- Net loss
- $1.33M
- compared with net income of $319K a year earlier
- Diluted EPS
- -$0.02
- compared with $0.01 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 10-Q
_____________________
(MARK ONE)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended March 31, 2026
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _________ to _________
Commission file number: 001-39139
_____________________
(Exact Name of Registrant as Specified in Its Charter)
_____________________
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices)
(301 ) 755-2050
(Issuer’s telephone number)
_____________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||
| ☒ | Smaller reporting company | |||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of May 8, 2026, 59,287,600 shares of common stock of the registrant were issued and outstanding.
CURIOSITYSTREAM INC.
QUARTERLY REPORT ON FORM 10-Q
Table of Contents
| Page | |||||
Item 1. Financial Statements (unaudited) | |||||
Condensed Consolidated Balance Sheets | |||||
Condensed Consolidated Statements of Operations | |||||
Condensed Consolidated Statements of Cash Flows | |||||
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PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CURIOSITYSTREAM INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value) | March 31, 2026 | December 31, 2025 | |||||||||
(Unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
Short-term investments in debt and other securities | |||||||||||
| Accounts receivable, net | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Investments in debt securities | |||||||||||
| Investments in equity method investees | |||||||||||
| Property and equipment, net | |||||||||||
| Content assets, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and stockholders’ equity | |||||||||||
| Current liabilities | |||||||||||
| Content liabilities | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Accrued expenses and other liabilities | |||||||||||
| Deferred revenue | |||||||||||
| Total current liabilities | |||||||||||
| Non-current operating lease liabilities | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 13) | |||||||||||
| Stockholders’ equity | |||||||||||
Common stock, $ | |||||||||||
| Treasury stock | ( | ( | |||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
1
CURIOSITYSTREAM INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended March 31, | |||||||||||||||||||||||
(unaudited and in thousands except per share amounts) | 2026 | 2025 | |||||||||||||||||||||
| Revenues | $ | $ | |||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||
| Advertising and marketing | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Operating loss | ( | ||||||||||||||||||||||
| Change in fair value of warrant liability | ( | ||||||||||||||||||||||
| Interest and other income | |||||||||||||||||||||||
| Equity method investment income (loss) | ( | ||||||||||||||||||||||
| (Loss) income before income taxes | ( | ||||||||||||||||||||||
| Provision for income taxes | |||||||||||||||||||||||
| Net (loss) income | $ | ( | $ | ||||||||||||||||||||
| Net (loss) income per share | |||||||||||||||||||||||
| Basic | $ | ( | $ | ||||||||||||||||||||
| Diluted | $ | ( | $ | ||||||||||||||||||||
| Weighted average number of common shares outstanding | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
CURIOSITYSTREAM INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited and in thousands) | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Buyback of shares | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
CURIOSITYSTREAM INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three Months Ended March 31, | |||||||||||
(unaudited and in thousands) | 2026 | 2025 | |||||||||
| Cash flows from operating activities | |||||||||||
| Net (loss) income | $ | ( | $ | ||||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities | |||||||||||
| Change in fair value of warrant liability | |||||||||||
| Additions to content assets | ( | ( | |||||||||
| Change in content liabilities | ( | ( | |||||||||
| Amortization of content assets | |||||||||||
| Depreciation and amortization expenses | |||||||||||
| Amortization of premiums and accretion of discounts associated with investments in debt securities, net | ( | ( | |||||||||
| Stock-based compensation | |||||||||||
| Equity method investment (income) loss | ( | ||||||||||
| Other non-cash items | |||||||||||
| Changes in operating assets and liabilities | |||||||||||
| Accounts receivable | ( | ||||||||||
| Other assets | ( | ||||||||||
| Accounts payable | ( | ( | |||||||||
| Accrued expenses and other liabilities | |||||||||||
| Deferred revenue | ( | ||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities | |||||||||||
| Purchases of property and equipment | ( | ||||||||||
| Sales of investments in debt securities | |||||||||||
| Maturities of investments in debt securities | |||||||||||
| Purchases of investments in debt securities | ( | ( | |||||||||
| Net cash provided by investing activities | |||||||||||
| Cash flows from financing activities | |||||||||||
| Repurchases of common stock | ( | ||||||||||
| Dividends paid | ( | ( | |||||||||
| Payments related to tax withholding | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | ( | ||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||||
| Supplemental disclosure: | |||||||||||
| Cash paid for taxes, net | $ | $ | |||||||||
| Cash paid for operating leases | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
CURIOSITYSTREAM INC.
UNAUDITED NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND BUSINESS
On October 14, 2020, Software Acquisition Group Inc., a special purpose acquisition company and a Delaware corporation (“SAQN”), consummated a reverse merger pursuant to that certain Agreement and Plan of Merger, dated August 10, 2020 (the “Business Combination”). Upon the consummation of the Business Combination, CuriosityStream Operating Inc., a Delaware corporation (“Legacy CuriosityStream”) became a wholly owned subsidiary of SAQN, and the registrant changed its name from “Software Acquisition Group Inc.” to “CuriosityStream Inc.” Following the consummation of the Business Combination, Legacy CuriosityStream changed its name from “CuriosityStream Operating Inc.” to “Curiosity Inc.”
The principal business of CuriosityStream Inc. (the "Company" or "CuriosityStream") is providing customers with access to high quality factual content via subscription or license.
The Company's online library available for streaming spans the entire category of factual entertainment including science, history, society, nature, lifestyle, and technology packaged as three distinct subscription video-on-demand (“SVOD”) services: the flagship Curiosity Stream, Curiosity University and Catholic Stream. Individual customers can purchase subscriptions directly via the Company’s SVOD platform accessible by internet connected devices and applications for such devices as well as through distributor channel stores offering subscriptions to Company products on an a la carte basis. Individual subscriptions may be monthly or annual and pricing may vary based on the customer’s location worldwide. Customers may also subscribe to Company services indirectly via distribution partners who deliver CuriosityStream content via the distributor’s platform or system. Such wholesale distribution agreements typically convey a broad scope of rights, such as access to a 24/7 linear channel and an on-demand content library, with pricing and packaging flexibility, in exchange for an annual fixed fee or per-subscriber fee as part of a multi-year deal. The streaming library is composed of thousands of accessible on-demand and ad-free productions and includes shows and series from leading nonfiction producers.
The Company also has a substantial licensing business. Traditionally this business focused on content licensing of CuriosityStream’s library of 15,000 hours of factual entertainment content to other media companies and distributors worldwide, typically for a fee per hour of content. CuriosityStream’s traditional content licensing business is global, and licensed rights vary by platform or outlet, such as SVOD, FAST and Pay TV. The Company also owns, licenses or has access to millions of hours of content, both finished and raw, across the landscape of content genres and languages, as well as hundreds of millions of tokens of code and other datasets for sublicensing to technology companies to train artificial intelligence (AI) models and products that utilize AI.
CuriosityStream’s other businesses include advertising, such as FAST and AVOD channels and advertising on its Pay TV channels.
NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying Unaudited Condensed Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and are consistent in all material respects with those applied in the Company’s Condensed Consolidated Financial Statements as of and for the year ended December 31, 2025.
5
USE OF ESTIMATES
Revenue Recognition
The Company recognizes revenue as performance obligations are satisfied by transferring control of promised goods or services to customers in an amount that reflects the consideration the Company expects to receive. The Company’s revenue is classified into three primary categories: Subscription, Licensing, and Other.
Subscription revenue is derived from arrangements providing ongoing access to the Company’s streaming content library. This includes subscriptions sold through our direct business and via wholesale distribution agreements. Revenue is recognized on a straight-line basis over the contractual term as the customer simultaneously receives and consumes the benefit of the service. For arrangements via wholesale distribution agreements, the Company recognizes revenue straight-line over the term of the applicable distribution agreement or based on reported subscriber counts.
Licensing revenue is generated through the monetization of the Company’s content library and proprietary data assets, including traditional library sales to media companies, AI data licensing for model training, and non-monetary barter transactions. These arrangements represent the transfer of functional intellectual property. Revenue is generally recognized at the point in time when the license period begins and the content or data is made available for the customer’s use. For barter exchanges, revenue is recognized upon delivery and acceptance of the assets and at the fair value of services received.
Concentration of Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents, investments, and accounts receivable. The Company maintains its cash and cash equivalents with high credit quality financial institutions. At times, cash balances with the financial institutions may exceed the applicable Federal Deposit Insurance Corporation (FDIC)-insured limits.
Investments in debt securities are held with reputable institutions and are monitored to manage credit risk exposure.
Investments in Debt Securities
The Company classifies its investments in debt securities as held-to-maturity ("HTM") under ASC “Accounting Standards Codification” 320, "Investments—Debt and Equity Securities." HTM investments represent securities
6
for which the Company has the positive intent and ability to hold to maturity, and they are reported at amortized cost.
Investments with original maturities of three months or less from the date of purchase are classified as cash equivalents. Investments with longer maturities are classified as short-term or long-term investments based on the remaining maturity at each balance sheet date and the Company’s intent to hold the security. Interest income earned from HTM investments is recognized in the Unaudited Condensed Consolidated Statement of Operations as “Interest and other Income” under non-operating income.
Fair Value Measurement of Financial Instruments
Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The applicable accounting guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The accounting guidance establishes three levels of inputs that may be used to measure fair value:
•Level 1: Quoted prices in active markets for identical assets or liabilities.
•Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
•Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification at each reporting period. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.
The Company’s assets measured at fair value on a recurring basis have included its investments in money market funds, U.S. government securities, corporate debt securities, as well as assets held in a rabbi trust related to the Company’s non-qualified deferred compensation (“NQDC”) plan. Level 1 inputs were derived by using unadjusted quoted prices for identical assets in active markets and were used to value the Company’s investments in money market funds, U.S. government debt securities, and the NQDC plan assets. Level 2 inputs were derived using prices for similar investments and were used to value the Company’s investments in corporate and municipal debt securities.
The Company’s liabilities previously measured at fair value on a recurring basis included its Private Placement Warrants issued to Software Acquisition Holdings LLC, the Company’s former Sponsor. All such Private Placement Warrants expired on October 14, 2025, at which time the associated liability was reduced to zero . Prior to their expiration, the fair value of the Private Placement Warrants was considered a Level 3 valuation and was determined using the Black-Scholes valuation model. Refer to Note 6 - Stockholders' Equity for significant assumptions which the Company used in the fair value model for the Private Placement Warrants during the periods the warrants were outstanding.
7
RECENT ACCOUNTING PRONOUNCEMENTS
As of December 31, 2025, the Company ceased to be an "emerging growth company," as defined in the Jumpstart Our Business Startups Act (JOBS Act), because that date marked the last day of the fiscal year following the fifth anniversary of the Company’s initial public offering. While the Company previously elected to use the extended transition period provided by the JOBS Act to delay the adoption of new or revised accounting pronouncements until such time as those pronouncements were applicable to private companies, the sunset of its emerging growth company status means the Company is now generally required to comply with new or revised accounting standards on the timelines applicable to public business entities.
The Company continues to qualify as a “smaller reporting company” and a “non-accelerated filer” under the rules of the Securities and Exchange Commission. Although the Company has transitioned to the adoption timelines for public business entities, as a smaller reporting company, it may still be eligible to take advantage of certain accommodations and alternative effective dates for specific accounting standards where the Financial Accounting Standards Board (FASB) allows for a staggered adoption for smaller registrants. The Company will evaluate the impact of any such standards on its consolidated financial statements as they are issued.
Accounting Pronouncements Issued but not Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. In January 2025, the FASB issued ASU 2025-01, Clarifying the Effective Date, which amended the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The standard allows for adoption using either a prospective or a retrospective method of transition. The Company is currently evaluating the impact of adopting ASU 2024-03, including the clarification provided by ASU 2025-01.
NOTE 3 - EQUITY INVESTMENTS
EQUITY INVESTMENTS
On November 14, 2025, the Company executed a Series Seed Preferred Share Purchase Agreement to acquire a minority equity interest in a private AI technology company. As of December 31, 2025, the Company holds 1,217,730 Series 2 Seed Preferred Shares, representing approximately a 2.60 % ownership interest on a fully diluted basis. These shares are convertible into common stock at the Company's option and carry a liquidation preference of $0.20530 per share. The shares are non-redeemable and represent a permanent equity interest in the investee. The shares entitle the Company to dividend and voting rights on an as-converted basis and provide certain protective rights over major corporate actions of the investee. The total cash consideration for this investment was $0.2 million, which was recorded as an accrued investment payable at December 31, 2025, and subsequently settled in cash on January 2, 2026.
8
The Company holds equity investments in Spiegel TV Geschichte und Wissen GmbH & Co. KG (the “Spiegel Venture”) and Watch Nebula LLC (“Nebula”). The Company accounts for these investments under the equity method of accounting. The carrying value of the Company’s equity method investment in the Spiegel Venture was reduced to zero
(in thousands) | Total | ||||||||||||||||
| Balance at December 31, 2025 | $ | ||||||||||||||||
| Equity method investment income | |||||||||||||||||
| Balance at March 31, 2026 | $ | ||||||||||||||||
SPIEGEL VENTURE
In July 2021, the Company acquired a 32 % ownership in the Spiegel Venture for an initial investment of $3.3 million. The Spiegel Venture, which prior to the Company’s equity purchase, was jointly owned and operated by Spiegel TV GmbH (“Spiegel TV”) and Autentic GmbH (“Autentic”), operates two documentary channels, and a free advertising-supported streaming television (FAST) channel, and receives a share of revenue from the Company's German-language SVOD service. The Spiegel Venture provides factual content to audiences in Germany and certain German-speaking regions of other countries. As of December 31, 2024, the Company’s carrying value in the Spiegel Venture was written down to zero as the Company’s share of cumulative losses exceeded its initial investment. The Company has not received any dividends from the Spiegel Venture as of March 31, 2026.
The Company has a call option that permits it to require Spiegel TV and Autentic to sell their respective ownership interests in the Spiegel Venture (the “Call Option”) to the Company. The Call Option, exercisable at a value based on a determinable calculation in the Share Purchase Agreement (“SPA”), is initially exercisable only during the period that is the later of (i) 30 business days following the adoption of the Spiegel Venture’s audited financial statements for the fiscal year 2025, and (ii) the period between March 1, 2026, and March 31, 2026.
Together with the Call Option, each of Spiegel TV and Autentic has a put option that permits it to require the Company to purchase their interest (“Put Option”) at a value based on a determinable calculation outlined in the SPA. The Put Option is initially exercisable only during the period that is the later of i) the 60-day period following the adoption of Spiegel Venture’s audited financial statements for the fiscal year 2025, and (ii) the period between April 1, 2026, and April 30, 2026.
In April 2026, Spiegel TV and Autentic exercised their respective Put Options. The aggregate purchase price payable by the Company is calculated to be $1.9 million based on the formula set forth in the SPA and the Spiegel Venture’s audited 2025 results. The Company expects to finalize the acquisition in mid-2026, at which point it will own 100 % of the Spiegel Venture and begin consolidating its financial results. For additional information regarding our pending acquisition of Spiegel Venture, please see Note 16 — Subsequent Events.
NEBULA
Nebula is an SVOD technology platform built for and by a group of independent content creators. Prior to the Company’s investment, Nebula was a wholly owned subsidiary of Standard Broadcast LLC (“Standard”). On August 23, 2021, the Company purchased a 12 % ownership interest in Nebula for $6.0 million. Upon its initial investment, the Company obtained 25 % representation on Nebula’s board of directors.
Since the time of its original investment, the Company purchased additional incremental ownership interests, each for a payment of $0.8 million and representing 1.625 % of equity ownership, if Nebula met certain quarterly targets. The Company made three subsequent incremental purchases, bringing its total ownership interest in Nebula to 16.875 % as of March 31, 2026. The opportunity or obligation to make additional purchases ended as of September 30, 2023. Because the Company did not purchase at least two consecutive ownership interests in Nebula, effective December 15, 2023, Standard removed the Company’s seat on the Nebula board of directors. The Company has not received dividends from Nebula as of March 31, 2026.
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Beginning August 2021, the Company included access to Nebula’s SVOD service as a part of a combined CuriosityStream / Watch Nebula subscription offer and as part of the Company’s Smart Bundle subscription package. As part of this arrangement, the Company shared revenue with Nebula based on certain metrics and paid monthly. On September 26, 2023, Nebula provided the Company with a notice of non-renewal, resulting in the expiration of the revenue share agreement at the end of 2023. Nebula was required to make its service available to subscribers of these offerings through the end of the term of any such subscription that existed as of December 31, 2023.
NOTE 4 - BALANCE SHEET COMPONENTS
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND INVESTMENTS
A reconciliation of the Company’s cash and cash equivalents in the Unaudited Condensed Consolidated Balance Sheets to cash, cash equivalents and restricted cash in the Unaudited Condensed Consolidated Statements of Cash Flows is as follows:
(in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Restricted cash1 | |||||||||||
| Cash and cash equivalents and restricted cash | $ | $ | |||||||||
1 Restricted cash included cash deposits required by a bank as collateral related to corporate credit card agreements. | |||||||||||
The Company’s investments in debt securities at fair value based on unadjusted quoted market prices (Level 1) and quoted prices for comparable assets (Level 2) were as follows as of March 31, 2026, and December 31, 2025:
| As of March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Cash and Cash Equivalents | Short-Term Investments | Investments (Non-Current) | Total | |||||||||||||||||||||||||||||||||||||
| Level 1 securities: | |||||||||||||||||||||||||||||||||||||||||
| Money market funds | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Mutual funds | |||||||||||||||||||||||||||||||||||||||||
| Total Level 1 securities | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Level 2 securities: | |||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||||||||||||||||||||
| Total Level 2 securities | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
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| As of December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||
| (in thousands) | Cash and Cash Equivalents | Short-Term Investments | Investments (Non-Current) | Total | |||||||||||||||||||||||||||||||||||||
| Level 1 securities: | |||||||||||||||||||||||||||||||||||||||||
| Money market funds | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Mutual funds | |||||||||||||||||||||||||||||||||||||||||
| U.S. government securities | |||||||||||||||||||||||||||||||||||||||||
| Total Level 1 securities | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
| Level 2 securities: | |||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||||||||||||||||||||
| Total Level 2 securities | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
The following table provides the amortized cost and estimated fair value of investments with fixed maturities as of March 31, 2026:
| As of March 31, 2026 | |||||||||||||||||||||||
| (in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||
| Corporate debt securities | ( | ||||||||||||||||||||||
The Company recorded no
For the three months ended March 31, 2026, the Company recorded a nominal amount of net investment income and an unrealized loss related to the mutual funds held in the Rabbi Trust related to the NQDC plan, which is included in Interest and other income, net in the Unaudited Condensed Consolidated Statements of Operations.
Accrued interest on held-to-maturity securities is excluded from the amortized cost basis. As of March 31, 2026, the total accrued interest receivable excluded from the disclosed amortized cost basis was immaterial , net of any allowance for credit losses.
The Company’s held-to-maturity investments as of March 31, 2026, consist of short term, investment-grade debt securities, primarily corporate bonds and U.S. Treasury securities. Based on external credit ratings and economic forecasts, the Company determined that the expected credit losses over the lifetime of these securities are immaterial. Therefore, no allowance for credit losses has been recorded for these securities as of March 31, 2026.
The following table provides the amortized cost and estimated fair value of investments with fixed maturities by maturity date as of March 31, 2026:
| As of March 31, 2026 | |||||||||||
| (in thousands) | Amortized Cost | Estimated Fair Value | |||||||||
| Due in one year or less | $ | $ | |||||||||
| Due after one year through five years | |||||||||||
| Total | $ | $ | |||||||||
Our investment in the private AI technology company is an equity security without a readily determinable fair value and is measured using the measurement alternative under ASC 321; accordingly, it is not categorized within the fair value hierarchy.
11
CONTENT ASSETS
Content assets consisted of the following as of March 31, 2026, and December 31, 2025:
(in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Licensed content, net: | |||||||||||
Released, less amortization and impairment | $ | $ | |||||||||
| Prepaid and unreleased | |||||||||||
| Total Licensed content, net | |||||||||||
| Produced content, net: | |||||||||||
Released, less amortization and impairment | |||||||||||
| In production | |||||||||||
Total produced content, net | |||||||||||
Total content assets | $ | $ | |||||||||
Of the $9.4 million unamortized cost of licensed content that had been released as of March 31, 2026, the Company expects that $6.2 million, $1.8 million and $0.4 million will be amortized in each of the next three years. Of the $8.7 million unamortized cost of produced content that had been released as of March 31, 2026, the Company expects that $4.2 million, $3.0 million and $1.1 million will be amortized in each of the next three years.
As of March 31, 2026, the Company has licensed content that is contractually completed but not yet released. The timing of the release for this content is uncertain, and therefore, the Company cannot reasonably estimate the portion of costs that will be amortized in the next 12 months. The Company will recognize amortization once the content is published and available for monetization.
Content assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. No
Amortization
In accordance with its accounting policy for content assets, the Company amortizes licensed content costs and produced content costs, which are included within cost of revenues in the Company’s Unaudited Condensed Consolidated Statements of Operations. For the three months ended March 31, 2026, and 2025, content amortization was as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | |||||||||||||||||||||
| Licensed content | $ | $ | |||||||||||||||||||||
| Produced content | |||||||||||||||||||||||
| Total | $ | $ | |||||||||||||||||||||
12
ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued expenses and other liabilities consisted of the following as of March 31, 2026, and December 31, 2025:
| (in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Accrued payroll and benefits | $ | $ | |||||||||
| Accrued revenue share | |||||||||||
| Sales and income tax liabilities | |||||||||||
| Dividends payable | |||||||||||
| Accrued royalties | |||||||||||
| Other | |||||||||||
| Total | $ | $ | |||||||||
CREDIT FACILITY
On March 12, 2026, the Company entered into a Credit Agreement with Citibank, N.A., providing for a $10.0 million Senior Secured Revolving Credit Facility (the "Credit Facility"). The Credit Facility has a three-year term maturing on March 12, 2029, and is secured by a first-priority lien on substantially all assets of the Company and its domestic subsidiaries. Borrowings under the Credit Facility bear interest at a rate per annum equal to, at the Company's option, either (i) a floating rate plus 3.00 % or (ii) Adjusted Term SOFR plus 3.00 %. The Company is required to pay an unused fee of 0.35 % per annum on the average daily unused portion of the facility. For the three months ended March 31, 2026, the Company recorded immaterial unused fees, which are included within general and administrative expenses in the Unaudited Condensed Consolidated Statements of Operations.
The Credit Facility includes a $2.0 million sublimit for the issuance of letters of credit and an accordion feature allowing the Company to request increases in the revolving commitment an aggregate principal amount of $20.0 million, subject to lender consent. The Credit Facility contains customary financial covenants, including a Consolidated Leverage Ratio not to exceed 3.00 :1.00 and a Unaudited Condensed Consolidated Interest Coverage Ratio of not less than 3.00 :1.00. Additionally, the agreement restricts the payment of cash dividends or the repurchase of equity interests unless the Company maintains liquidity (defined as unrestricted cash plus facility availability) of at least $10.0 million, after giving effect to such payment. As of March 31, 2026, the Company was in compliance with all covenants under the Credit Facility.
As of March 31, 2026, there were no outstanding borrowings under the 2026 Credit Facility. In connection with entering into the facility, the Company incurred $0.1 million in debt issuance costs, that are included within Other assets in the Unaudited Condensed Consolidated Balance Sheets. These costs are being amortized to general and administrative expense over the 36-month term of the facility. For the three months ended March 31, 2026, the Company recorded an immaterial amount of amortization expense related to these costs.
NOTE 5 - REVENUE
The following table sets forth the Company’s disaggregated revenues for the three months ended March 31, 2026, and 2025, as well as the relative percentage of total revenue:
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Subscription | % | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Licensing (1) | % | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Other | % | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
(1) The 2026 and 2025 amounts include $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
13
REMAINING PERFORMANCE OBLIGATIONS
As of March 31, 2026, the Company expects to recognize revenues in the future related to performance obligations that were unsatisfied as follows:
| Remainder of Year Ending December 31, 2026 | Year Ended December 31, | ||||||||||||||||||||||||||||||||||
(in thousands) | 2027 | 2028 | 2029 | Thereafter | Total | ||||||||||||||||||||||||||||||
| Remaining performance obligations | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
These amounts include only fixed consideration or minimum guarantees and do not include amounts related to (a) contracts with an original expected term of one year or less or (b) licenses of content that are solely based on sales or usage-based royalties.
DEFERRED REVENUE
Contract liabilities (i.e., deferred revenue) consist of subscriber and affiliate license fees billed that have not been recognized, amounts contractually billed or collected for content licensing sales in advance of the related content being made available to the customer, and unredeemed gift cards and other prepaid subscriptions that have not been redeemed. Approximately 90 % of the contract liability balance relates to annual subscriptions.
Total deferred revenues were $8.9 million and $8.7 million as of March 31, 2026, and December 31, 2025, respectively. The non-current portions of $0.3
For the three months ended March 31, 2026, the Company recognized revenues of 3.7 million related to amounts deferred as of December 31, 2025.
The following table provides a roll-forward of the contract liability balances for the three months ended March 31, 2026, and 2025:
| Three Months Ended March 31, | ||||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||
| Revenue recognized in the current period from beginning balance | ( | ( | ||||||||||||
| New deferrals, net of amounts recognized in current period | ||||||||||||||
| Balance at end of period | $ | $ | ||||||||||||
TRADE AND BARTER TRANSACTIONS
During 2026, the Company continued to enter into trade and barter transactions, primarily for the purpose of exchanging content assets through licensing agreements with media counterparties.
For content acquired through trade and barter transactions, the Company records the acquired assets in the consolidated balance sheet and amortizes those assets over the term of the content license, beginning at the time the asset is published, in accordance with the Company’s content and amortization policies. For other products and services received through trade and barter transactions, the Company records operating expenses upon receipt of such products and services, as applicable.
The transaction price for these contracts is measured at the estimated fair value of the non-cash consideration received unless this is not reasonably estimable, in which case, the consideration is measured based on the standalone selling price of the services provided. For an exchange of content, the performance obligation is satisfied at the time the content is made available for the counterparty to use, which represents the point in time that control is transferred. For advertising, the performance obligation is satisfied upon the Company’s delivery of the media campaign or other service to the counterparty.
14
For the three months ended March 31, 2026, and 2025, trade and barter revenues were as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
(in thousands) | 2026 | 2025 | |||||||||||||||||||||
Trade and barter license fees: Content Licensing | $ | $ | |||||||||||||||||||||
For the three months ended March 31, 2026, and 2025, trade and barter cost of revenues were as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
(in thousands) | 2026 | 2025 | |||||||||||||||||||||
| Cost of revenues | $ | $ | |||||||||||||||||||||
For the three months ended March 31, 2026, and 2025, additions to content assets resulting from trade and barter transactions were as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
(in thousands) | 2026 | 2025 | |||||||||||||||||||||
| Content assets acquired | $ | $ | |||||||||||||||||||||
NOTE 6 - STOCKHOLDERS’ EQUITY
COMMON STOCK
As of March 31, 2026, and December 31, 2025, the Company had authorized the issuance of 126,000,000 0.0001 125,000,000 1,000,000
TREASURY STOCK
On June 10, 2024, the Company's Board of Directors authorized and approved a share repurchase program for up to $4.0 million of the then-outstanding shares of the Company’s common stock. Under the stock repurchase program, the Company may repurchase shares through open market purchases, privately negotiated transactions, block purchases, or otherwise in accordance with applicable federal securities laws. On March 10, 2026, the Board authorized an additional $2.0 million for the purchase of the Company’s common stock under this existing program, increasing the total authorized amount to $6.0 million.
As of December 31, 2025, the Company had repurchased 216,000 shares of its common stock at an average price of $1.16 per share. The total cost of the repurchases was $0.3 million. The Company purchased additional 90,000 shares at an average price of $3.46 per share for a total of $0.3 million during the three months ended March 31, 2026. The purchased shares were recorded as treasury stock in the equity section of the Company’s Unaudited Condensed Consolidated Balance Sheets.
As of March 31, 2026, $5.4 million remains available for future repurchases under the Board-authorized program.
WARRANTS
All of the Company’s outstanding Warrants expired unexercised on October 14, 2025. As of December 31, 2025, there were no zero . Prior to their expiration, the Company had 3,054,203 Public Warrants and 3,676,000 Private Placement Warrants outstanding. Each whole warrant entitled the registered holder to purchase one share of the Company’s common stock at an exercise price of $11.50 per share. The Private Placement Warrants were liability-classified, and the Public Warrants were equity-classified. No warrants were exercised during the three months ended March 31, 2025.
15
The Private Placement Warrants were recorded at fair value as of each reporting date with the change in fair value reported in the accompanying Unaudited Condensed Consolidated Statements of Operations as “Change in fair value of warrant liability.” The fair value of the Private Placement Warrant liability was estimated using a Black-Scholes pricing model with Level 3 inputs. As of September 30, 2025, the fair value of the Private Placement Warrants was determined to be zero as the Warrants were significantly out-of-the-money and approaching their expiration date. Because the Private Placement Warrants were written down to zero during the third quarter of 2025, and subsequently extinguished upon expiration, no fair value measurements or significant assumptions were required for the Black-Scholes model as of December 31, 2025. The significant assumptions used to determine fair value as of March 31, 2025, were as follows:
March 31, 2025 | |||||
| Exercise price | $ | ||||
| Stock price (CURI) | $ | ||||
| Expected volatility | % | ||||
| Expected warrant term (years) | |||||
| Risk-free interest rate | % | ||||
| Dividend yield | % | ||||
| Fair Value per Private Placement Warrant | $ | ||||
The change in fair value of the private placement warrant liability was negligible for the three months ended March 31, 2025.
NOTE 7 - EARNINGS (LOSS) PER SHARE
Basic and diluted earnings (loss) per share are computed based on the weighted-average number of shares of the Company’s common stock outstanding during the respective periods. Diluted earnings (loss) per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted, using the treasury stock method for stock options, restricted stock units (“RSUs”), and other potentially dilutive instruments. For RSUs, the assumed proceeds under the treasury stock method include the amount of unrecognized compensation cost. Potential common shares are excluded from the diluted per share calculation when their effect is anti-dilutive, including in periods of net loss or when inclusion does not result in a decrease in earnings per share.
For the three months ended March 31, 2026, and 2025, the components of basic and diluted net (loss) income per share were as follows:
(in thousands except per share amounts) | Three Months Ended March 31, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Numerator — basic and diluted EPS: | |||||||||||||||||||||||
| Net (loss) income | $ | ( | $ | ||||||||||||||||||||
| Denominator — basic and diluted EPS: | |||||||||||||||||||||||
| Weighted–average shares | |||||||||||||||||||||||
| Net (loss) income per share — basic and diluted | $ | ( | $ | ||||||||||||||||||||
16
The following table summarizes common shares issuable for stock options and restricted stock units as of March 31, 2026, and for warrants, stock options, and restricted stock units as of March 31, 2025. For the three months ended March 31, 2026, and 2025, these share equivalents were excluded from the calculation of diluted net (loss) income per share as their inclusion would have been anti-dilutive.
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | |||||||||||||||||||||
| Options | |||||||||||||||||||||||
| Restricted stock units | |||||||||||||||||||||||
| Warrants | |||||||||||||||||||||||
Total | |||||||||||||||||||||||
NOTE 8 - STOCK-BASED COMPENSATION
In October 2020, the Board adopted the CuriosityStream 2020 Omnibus Plan (the “2020 Plan”). The 2020 Plan became effective upon consummation of the Business Combination and succeeds the Legacy CuriosityStream Stock Option Plan. Upon adoption of the 2020 Plan, a total of 7,725,000 shares were approved to be issued as stock options, share appreciation rights, restricted stock units and restricted stock. In June 2025, the Company’s stockholders approved an amendment to the 2020 Plan to increase the number of shares of common stock reserved for issuance thereunder by 3,000,000 shares, bringing the total number of shares reserved for issuance thereunder to 10,725,000 shares.
Stock options and RSUs generally vest on a monthly, quarterly, or annual basis over a period of up to four years
The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award, recognizing the expense in earnings over the period during which an employee is required to provide the service. Expense for time-based awards is recognized on a straight-line basis over the requisite service period. Expense for awards with accelerated vesting subject to performance or market-based triggers is recognized over the shorter of the derived or requisite time-based service period. Forfeitures are accounted for as they occur.
STOCK OPTIONS
The fair value of stock option awards is estimated using the Black-Scholes option pricing model, which incorporates assumptions regarding stock price volatility, employee exercise behavior, future dividend payments, and risk-free interest rates. Due to a lack of sufficient historical exercise behavior, the Company utilizes the simplified method to estimate the expected term, representing the midpoint between the vesting date and the end of the contractual term. Volatility is estimated using the Company’s historical volatility alongside that of similar public companies, while the risk-free interest rate is based on the rate of return on U.S. Treasury securities with maturities approximating the expected term. No
As of March 31, 2026, all outstanding stock options were fully exercisable with a weighted-average exercise price of $5.00 and a weighted-average remaining contractual term of 3.42 years. There were no unvested stock options as of March 31, 2026.
17
RSUs
The Company issues RSU awards that vest upon continued service, the achievement of performance conditions, or the attainment of specified market conditions. Certain RSU awards include dividend equivalent rights (“DERs”) on dividends declared during the vesting period. These DERs are forfeitable until the underlying RSUs vest and are payable in cash upon vesting. Upon the declaration of dividends, the Company records the related DERs as a dividend payable with a corresponding charge to accumulated deficit. DERs do not result in additional share-based compensation expense.
During the year ended December 31, 2025 and three months ended March 31, 2026, the Company granted RSU awards to employees and senior leadership, a significant portion of which were granted in July 2025 and included tranches that vest upon (i) achievement of specified market conditions or (ii) performance conditions or (iii) continued service through dates generally ranging from to four years .
For tranches with market condition-based vesting terms, grant-date fair value was estimated using a Monte Carlo simulation. Key inputs for this simulation included an expected volatility of 85.5 %, risk-free interest rates ranging from 3.57 % to 3.95 %, an expected dividend yield ranging from 6.5 % to 9.2 %, and an assumed correlation with peer indices of 1.54 to 1.67 . Compensation expense is recognized over the derived service period and is therefore front-loaded, with the majority expected to be recognized in the first three quarters following grant.
For tranches with vesting terms based on performance conditions, grant-date fair value equals the Company’s common stock closing price on the grant date; compensation expense is recognized when achievement of the performance condition is considered probable, on a straight-line basis over the remaining requisite service period.
The following table summarizes stock option and RSU activity, prices, and values for the three months ended March 31, 2026:
Number of Shares Available for Issuance Under the Plan | Stock Options | Restricted Stock Units | |||||||||||||||||||||||||||||||||
(in thousands except share price and fair value amounts) | Number of Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (in Years) | Number of Shares | Weighted- Average Grant Date Fair Value | ||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | |||||||||||||||||||||||||||||||||
| Granted | ( | — | |||||||||||||||||||||||||||||||||
| RSUs vested | — | ( | |||||||||||||||||||||||||||||||||
| Forfeited or expired | — | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | |||||||||||||||||||||||||||||||||
For the three months ended March 31, 2026, and 2025, stock-based compensation expense was as follows:
(in thousands) | Three Months Ended March 31, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Stock-based compensation — RSUs | |||||||||||||||||||||||
The following table summarizes total fair value of RSUs that vested during the three months ended March 31, 2026, and 2025. This value is calculated based on the closing market price of the Company’s common stock on the applicable vesting dates.
| (in thousand) | Three Months Ended March 31, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Fair value of vested RSUs | $ | $ | |||||||||||||||||||||
18
As of March 31, 2026, the total remaining unrecognized compensation cost related to unvested restricted stock units was approximately $4.3 million. This cost is expected to be recognized over a weighted average remaining period of 0.62 years.
NOTE 9 - SEGMENT AND GEOGRAPHIC INFORMATION
The Company operates as one
In evaluating performance, the CODM primarily assesses operating loss and net loss, as reported on the consolidated statement of operations and regularly reviews certain significant expense categories, including content amortization, other cost of revenues, advertising and marketing, payroll and related expenses, and other general and administrative expenses. These expense categories are considered key factors in managing the business and guiding resource allocation decisions.
This approach ensures that the Company’s financial reporting reflects the way management monitors expenses and overall financial performance.
The following table presents financial information with respect to the Company’s single operating segment for the three months ended March 31, 2026, and 2025:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | |||||||||||||||||||||
| Revenues | $ | $ | |||||||||||||||||||||
Less: | |||||||||||||||||||||||
| Content amortization | |||||||||||||||||||||||
| Other cost of revenues | |||||||||||||||||||||||
| Advertising and marketing | |||||||||||||||||||||||
| Payroll and related | |||||||||||||||||||||||
| Other general and administrative | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Operating (loss) income | ( | ||||||||||||||||||||||
Other segment items1 | $ | $ | |||||||||||||||||||||
| (Loss) income before income taxes | $ | ( | $ | ||||||||||||||||||||
| Provision for income taxes | $ | $ | |||||||||||||||||||||
| Net (loss) income | $ | ( | $ | ||||||||||||||||||||
1 Other segment items include interest and other income, and equity method investment income for the three months ended March 31, 2026. Other segment items include changes in the fair value of warrant liabilities, interest and other income, and equity method investment loss for the three months ended March 31, 2025. See the consolidated financial statements for additional information regarding the Company’s operating segment. | |||||||||||||||||||||||
All long-lived tangible assets are located in the United States. For the three months ended March 31, 2026, and 2025, revenue by geographic location based on customer location was as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||
United States | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||||||
| International | % | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total revenue | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||||||
19
Revenue from no single foreign country comprised 10% or greater of total revenue for the three months ended March 31, 2026. Revenue from one foreign country, Switzerland, comprised 10 % or greater of total revenue for the same period in 2025.
NOTE 10 - RELATED-PARTY TRANSACTIONS
EQUITY INVESTMENTS
As of March 31, 2026, and December 31, 2025, the impacts of the arrangements with the Spiegel Venture on the Company’s Unaudited Condensed Consolidated Balance Sheets were as follows:
(in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Accounts receivable | $ | $ | |||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses and other liabilities | $ | $ | |||||||||
For the three months ended March 31, 2026, and 2025, the impacts of arrangements with the Spiegel Venture on the Company’s Unaudited Condensed Consolidated Statements of Operations were as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
(in thousands) | 2026 | 2025 | |||||||||||||||||||||
| Revenues | $ | $ | |||||||||||||||||||||
| Cost of revenues | $ | $ | |||||||||||||||||||||
The Company had no business transactions with Nebula during the periods presented; however, it continues to hold an equity interest in Nebula.
OPERATING LEASE
NOTE 11 - RETIREMENT PLAN
Nonqualified Deferred Compensation Plan
In July 2025, the Company established a nonqualified deferred compensation plan (the "NQDC Plan") for the benefit of a select group of management and highly compensated employees under Internal Revenue Service (IRS) rules, including the Company’s Chief Executive Officer and Chief Financial Officer. The NQDC Plan allows eligible participants to defer up to 80 % of their base salary and up to 100 % of their annual incentive compensation.
The NQDC Plan is unfunded for tax purposes and represents an unsecured general obligation of the Company to pay the participants in the future. Participant accounts are credited with earnings or losses based on the performance of notional investment indices selected by the participants from a menu of options established by the Company. The Company does not guarantee a minimum rate of return on participant accounts. To manage the obligation, the Company maintains a Rabbi Trust, which holds investments in Fidelity mutual funds that generally mirror the participants' notional investment selections. These assets are recorded at fair value within Other assets on the Unaudited Condensed Consolidated Balance Sheets
The Company records a liability for the participant deferrals, which is adjusted each reporting period to reflect the performance of the selected investment indices. Changes in the fair value of the NQDC Plan liability are recognized as compensation expense within "General and administrative" expenses in the Unaudited Condensed Consolidated Statements of Operations.
20
As of March 31, 2026, the aggregate liability under the NQDC Plan was $0.2 million, which is included in "Other liabilities" on the Unaudited Condensed Consolidated Balance Sheets. The following table summarizes the activity in the NQDC Plan for the three months ended March 31, 2026:
| (in thousands) | Three Months Ended March 31, 2026 | ||||
| Balance at beginning of period | $ | ||||
| Participant contributions | |||||
| Aggregate earnings (losses) | ( | ||||
| Distributions | |||||
| Balance at end of period | $ | ||||
NOTE 12 - LEASES
COMPANY AS LESSEE
The Company is a party to a non-cancellable operating lease agreement for office space, which expires in 2033. The Company’s operating lease for this office space includes fixed rent payments and variable lease payments, which are primarily related to common area maintenance and utility charges. The Company elected not to separate lease and non-lease components, and as such, all amounts paid under the lease are classified as either fixed or variable lease payments. The Company has determined that no renewal clauses are reasonably certain of being exercised and therefore has not included any renewal periods within the lease term for this lease.
As of March 31, 2026, the Company held operating lease ROU assets of $2.7 million. Current lease liabilities were $0.4 million, and are included within accrued expenses and other liabilities on the Unaudited Condensed Consolidated Balance Sheets. Non-current lease liabilities were $3.3 million. In measuring these operating lease liabilities, the Company used a weighted average discount rate of 4.4 % as of March 31, 2026. The weighted average remaining lease term as of March 31, 2026, was 6.92 years.
Components of Lease Cost
For the three months ended March 31, 2026, the Company’s total operating lease cost was comprised of the following:
| Three Months Ended March 31, | |||||||||||||||||||||||
(in thousands) | 2026 | 2025 | |||||||||||||||||||||
| Operating lease cost | $ | $ | |||||||||||||||||||||
| Variable lease cost | |||||||||||||||||||||||
| Total lease cost | $ | $ | |||||||||||||||||||||
21
Maturity of Lease Liabilities
As of March 31, 2026, maturities of the Company’s operating lease liabilities, which do not include short-term leases and variable lease payments, were as follows:
(In thousands) | |||||
| Nine remaining months of 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total lease payments | $ | ||||
| Less: imputed interest | ( | ||||
| Present value of total lease liabilities | $ | ||||
COMPANY AS LESSOR
NOTE 13 - COMMITMENTS AND CONTINGENCIES
CONTENT COMMITMENTS
As of March 31, 2026, the Company’s content obligations amounted to $0.5 million, including $0.3 million recorded within content liabilities in the accompanying unaudited consolidated balance sheets, and $0.2 million of obligations not yet recorded as they did not yet meet the asset recognition criteria for content assets. These obligations are expected to be paid through the remainder of 2026.
As of December 31, 2025, the Company’s content obligations amounted to $0.6 million, including $0.4 million recorded within current content liabilities in the accompanying unaudited consolidated balance sheets and $0.2 million of obligations not yet recorded as they did not yet meet the asset recognition criteria for content assets.
Content obligations include amounts related to licensed, commissioned and internally produced streaming content. An obligation for the production of content includes non-cancelable commitments under creative talent and employment agreements. An obligation for the licensed and commissioned content is incurred at the time the Company enters into an agreement to obtain future titles. Once a title becomes available, a content liability is generally recorded. Certain agreements include the obligation to license rights for unknown future titles, the ultimate quantity and/or fees for which are not yet determinable as of the reporting date.
ADVERTISING COMMITMENTS
The Company periodically enters into agreements to receive future advertising and marketing services as part of various licensee arrangements, and the Company reports commitments when the applicable agreements provide for specific committed amounts. As of March 31, 2026, the Company’s future advertising commitments totaled $0.6 million, all of which the Company expects to pay through the remainder of 2026.
NOTE 14 - INCOME TAXES
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NOTE 15 - SALE OF EMPLOYEE RETENTION CREDIT CLAIM
In response to the COVID-19 pandemic, the Company became eligible for the Employee Retention Credit ("ERC") under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") and subsequent legislation. The ERC is a refundable tax credit against certain employment taxes, designed to support businesses in retaining employees during periods of economic hardship. The Company determined its total eligible ERC to be $1.2 million.
In 2023, the Company filed claims for the Employee Retention Credit (“ERC”) related to the 2020 tax year and the first and second quarters of the 2021 tax year. In December 2024, the Company sold its rights to these anticipated proceeds to a third party (the “Buyer”). During the year ended December 31, 2025, the IRS processed the 2020 ERC claims, and the resulting refund of $0.4 million was remitted to the Buyer in accordance with the agreement.
During the three months ended March 31, 2026, the Company received a Letter 105C from the IRS notifying the Company of the disallowance of its claims related to the first and second quarters of 2021, which total approximately $1.0 million. The Company, in consultation with its tax advisors, continues to believe it is eligible for these credits and has initiated a formal appeal of the IRS's determination.
The agreement with the Buyer includes a provision allowing the Buyer to require the Company to repurchase the ERC claim if the IRS disallows or reduces the amount. Management continues to believe the likelihood of such a repurchase obligation is remote based on the technical merits of the pending appeal; consequently, no liability has been recognized for this contingent obligation as of March 31, 2026. No income or expenses related to the 2021 ERC claims were recognized during the three months ended March 31, 2026.
NOTE 16 - SUBSEQUENT EVENTS
DIVIDEND DECLARATION
On May 13, 2026, the Board raised the quarterly cash dividend to $0.085 per share of common stock, up from the $0.08 per share paid in previous quarters. The cash dividend will be paid on June 19, 2026, to all holders of record of common stock at the close of business on June 5, 2026. This cash dividend of approximately $5.0 million is expected to be paid from available cash on hand.
PENDING ACQUISITION OF REMAINING OWNERSHIP IN SPIEGEL VENTURE
In April 2026, Spiegel TV GmbH and Autentic GmbH exercised their respective put options requiring the Company to purchase the remaining 68 % ownership interest in the Spiegel Venture for an aggregate purchase price of $1.9 million. The Company currently holds a 32 % equity interest in Spiegel Venture. The Company expects to finalize the acquisition and settle the payment in mid-2026. Upon the expected closing, the Company will own 100 % of the Spiegel Venture, at which point Spiegel Venture’s results of operations will be consolidated within the Company’s financial statements.
The Company intends to fund the acquisition through cash on hand.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our results of operations and financial condition. The following discussion should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q (“Quarterly Report”). Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we,” “us,” “our,” and “the Company” are intended to mean the business and operations of CuriosityStream Inc.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding the Company’s plans, expectations, thoughts, beliefs, estimates, goals and outlook for the future that are intended to be covered by the protections provided under the Private Securities Litigation Reform Act of 1995.
All statements other than statements of historical fact included in this Quarterly Report including, without limitation, statements under this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, such as subscription plan price increases, the development of integrated digital brand partnerships with advertisers and our dividend plans, are forward-looking statements. When used in this Quarterly Report, words such as “anticipate,” “attribute,” “believe,” “continue,” “hope,” “estimate,” “expect,” “intend,” “may,” “might,” “potential,” “seek,” “should,” “will” and “would,” and similar expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on the Company’s behalf are qualified in their entirety by this paragraph. These forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those included in forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 12, 2026 (the “Annual Report”) and any other subsequent periodic reports and future periodic reports. We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this Quarterly Report, unless required by law.
OVERVIEW
Founded by John Hendricks, former Chairman of Discovery Communications and founder of the Discovery Channel, CuriosityStream is a media and entertainment company that offers premium video and audio programming across the principal categories of factual entertainment, including science, history, society, nature, lifestyle and technology. Our mission is to provide premium factual entertainment that informs, enchants and inspires.
We seek to meet the demand for high-quality factual entertainment via subscription video on-demand (“SVOD”)
platforms, content licensing, bundled content licenses for SVOD and linear offerings, talks and courses and partner bulk sales.
The main sources of our revenue are:
1.Subscription Revenue, which includes fees earned from our direct subscriber business and wholesale distribution agreements;
2.Licensing Revenue, which reflects fees from content licensing including trade and barter transactions, and AI data licensing; and
3.Other Revenue, which primarily consists of advertising, sponsorships, and integrated brand partnerships.
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We operate our business as a single operating segment that provides premium content through multiple channels, including the use of various applications, partnerships and affiliate relationships.
CuriosityStream’s award-winning content library features 14,000 programs that explore topics ranging from space engineering to ancient history to the rise of Wall Street, and includes shows and series from leading nonfiction producers. Each week we launch new video titles, which are available on demand in high- or ultra-high definition. Through new and long-standing international partnerships, substantial portions of our video library have been localized from English into eleven different languages. The Company also aggregates rights to millions of video and audio programs, course materials and other assets to utilize on our own services as well as license to other media and technology companies.
RESULTS OF OPERATIONS
The financial data in the following table sets forth selected financial information derived from our Unaudited Condensed Consolidated Financial Statements for the three months ended March 31, 2026, and 2025, and includes our results of operations as a percentage of revenue or as a percentage of costs, as applicable, for the periods indicated:
| Three Months Ended March 31, | Change | ||||||||||||||||||||||||||||||||||||||||||||||
(unaudited and in thousands) | 2026 | 2025 | Total | % | |||||||||||||||||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
| Subscription | $ | 8,826 | $ | 9,281 | $ | (455) | (5 | %) | |||||||||||||||||||||||||||||||||||||||
| Licensing | 6,017 | 5,411 | 606 | 11 | % | ||||||||||||||||||||||||||||||||||||||||||
| Other | 318 | 398 | (80) | (20 | %) | ||||||||||||||||||||||||||||||||||||||||||
Total revenue | 15,161 | 15,090 | 71 | — | % | ||||||||||||||||||||||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of revenues | 6,657 | 7,080 | (423) | (6 | %) | ||||||||||||||||||||||||||||||||||||||||||
| Advertising and marketing | 3,515 | 2,934 | 581 | 20 | % | ||||||||||||||||||||||||||||||||||||||||||
| General and administrative | 6,533 | 4,997 | 1,536 | 31 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 16,705 | 15,011 | 1,694 | 11 | % | ||||||||||||||||||||||||||||||||||||||||||
| Operating (loss) income | (1,544) | 79 | (1,623) | n/m | |||||||||||||||||||||||||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of warrant liability | — | (7) | 7 | n/m | |||||||||||||||||||||||||||||||||||||||||||
Interest and other income | 210 | 426 | (216) | (51 | %) | ||||||||||||||||||||||||||||||||||||||||||
Equity method investment income (loss) | 30 | (151) | 181 | (120 | %) | ||||||||||||||||||||||||||||||||||||||||||
| (Loss) income before income taxes | $ | (1,304) | $ | 347 | (1,651) | n/m | |||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | 24 | 28 | (4) | n/m | |||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | $ | (1,328) | $ | 319 | (1,647) | n/m | |||||||||||||||||||||||||||||||||||||||||
* n/m = percentage not meaningful | |||||||||||||||||||||||||||||||||||||||||||||||
For the three months ended March 31, 2026, the Company reported an operating loss of $1.5 million, compared to an operating income of $0.1 million for the three months ended March 31, 2025. This $1.6 million decrease in operating results was primarily driven by a $1.7 million, or 11%, increase in total operating expenses, largely due to higher stock-based compensation charges.
The Company recognized a net loss of $1.3 million for the three months ended March 31, 2026, compared to net income of $0.3 million in the prior year period, resulting in a year-over-year decrease of $1.6 million. The decrease in our net result of $1.6 million, was primarily due to higher general and administrative expenses of $1.5 million.
Our future operating results and cash flows are dependent upon a number of opportunities, challenges, and other factors, including our ability to efficiently grow our subscriber base, increase our prices and expand our service offerings to maximize subscriber lifetime value.
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Revenue
Since the Company was founded in 2015, we have generated the majority of our revenues from consumers directly accessing our content in the form of monthly or annual subscription plans.
For the three months ended March 31, 2026, total revenue increased slightly by $0.1 million compared to the same period in 2025, as a $0.6 million increase in Licensing revenue was offset by a $0.5 million decline in Subscription revenue.
Subscription
The Company’s streaming content is provided to subscribers directly, via the Company’s website, applications, and channel stores offerings, as well as through wholesale distribution agreements.
Individual customers can purchase subscriptions directly via the Company’s SVOD platform accessible by internet connected devices and applications for such devices as well as through distributor channel stores offering subscriptions to Company products on an a la carte basis. Individual subscriptions may be monthly or annual and pricing may vary based on the customer’s location worldwide. Customers may also subscribe to Company services indirectly via distribution partners who deliver CuriosityStream content via the distributor’s platform or system. Such wholesale distribution agreements typically convey a broad scope of rights, such as access to a 24/7 linear channel and an on-demand content library, with pricing and packaging flexibility, in exchange for an annual fixed fee or per-subscriber fee as part of a multi-year deal. The streaming library is composed of thousands of accessible on-demand and ad-free productions and includes shows and series from leading nonfiction producers.
The Company continually evaluates pricing structures to align with market conditions, including price adjustments for legacy subscribers initiated in March 2023 as well as March 2026. Alongside standard subscriptions, the Company offers the “Smart Bundle” service, which includes access to Tastemade, Kidstream, SOMM TV, and Curiosity University.
For the three months ended March 31, 2026, direct business revenue decreased due to a lower overall subscriber count. However, this portion of our business benefited from a strategic price increase implemented in March 2026, which applied to our subscription offerings across our direct business platforms. Additionally, new partnerships and revised affiliate agreements drove a net increase in wholesale distribution revenue for the quarter.
Licensing
Through our Licensing business, we license collections of existing titles from our content library to various media companies. These transactions include traditional cash licenses as well as non-cash barter arrangements (whereby we license out our content in exchange for new programming to expand our library while preserving liquidity). Additionally, we license and sublicense high volumes of content and data assets to organizations developing large language models (LLMs) and other artificial intelligence (AI) products.
The growth in licensing was primarily driven by expanded barter activity. Under these non-cash arrangements, the Company acquires additional content to expand its content library, which consequently required the concurrent recognition of licensing revenue at the estimated fair value of the content received. The volume of these transactions varies based on the timing of content exchanges between the Company and its partners.
Other
We provide advertising and sponsorship services by developing integrated digital brand partnerships designed to offer CuriosityStream content in a variety of forms. These include short- and long-form program integration, branded social media promotional videos, and broadcast advertising spots within our video and audio programs. Our services are made available via our linear programming channels, in front of the paywall, and through an increasing focus on digital display ads. Additionally, we deliver content through advertising-based video-on-demand (AVOD) and free advertising-supported streaming television (FAST) platforms. This includes our dedicated YouTube channels (Curiosity and Curiosity University), where we generate advertising revenue from our digital content without transactional video-on-demand (TVOD) components. We continue to expand these offerings across YouTube and other similar ad-supported distribution channels to maximize our brand reach and digital ad inventory.
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In the future, we intend to continue developing integrated digital brand partnerships with advertisers. These sponsorship campaigns offer companies the chance to be associated with CuriosityStream content in the forms described above. We believe the impressions accumulated in these multi-faceted campaigns would result in verifiable metrics for the clients.
Operating Expenses
Our primary operating costs relate to the cost of producing and acquiring our content, the costs of advertising and marketing our service, personnel costs, and distribution fees.
For the three months ended March 31, 2026, and 2025, our operating expenses were $16.7 million and $15.0 million, respectively, an increase of $1.7 million, or 11%.
Cost of Revenues
Cost of revenues encompasses distribution fees, content amortization, hosting and streaming delivery costs, payment processing costs, commission costs, and subtitling and broadcast costs. Producing and co-producing content and commissioned content is generally more costly than content acquired through licenses.
Distribution fees include revenue share arrangements with our content, Smart Bundle and digital distributor partners, payment processing fees and fees owed to the Spiegel Venture related to its streaming service. We pay a fixed percentage fee to our AI training content partners. We also pay fixed percentage fees to certain distribution partners for allowing their subscriber base to access our subscription platform.
The following table details cost of revenues for the three months ended March 31, 2026, and 2025:
| Three Months Ended March 31, | Change | ||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | Total | % | |||||||||||||||||||||||||||||||||||||||||||
Content amortization | $ | 3,678 | $ | 3,513 | $ | 165 | 5 | % | |||||||||||||||||||||||||||||||||||||||
Distribution1 | 1,566 | 2,836 | (1,270) | (45 | %) | ||||||||||||||||||||||||||||||||||||||||||
Other2 | 1,413 | 731 | 682 | 93 | % | ||||||||||||||||||||||||||||||||||||||||||
Total cost of revenues | $ | 6,657 | $ | 7,080 | $ | (423) | (6 | %) | |||||||||||||||||||||||||||||||||||||||
1 Includes revenue share, payment processing fees, music licensing fees, and application service commissions. | |||||||||||||||||||||||||||||||||||||||||||||||
2 Includes storage costs, web service costs, production and broadcast, agent commissions, and other expenses. | |||||||||||||||||||||||||||||||||||||||||||||||
Cost of revenues decreased to $6.7 million for the three months ended March 31, 2026, a 6% decrease from $7.1 million for the same period in 2025. These decreases were primarily driven by a $1.3 million, or 45% decreases in distribution costs, resulting from reductions in music licensing fees and AI revenue share costs compared to the same period in 2025. These decreases were partly offset by $0.7 million, or 93% increase in Other for the three months ended March 31, 2026, primarily due to higher storage costs and web service costs directly related to the delivery and management of data assets under our increased AI licensing agreements.
Advertising and Marketing
Our advertising and marketing expenditures are a primary operating cost for our business, focused specifically on the acquisition and retention of Direct subscribers. While these costs may fluctuate based on our specific outreach objectives, we prioritize the allocation of marketing dollars toward efficient customer acquisition methods for our streaming service. For the three months ended March 31, 2026, advertising and marketing expenses increased by $0.6 million, compared to the same period in 2025. The increase primarily reflects expanded digital advertising efforts targeted at high-growth strategic initiatives. We continue to optimize our marketing mix to balance efficient spending with the maintenance of a robust market presence.
General and Administrative
Our general and administrative costs are associated with certain administrative functions, including corporate governance, executive management, information technology, finance and human resources. These costs consist largely of compensation expense, subscriptions that support our business, professional services, and rent. While personnel levels may fluctuate based on our needs, we tend to focus on hiring and retaining revenue-generating personnel, such as sales staff and roles that support the improvement, maintenance and marketing of our different revenue streams.
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The following table details general and administrative costs for the three months ended March 31, 2026, and 2025:
| Three Months Ended March 31, | Change | ||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | Total | % | |||||||||||||||||||||||||||||||||||||||||||
| Payroll and related | $ | 2,889 | $ | 2,632 | 257 | 10 | % | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | 2,241 | 863 | 1,378 | 160 | % | ||||||||||||||||||||||||||||||||||||||||||
| Professional services | 478 | $ | 589 | (111) | (19 | %) | |||||||||||||||||||||||||||||||||||||||||
Technology and subscriptions | 349 | 317 | 32 | 10 | % | ||||||||||||||||||||||||||||||||||||||||||
Other1 | 576 | 596 | (20) | (3 | %) | ||||||||||||||||||||||||||||||||||||||||||
Total general and administrative | 6,533 | 4,997 | 1,536 | 31 | % | ||||||||||||||||||||||||||||||||||||||||||
1 Includes facilities costs, depreciation and amortization, insurance, travel and other expenses. | |||||||||||||||||||||||||||||||||||||||||||||||
For the three months ended March 31, 2026, general and administrative expenses increased to $6.5 million from $5.0 million for the same period in 2025. The increase of $1.5 million, or 31% was primarily driven by $1.4 million higher stock-based compensation expense from the RSUs granted in July 2025 and during the period, and $0.3 million higher payroll and related primarily due to increased accruals for full-year incentive compensation. These increases were partially offset by a $0.1 million decrease in Professional services, mainly due to lower legal expense.
Other Income (Expense)
Change in Fair Value of Warrant Liability
The fair value of the Company's warrant liability was estimated using the Black-Scholes valuation model, which took into account a number of economic assumptions, including the market price of the Company's common stock and its expected volatility. Changes in these inputs from period to period significantly affected the reported changes in fair value during the periods the warrants were outstanding. As of March 31, 2026, there were no warrants outstanding, and the Company no longer carried a warrant liability on its consolidated balance sheet.
Interest and Other Income
Interest and other income for the three months ended March 31, 2026, was $0.2 million compared to $0.4 million for the same periods in 2025. The decrease in 2026 was primarily due to less interest income earned resulting from an overall decrease in investment balance starting in 2025 and continued through the first quarter of 2026.
Equity Method Investment Income
For the three months ended March 31, 2026, the Company recorded an immaterial income compared to a loss of $0.2 million for the same period in 2025. The Company no longer recognizes its share of losses from the Spiegel Venture, as the investment balance was fully reduced in 2024 due to cumulative losses. The Company continues to record its share of income and losses from Nebula.
Income Taxes
For the three months ended March 31, 2026 and 2025 income tax expense was immaterial. Our provision for income taxes differs from the federal statutory rate primarily due to the Company being in a full valuation allowance position and not recognizing a tax benefit attributable to generated losses for either federal or state income tax purposes.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
As of March 31, 2026, the Company’s cash, cash equivalents and restricted cash totaled $17.0 million, with an additional $6.5 million held in investments in debt securities that can be readily converted to cash to support ongoing cash flow needs.
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For the three months ended March 31, 2026, the Company generated $1.2 million of net cash from operating activities. Additionally, the Company generated $2.5 million in net cash from investing activities, mainly related to maturities of investments in debt securities. Net cash used in financing activities was $5.2 million, mainly due to dividends paid and repurchase of treasury stock.
As of March 31, 2026, we principally use cash to promote our services through advertising and marketing and to provide working capital for our operations. While we have experienced net losses since inception, we have generated positive cash flow from operating activities in 2024 and 2025 and expect this trend to continue. We believe that our current cash levels and investments, supplemented by anticipated operating cash flows and the availability under our new Credit Facility will be adequate to support our ongoing operations, capital expenditures, dividend payments, and working capital for at least the next twelve months from the date of this filing.
We have used, and expect to continue to use, cash on hand to fund our quarterly dividend, subject to Board approval and market conditions. As of March 31, 2026, we continue to utilize trade and barter transactions, a strategy initiated in 2023, to exchange content assets through licensing agreements. These transactions allow us to acquire high-quality, monetizable content while preserving our cash liquidity.
The following table provides details of dividends declared and paid as of March 31, 2026.
| Declaration Date | Record Date | Payment Date | Per Share | Aggregate Amount | ||||||||||||||||||||||
| January 29, 2026 | March 6, 2026 | March 20, 2026 | $0.08 | $4.9 million | ||||||||||||||||||||||
Our Board of Directors has declared the next cash dividend of $0.085 per share to be paid on June 19, 2026, for an expected aggregate amount of $5.0 million. Subject to future declaration by our Board of Directors, we intend to continue to pay regular quarterly cash dividends.
On June 10, 2024, our Board of Directors authorized and approved a share repurchase program for up to $4.0 million of the then-outstanding shares of our common stock. Under the stock repurchase program, we may repurchase shares through open market purchases, privately negotiated transactions, block purchases, or otherwise in accordance with applicable federal securities laws. On March 10, 2026, the Board authorized an additional $2.0 million for the purchase of the Company’s common stock under this existing program, increasing the total authorized amount to $6.0 million. Since the program’s inception through March 31, 2026, we had repurchased $0.6 million of common stock under this program. As of March 31, 2026, $5.4 million remains available for future repurchases under the Board-authorized program.
Subsequent to March 31, 2026, in April 2026, the minority partners of the Spiegel Venture exercised their respective put options. As a result, the Company is committed to acquiring the remaining 68% ownership interest for an aggregate purchase price of approximately $1.9 million, based on the formula set forth in the relevant Share Purchase Agreement. The Company expects to finalize this transaction in mid-2026 and intends to fund the acquisition using existing cash on hand. Upon closing, the Company will own 100% of the Spiegel Venture and will begin consolidating its financial results.
We cannot predict when or if we will repurchase any additional shares of common stock as this stock repurchase program will depend on a number of factors, including constraints imposed by applicable federal securities laws, price, general business and market conditions, and alternative investment opportunities. This program does not obligate us to acquire any particular amount of common stock. The program has no expiration date and may be modified, suspended or discontinued at any time at our discretion.
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Cash Flow Analysis
The following table presents our cash flows from operating, investing and financing activities for the three months ended March 31, 2026, and 2025:
| Three Months Ended March 31, | |||||||||||
(unaudited and in thousands) | 2026 | 2025 | |||||||||
Net cash provided by operating activities | $ | 1,210 | $ | 1,922 | |||||||
| Net cash provided by investing activities | 2,546 | 2,070 | |||||||||
| Net cash used in financing activities | (5,174) | (2,635) | |||||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | $ | (1,418) | $ | 1,357 | |||||||
Operating Activities
Cash flows from operating activities primarily consist of net (loss) income, changes to our content assets (including additions and amortization), and other working capital items.
| Three Months Ended March 31, | |||||||||||
| (in thousands) | 2026 | 2025 | |||||||||
| Net (loss) income | $ | (1,328) | $ | 319 | |||||||
| Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities | |||||||||||
| Change in fair value of warrant liability | — | 8 | |||||||||
| Additions to content assets | (4,026) | (1,828) | |||||||||
| Change in content liabilities | (56) | (276) | |||||||||
| Amortization of content assets | 3,678 | 3,513 | |||||||||
| Stock-based compensation | 2,241 | 863 | |||||||||
Equity method investment loss | (30) | 151 | |||||||||
Other depreciation, amortization and non-cash items | 170 | (34) | |||||||||
| Changes in operating assets and liabilities | 561 | (794) | |||||||||
Net cash provided by operating activities | $ | 1,210 | $ | 1,922 | |||||||
For the three months ended March 31, 2026, our net cash from operating activities was $1.2 million compared to $1.9 million for the same period in 2025.
For the three months ended March 31, 2026, net loss was $1.3 million. Operating cash flows reflected non-cash adjustments, including $3.7 million of amortization of content assets, $2.2 million of stock-based compensation and $0.2 million of other depreciation, amortization and non-cash items. Cash used during the quarter primarily consisted of a $4.0 million of additions to content assets acquired primarily through barter activities, and $0.6 million inflow from changes in operating assets and liabilities.
Investing Activities
Cash flow from investing activities consists of purchases, sales and maturities of investments, business acquisitions and equity investments and purchases of property and equipment.
For the three months ended March 31, 2026 and 2025, we recorded a net cash inflow in investing activities of $2.5 million and $2.1 million, respectively, mainly due to maturities of investments in debt securities.
Financing Activities
For the three months ended March 31, 2026 and 2025, net cash used in financing activities was $5.2 million and $2.6 million, respectively, reflecting an increase of $2.5 million primarily due to dividends paid.
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Capital Expenditures
Going forward, we expect to continue making expenditures for purchases of property and equipment. The amount, timing and allocation of capital expenditures are largely discretionary and within management’s control. Depending on market conditions, we may choose to defer a portion of our budgeted expenditures until later periods to achieve the desired balance between sources and uses of liquidity and prioritize capital projects that we believe have the highest expected returns and potential to generate cash flow. Subject to financing alternatives, we may also increase our capital expenditures significantly to take advantage of opportunities we consider to be attractive.
OFF BALANCE SHEET ARRANGEMENTS
As of March 31, 2026, we had no off-balance sheet arrangements.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our discussion and analysis of our financial condition and results of operation is based upon our financial statements, which have been prepared in accordance with U.S. GAAP. Certain amounts included in or affecting the financial statements presented in this Quarterly Report and related disclosures must be estimated, requiring management to make assumptions with respect to values or conditions which cannot be known with certainty at the time the financial statements are prepared. Management believes that the accounting policies set forth below comprise the most important “critical accounting policies” for the Company. A critical accounting policy is one which is both important to the portrayal of a company’s financial condition and results of operations and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Management evaluates such policies on an ongoing basis, based upon historical results and experience, consultation with experts and other methods that management considers reasonable in the particular circumstances under which the judgments and estimates are made, as well as management’s forecasts as to the manner in which such circumstances may change in the future.
For more detailed information on our critical accounting policies, including those related to content assets, revenue recognition and trade and barter transactions, refer to the "Summary of Significant Accounting Policies" section in the Annual Report filed with the Securities and Exchange Commission on March 12, 2026. This comprehensive discussion helps to ensure that stakeholders have a complete understanding of the accounting methodologies and principles that influence the financial statements presented herein. During the quarter ended March 31, 2026, there were no significant changes made to the Company’s critical accounting policies from those disclosed in our Annual Report.
RECENT ACCOUNTING PRONOUNCEMENTS
The information set forth in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies in the Unaudited Notes to Interim Unaudited Condensed Consolidated Financial Statements is incorporated herein by reference.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES REGARDING MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in our reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are recorded, processed, summarized and reported within the specified time periods in the rules and forms of the SEC, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.
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Our management, with the participation of the CEO and the CFO, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) promulgated under the Exchange Act) as of March 31, 2026. Based on these evaluations, our CEO and CFO concluded that our disclosure controls and procedures were effective as of March 31, 2026.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is required to evaluate, with the participation of our CEO and our CFO, any changes in internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during each fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. There were no changes in our internal control over financial reporting during the quarter ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, we believe would individually or in the aggregate have a material adverse effect on our business, results of operations, financial condition or cash flows.
ITEM 1A. RISK FACTORS
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report on Form 10-K filed with the SEC on March 12, 2026. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.
There have been no material changes from the risk factors previously disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 12, 2026.
ITEM 5. OTHER INFORMATION
None of the Company’s directors or officers otherwise adopted terminated
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ITEM 6. EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
| Incorporated By Reference | ||||||||||||||||||||||||||||||||||||||
| Exhibit No. | Description | Form | File No. | Exhibit | Filing Date | Filed/Furnished Herewith | ||||||||||||||||||||||||||||||||
10.1* | 8-K | 001-39139 | 10.1 | July 16, 2025 | ||||||||||||||||||||||||||||||||||
10.9+ | 10.9 | X | ||||||||||||||||||||||||||||||||||||
| 10.10 | 10.10 | X | ||||||||||||||||||||||||||||||||||||
10.11+ | 10.11 | X | ||||||||||||||||||||||||||||||||||||
10.12+ | 10.12 | X | ||||||||||||||||||||||||||||||||||||
| 31.1 | X | |||||||||||||||||||||||||||||||||||||
| 31.2 | X | |||||||||||||||||||||||||||||||||||||
32.1** | X | |||||||||||||||||||||||||||||||||||||
101. INS*** | Inline XBRL Instance Document | X | ||||||||||||||||||||||||||||||||||||
| 101. SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||||||||||||||||||||||||||||
| 101. CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
| 101. LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
| 101. PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
| 101. DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (as formatted as Inline XBRL and contained in Exhibit 101) | X | ||||||||||||||||||||||||||||||||||||
| * | Management contract or compensatory plan or arrangement | ||||
| + | Certain schedules and attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to provide, on a supplemental basis, a copy of any omitted schedules and attachments to the SEC or its staff upon its request. | ||||
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| ** | This document is being furnished with this Form 10-Q. This certification is deemed not filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act, or the Exchange Act. | ||||
| *** | The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
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PART III. SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.
| CURIOSITYSTREAM INC. | ||||||||
Date: May 14, 2026 | By: | /s/ Clint Stinchcomb | ||||||
| Name: | Clint Stinchcomb | |||||||
Title: | President and Chief Executive Officer (Principal Executive Officer) | |||||||
Date: May 14, 2026 | By: | /s/ P. Brady Hayden | ||||||
| Name: | P. Brady Hayden | |||||||
Title: | Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | |||||||
Exhibit 10.9
Execution Version
$10,000,000 CREDIT AGREEMENT
dated as of March 12, 2026
between
CURIOSITY INC.
as Borrower,
as Borrower,
THE GUARANTORS PARTY HERETO FROM TIME TO TIME,
and
CITIBANK, N.A.,
as Lender
as Lender
TABLE OF CONTENTS
Page
i
ii
iii
iv
v
EXHIBIT A – FORM OF REVOLVING NOTE
EXHIBIT B – FORM OF NOTICE OF BORROWING
EXHIBIT C – FORM OF COMPLIANCE CERTIFICATE
SCHEDULE 6.12 – PERMITTED INDEBTEDNESS
SCHEDULE 6.13 – PERMITTED LIENS
SCHEDULE 6.16 – PERMITTED INVESTMENTS
vi
CREDIT AGREEMENT
This CREDIT AGREEMENT dated as of March 12, 2026 (this “Credit Agreement”) between CURIOSITY INC., a Delaware corporation (“Borrower”), the GUARANTORS party hereto from time to time, and CITIBANK, N.A., as lender (in such capacity, “Lender”).
SECTION 1
DEFINITIONS
DEFINITIONS
Section 1.1Definitions. As used in this Credit Agreement, unless otherwise defined herein, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“Adjusted Term SOFR” means, for purposes of any calculation, the rate per annum equal to (a) Term SOFR for such calculation plus (b) 0.0%; provided that if Adjusted Term SOFR as so determined shall ever be less than the Floor, then Adjusted Term SOFR shall be deemed to be the Floor.
“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affiliate” shall mean, as to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with such Person.
“Applicable Margin” shall mean 3.00% per annum.
“Application” means a written request for an L/C Credit Extension which complies with the terms hereof, in form and substance satisfactory to the Lender.
“Available Revolving Commitment” means, at any time, an amount equal to the Revolving Loan Commitment in effect at such time, minus (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time, minus, (b) the aggregate amount of all L/C Disbursements that have not yet been reimbursed or converted into Revolving Loans at such time, minus, (c) the aggregate principal balance of any Revolving Loans outstanding at such time.
“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if the then-current Benchmark is a term rate, any tenor for such Benchmark that is or may be used for determining the length of an Interest Period or (y) otherwise, any payment period for interest calculated with reference to such Benchmark, as applicable, pursuant to this Credit Agreement as of such date.
“Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
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“Bail-In Legislation” shall mean, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Benchmark” means, initially, the Term SOFR Reference Rate; provided that if a replacement of the Benchmark has occurred pursuant to Section 2.16(a), then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate. Any reference to “Benchmark” shall include, as applicable, the published component used in the calculation thereof.
“Benchmark Replacement” means, with respect to any Benchmark Transition Event, the sum of: (a) the alternate benchmark rate that has been selected by the Lender and the Borrower giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the then-current Benchmark for Dollar-denominated bilateral credit facilities at such time and (b) the related Benchmark Replacement Adjustment; provided that, if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Credit Agreement and the other Loan Documents.
“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Lender and the Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable unadjusted Benchmark Replacement for Dollar-denominated bilateral credit facilities at such time.
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of breakage provisions, the formula for calculating any successor rates identified pursuant to the definition of “Benchmark Replacement” (including whether such formula shall
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be cumulative or non-cumulative), the formula, methodology or convention for applying the successor Floor to the successor Benchmark Replacement and other technical, administrative or operational matters) that the Lender decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Lender in a manner substantially consistent with market practice (or, if the Lender decides that adoption of any portion of such market practice is not administratively feasible or if the Lender determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Lender decides is reasonably necessary in connection with the administration of this Credit Agreement and the other Loan Documents).
“Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark:
(a) in the case of clause (a) or (b) of the definition of “Benchmark Transition Event,” the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or
(b) in the case of clause (c) of the definition of “Benchmark Transition Event,” the first date on which all Available Tenors of such Benchmark (or the published component used in the calculation thereof) have been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative; provided that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.
For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:
(a) a public statement or publication of information by or on behalf of the administrator of the then-current Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
(b) a public statement or publication of information by the regulatory supervisor for the administrator of then-current Benchmark (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for
3
such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are not, or as of a specified future date will not be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Start Date” means, in the case of a Benchmark Transition Event, the earlier of (a) the applicable Benchmark Replacement Date and (b) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication).
“Benchmark Unavailability Period” means the period (if any) (a) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.16 and (b) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.16.
“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Borrower” is defined in the preamble hereof.
“Business Day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks are required or authorized to be closed in New York, New York; provided that, when used in connection with a SOFR Loan, the term “Business Day” shall also exclude any day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
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“Cash Collateralize” means to pledge and deposit with or deliver to the Lender, as collateral for L/C Exposure and/or Obligations in respect of Cash Management Services then outstanding, cash or deposit account balances or, if the Lender shall agree in its sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Lender. “Cash Collateral” shall have a meaning analogous to the foregoing and shall include the proceeds of such cash collateral and other credit support.
“Cash Equivalents” means, at any time, (a) any evidence of indebtedness, maturing not more than one (1) year after such time, issued or guaranteed by the United States Government or any political subdivision, agency or public instrumentality thereof, (b) commercial paper, or corporate demand notes, maturing within 270 days from the date of acquisition thereof in each case rated at least A-2 by Standard & Poor’s Ratings Group or P-2 by Moody’s Investors Service, Inc., (c) any certificate of deposit (or time deposit represented by a certificate of deposit) or banker’s acceptance maturing not more than one (1) year after such time, or any overnight Federal Funds transaction that is issued or sold by the Lender (or by (x) a commercial banking institution that is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $500,000,000 or (y) a commercial bank of a foreign country recognized by the United States having combined capital and surplus and undivided profits of not less than $500,000,000 (or the Dollar equivalent thereof)), (d) other investments considered to be cash equivalents or investments that are readily convertible to cash consistent with the Parent Company’s investment policy as described in the sections titled “Cash, Cash Equivalents and Restricted Cash” and “Liquidity” in the Parent Company’s Form 10-K for the fiscal year ended December 31, 2024, (e) any repurchase agreement entered into with the Lender (or commercial banking institution of the nature referred to in clause (c) above) which (i) is secured by a fully perfected security interest in any obligation of the type described in any of clauses (a) through (d) above and (ii) has a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of the Lender (or other commercial banking institution) thereunder, (f) money market accounts or mutual funds which are at least 95% invested in assets satisfying the foregoing requirements and (g) other short term liquid investments consistent with the Borrower’s current investment policy or otherwise reasonably approved in writing by the Lender. In addition, with respect to Foreign Subsidiaries, Cash Equivalents shall include bank deposits maintained in the ordinary course of business of the Foreign Subsidiaries with any bank approved by the Lender (such approval not to be unreasonably withheld).
“Cash Management Agreement” is defined in the definition of “Cash Management Services.”
“Cash Management Services” means cash management and other services provided to one or more of the Loan Parties by the Lender and its Affiliates which may include treasury, depository, return items, overdraft, controlled disbursement, merchant store value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system), merchant services, direct deposit of payroll, business credit card (including so-called “purchase cards”, “procurement cards” or “p-cards”),
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credit card processing services, debit cards, stored value cards, and check cashing services identified in the Lender's and its Affiliates' various cash management services or other similar agreements (each, a “Cash Management Agreement”).
“Change in Law” shall mean the occurrence after the Effective Date of (i) the adoption or effectiveness of any law, rule, regulation, judicial ruling, judgment or treaty, (ii) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application by any Governmental Authority of any law, rule, regulation or treaty or (iii) the making or issuance by any Governmental Authority of any request, rule, guideline or directive, whether or not having the force of law; provided that, notwithstanding anything herein to the contrary (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives concerning capital adequacy promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities shall, in each case, be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.
“Change of Control” means an event or series of events by which: (a) the Parent Company ceases to own and control 100% of the equity interests and voting rights of the Borrower; or (b) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Parent Company or the Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Collateral” means, collectively, the “Collateral” as defined in the Security Agreement, Cash Collateral, and any other collateral in which, pursuant to any other Collateral Documents that exist from time to time, the Lender obtains a security interest.
“Collateral Documents” means, collectively, the Security Agreement, and each other agreement or instrument pursuant to or in connection with which a Loan Party or any other Person grants a security interest in any Collateral to the Lender (including, without limitation, any deposit account control agreement creating or perfecting rights in Cash Collateral pursuant to the provisions of Section 3.9).
“Conforming Changes” means, with respect to the use or administration of Term SOFR, any technical, administrative or operational changes that the Lender decides may be appropriate to reflect the adoption and implementation of Term SOFR and to permit the administration thereof by the Lender in a manner substantially consistent with market practice (or, if the Lender
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decides that adoption of any portion of such market practice is not administratively feasible or if the Lender determines that no market practice for the administration of Term SOFR exists, in such other manner of administration as the Lender decides is reasonably necessary in connection with the administration of this Credit Agreement and the other Loan Documents).
“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consolidated EBITDA” means, for any period, Consolidated Net Income for such period plus, without duplication and to the extent deducted in determining Consolidated Net Income for such period, the sum of (a) Consolidated Interest Expense, (b) provision for taxes based on income, (c) depreciation expense, (d) amortization expense, (e) unusual or non-recurring charges, expenses or losses and (f) stock-based compensation and other non-cash charges, expenses or losses (excluding any such non-cash charge to the extent it represents an accrual or reserve for potential cash charge in any future period or amortization of a prepaid cash charge that was paid in a prior period), minus, to the extent included in determining Consolidated Net Income for such period, the sum of (i) any non-cash income or gains increasing Consolidated Net Income for such period (excluding any such non-cash gain to the extent it represents the reversal of an accrual or reserve for potential cash charge in any prior period), (ii) any gains realized from the disposition of property outside of the ordinary course of business, all as determined on a consolidated basis, and (iii) any interest income. For the purpose of calculating Consolidated EBITDA for any period, if during such period the Parent Company or any of its subsidiaries shall have consummated an acquisition, Consolidated EBITDA for such period shall be calculated after giving pro forma effect thereto as if such acquisition occurred on the first day of such period.
“Consolidated Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBITDA for the period of the four fiscal quarters most recently ended to (b) Consolidated Interest Expense for such period.
“Consolidated Interest Expense” means, for any period, total interest expense (including imputed interest on capitalized leases), excluding any non-cash interest expenses, of the Parent Company and its subsidiaries on a consolidated basis for such period with respect to all outstanding indebtedness for borrowed money of the Parent Company and its subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under swap contracts in respect of interest rates to the extent that such net costs are allocable to such period).
“Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Total Debt as of such date to (b) Consolidated EBITDA for the period of the four fiscal quarters most recently ended.
“Consolidated Net Income” means, for any period, the consolidated net income (or loss) of the Parent Company and its subsidiaries on a consolidated basis; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a
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subsidiary of the Parent Company or is merged into or consolidated with the Parent Company or any of its subsidiaries, (b) the income (or deficit) of any Person (other than a subsidiary of the Parent Company) in which the Parent Company or any of its subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Parent Company or such subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any subsidiary of the Parent Company to the extent that the declaration or payment of dividends or similar distributions by such subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or requirement of law applicable to such subsidiary.
“Consolidated Total Debt” means, as of any date of determination, the aggregate stated balance sheet amount of all indebtedness for borrowed money of the Parent Company and its subsidiaries (or, if higher, the par value or stated face amount of all such indebtedness for borrowed money (other than zero coupon indebtedness for borrowed money)) on a consolidated basis on such date.
“Continuation/Conversion Notice” is defined in Section 2.6.
“Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Credit Agreement” is defined in the preamble hereof.
“Credit Extension” means the making of a Revolving Loan or an L/C Credit Extension, as applicable.
“Default” shall mean any event or circumstance that, with the giving of notice, the lapse of time or both would constitute an Event of Default.
“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition of any property by any Person (including any sale and leaseback transaction and any issuance of equity interests by a subsidiary of such Person), including any sale, assignment, transfer or other disposal, with or without recourse, of any note or accounts receivable or any rights and claims associated therewith; provided that, for purposes of Section 6.14, “Disposition” shall not include any single transaction or series of related transactions involving property with a fair market value (as determined in good faith by the Borrower) of less than $1,000,000 (or such other amount as may be agreed by the Lender and the Borrower).
“Dollars” and the symbol “$” shall mean dollars in the lawful money of the United States of America.
“EEA Financial Institution” shall mean (i) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (ii) any entity established in an EEA Member Country which is a parent of
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an institution described in clause (i) of this definition or (iii) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (i) or (ii) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” shall mean any of the member states of the European Union, Iceland, Liechtenstein and Norway.
“EEA Resolution Authority” shall mean any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegate) having responsibility for the resolution of any EEA Financial Institution.
“Effective Date” shall mean the date hereof, or such other date on which the conditions precedent set forth in Section 7.1 have been satisfied in full or waived in accordance with the terms hereof.
“Environmental Law” shall mean any present or future federal, state, local or foreign statute, ordinance, rule, regulation, order, judgment, decree, permit, license or other binding determination of any governmental authority imposing liability, requiring specific actions or establishing standards of conduct for protection of the environment as the same may be amended or supplemented from time to time.
“Environmental Liability” means any liability or obligation, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), directly or indirectly, resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment, disposal or permitting or arranging for the disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with any Loan Party within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code or Section 302 of ERISA).
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the failure by any Loan Party or any ERISA Affiliate to meet all applicable requirements under the Pension Funding Rules or the filing of an application for the waiver of the minimum funding standards under the Pension Funding Rules; (c) the incurrence by any Loan Party or any ERISA Affiliate of any liability pursuant to Section 4063 or 4064 of ERISA or a cessation of operations with respect to a Pension Plan within the meaning of Section 4062(e) of ERISA; (d) a complete or partial withdrawal by any Loan Party or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is insolvent (within the meaning of Title IV of ERISA);
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(e) the filing of a notice of intent to terminate a Pension Plan under, or the treatment of a Pension Plan amendment as a termination under, Section 4041 of ERISA; (f) the institution by the PBGC of proceedings to terminate a Pension Plan; (g) any event or condition that constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (h) the determination that any Pension Plan is in at-risk status (within the meaning of Section 430 of the Code or Section 303 of ERISA) or that a Multiemployer Plan is in endangered or critical status (within the meaning of Section 432 of the Code or Section 305 of ERISA); (i) the imposition or incurrence of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate; (j) the engagement by any Loan Party or any ERISA Affiliate in a transaction that could be subject to Section 4069 or Section 4212(c) of ERISA; (k) the imposition of a lien upon any Loan Party pursuant to Section 430(k) of the Code or Section 303(k) of ERISA; or (l) the making of an amendment to a Pension Plan that could result in the posting of bond or security under Section 436(f)(1) of the Code.
“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“Event of Default” is defined in Section 8.1.
“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to the Lender or required to be withheld or deducted from a payment to the Lender, (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (a) imposed as a result of the Lender being organized under the laws of, having its principal office or its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (b) that are Other Connection Taxes, (ii) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Revolving Loan or Revolving Loan Commitment pursuant to a law in effect on the date on which (a) such Lender acquires such interest in the Revolving Loan or Revolving Loan Commitment (other than pursuant to an assignment request by the Borrower under Section 4.4 or Section 10.3) or (b) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 4.2, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (iii) Taxes attributable to such Lender’s failure to comply with Section 4.2(f), and (iv) any U.S. federal withholding Taxes imposed under FATCA.
“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Credit Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code.
“FCPA” is defined in Section 5.11(b).
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“Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States.
“Floating Rate” shall the per annum rate of interest announced publicly by the Lender, in New York, N.Y. from time to time as its “base rate”. The Floating Rate will change simultaneously with any announced change in Lender’s base rate.
“Floating Rate Loan” means a Revolving Loan that bears interest at a rate based on the Floating Rate.
“Floor” means a rate of interest equal to 0.00%.
“Foreign Plan” means any employee pension benefit plan, program, policy, arrangement or agreement maintained or contributed to by any Loan Party or any of their subsidiaries with respect to employees employed outside the United States (other than any governmental arrangement).
“Foreign Subsidiary” means any direct or indirect subsidiary of a Loan Party that is not incorporated or organized under the laws of a state within the United States of America or the District of Columbia.
“GAAP” shall mean generally accepted accounting principles in the United States.
“Governmental Authority” shall mean the government of any nation or any political subdivision thereof, whether at the national, state, territorial, provincial, municipal or any other level, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of, or pertaining to, government.
“Group Structure Chart” means the most recent group structure chart of the Parent Company and its subsidiaries delivered to the Lender by the Borrower on or prior to the date of this Credit Agreement.
“Guarantor” means the Parent Company and each of the Subsidiary Loan Parties.
“Guaranty” means that certain Guaranty dated as of the date here between the Guarantors and the Lender.
“Hazardous Materials” means (i) any gasoline, petroleum or petroleum products or by-products, radioactive materials, friable asbestos or asbestos-containing materials, urea-formaldehyde insulation, polychlorinated biphenyls and radon gas and (ii) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.
“Immaterial Subsidiary” means, as of any date, any subsidiary that generates, together with its Subsidiaries, not in excess of (x) 5%, with respect to any Immaterial Subsidiary individually and (y) 10%, when aggregated with all other Immaterial Subsidiaries in existence at
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such time, of the net revenues or total assets of the Parent Company and its subsidiaries for the most recently ended fiscal quarter (as determined in accordance with GAAP consistently applied).
“Incremental Commitment Effective Date” is defined in Section 2.15(c).
“Incremental Commitments” is defined in Section 2.15(a).
“Incremental Request” is defined in Section 2.15(a).
“Indemnified Taxes” shall mean (i) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (ii) to the extent not otherwise described in (i), Other Taxes.
“Indemnitee” is defined in Section 9.2.
“Interest Payment Date” means (a) as to any Floating Rate Loan, the last Business Day of each March, June, September and December and the Revolving Loan Maturity Date, as applicable and (b) as to any SOFR Loan, the last day of each Interest Period therefor and, in the case of any Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at three month intervals after the first day of such Interest Period, and the Revolving Loan Maturity Date, as applicable.
“Interest Period” means, as to any Revolving Loan, the period commencing on the date of advance such Revolving Loan and ending on the numerically corresponding day in the calendar month that is one, three or six months thereafter (in each case, subject to the availability thereof), as specified in the applicable Notice of Borrowing or Continuation/Conversion Notice; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period, (iii) no Interest Period shall extend beyond the Revolving Loan Maturity Date and (iv) no tenor that has been removed from this definition pursuant to Section 2.16(d) shall be available for specification in such Notice of Borrowing or Continuation/Conversion Notice. For purposes hereof, the date of a Revolving Loan initially shall be the date on which such Revolving Loan is made and thereafter shall be the effective date of the most recent conversion or continuation of such Revolving Loan.
“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of equity interests or debt or other securities of another Person, (b) a loan, advance or capital contribution to, guaranty or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor incurs guarantees in respect of such
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other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment but giving effect to any returns or distributions of capital or repayment of principal actually received in case by such Person with respect thereto.
“IRS” means the United States Internal Revenue Service.
“ISP” means the International Standby Practices, International Chamber of Commerce Publication No. 590 (or such later version thereof as may be in effect at the applicable time).
“L/C Commitment” means the obligation of the Lender to issue Letters of Credit for the Account of the Borrower in an aggregate principal amount not to exceed two Million Dollars ($2,000,000) or such other amount as the Lender may consent to in writing. The L/C Commitment is a sublimit of the Revolving Loan Commitment.
“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance or renewal thereof, the extension of the expiry date thereof, or the reinstatement or increase of the amount thereof.
“L/C Disbursement” means a payment made by the Lender pursuant to a Letter of Credit.
“L/C Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time, determined without regard to whether any conditions to drawing could be met at that time, plus (b) the aggregate amount of all L/C Disbursements that have not yet been reimbursed by or on behalf of the Borrower or converted into a Revolving Loan pursuant to the terms hereof at such time. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.13 or Rule 3.14 of the ISP or similar terms in the governing rules or laws or of the Letter of Credit itself, or if compliant documents have been presented but not yet honored, such Letter of Credit shall be deemed to be “outstanding” and “undrawn” in the amount so remaining available to be paid, and the obligations of the Borrower shall remain in full force and effect until the Lender shall have no further obligations to make any payments or disbursements under any circumstances with respect to any Letter of Credit.
“L/C Related Documents” means, as to any Letter of Credit, each application therefor, including an Application, and any other document, agreement or instrument entered into by the Borrower or any Affiliate with or in favor of the Lender and relating to such Letter of Credit.
“Lender” is defined in the preamble hereof.
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“Lender’s Office” means the Lender’s address at 1 Market St, Floor 41, San Francisco, CA 94105 and, as appropriate, account as the Lender may from time to time notify the Borrower in writing.
“Letter of Credit” is defined in Section 3.1(a).
“Letter of Credit Availability Period” means the period commencing on the Effective Date up to but excluding the Letter of Credit Maturity Date.
“Letter of Credit Fee” is defined in Section 3.3(a).
“Letter of Credit Maturity Date” means the date falling ten (10) Business Days prior to the Revolving Loan Maturity Date.
“Lien” shall mean any mortgage, deed of trust, pledge, lien (statutory or otherwise), security interest, charge or other encumbrance or security or preferential arrangement of any nature whatsoever.
“Liquidity” means, as of any date of determination, the sum of (i) the amount of Unrestricted Cash of the Parent Company and its subsidiaries as of such date, and (ii) the Available Revolving Commitments under this Credit Agreement at such time.
“Loan Account” is defined in Section 2.11.
“Loan Documents” shall mean each of this Credit Agreement, the Revolving Note, the Guaranty, the Collateral Documents, each Cash Management Agreement, each L/C Related Document, and each other document, instrument and agreement executed and delivered pursuant to or in connection herewith or therewith, as the same may be amended, supplemented or otherwise modified from time to time.
“Loan Parties” means the Borrower and the Guarantors.
“Margin Stock” is defined in Section 5.12(b).
“Material Adverse Effect” shall mean (a) a material adverse change in, or a material adverse effect on, the operations, business, properties, liabilities (actual or contingent), condition (financial or otherwise) or prospects of the Parent Company and its subsidiaries taken as a whole; or (b) a material adverse effect on any of (i) the ability of any Loan Party to perform any of its material obligations hereunder, under the Revolving Note or under any other Loan Document to which it is a party, (ii) the legality, validity or enforceability of this Credit Agreement, the Revolving Note or any other Loan Document or (iii) the rights, remedies and benefits available to, or conferred upon, the Lender under any Loan Document.
“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate makes or is obligated to make contributions, during the preceding five plan years has made or been obligated to make contributions, or has any liability.
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“Multiple Employer Plan” means a Plan with respect to which any Loan Party or any ERISA Affiliate is a contributing sponsor, and that has two or more contributing sponsors at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.
“Notice of Borrowing” is defined in Section 2.2.
“Obligations” means (a) the unpaid principal of and interest on (including interest accruing after the maturity of the Revolving Loans and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to any Loan Party, whether or not a claim for post-filing or post-petition interest is allowed or allowable in such proceeding) the Revolving Loans and all other obligations and liabilities (including any fees or expenses that accrue after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to any Loan Party, whether or not a claim for post-filing or post-petition interest is allowed or allowable in such proceeding) of the Loan Parties to the Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Credit Agreement, any other Loan Document (including, for the avoidance of doubt, any Cash Management agreement), the Letters of Credit, or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, payment obligations, fees, indemnities, costs, expenses (including all reasonable and documented out-of-pocket fees, charges and disbursements of counsel to the Lender that are required to be paid by any Loan Party pursuant any Loan Document, Cash Management Agreement or otherwise, and (b) any obligation of any other Affiliate or Subsidiary of a Loan Party arising in connection with any Cash Management Agreements.
“Organizational Documents” shall mean, as to any Person, the articles of incorporation, bylaws, limited liability company agreement, operating agreement or other organizational or governing documents of such Person.
“Other Connection Taxes” shall mean, with respect to the Lender, Taxes imposed as a result of a present or former connection between the Lender and the jurisdiction imposing such Tax (other than connections arising from the Lender having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Revolving Loan or Loan Document).
“Other Taxes” shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 4.4).
“Participant” is defined in Section 10.3(c).
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“Participant Register” is defined in Section 10.3(c).
“Parent Company” means CuriosityStream Inc. a Delaware corporation.
“PATRIOT Act” is defined in Section 10.12.
“PBGC” means the Pension Benefit Guaranty Corporation.
“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum funding standards and minimum required contributions (including any installment payment thereof) to Pension Plans and Multiemployer Plans and set forth in Sections 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.
“Pension Plan” means any employee pension benefit plan (including a Multiple Employer Plan, but excluding a Multiemployer Plan) that is maintained or is contributed to by any Loan Party or any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.
“Permitted Acquisition” means any acquisition by (a) any Loan Party or any subsidiary of any Loan Party of all or substantially all of the assets of a Person, or of all or substantially all of any business, unit or division of a Person or (b) any Loan Party or any subsidiary of any Loan Party of a majority of the capital stock, partnership interests, membership interests or other equity of any Person, in each case to the extent that (i) no Default or Event of Default has occurred and is continuing or would result therefrom, and (ii) after giving effect to such Permitted Acquisition, the Borrower is in pro forma compliance with the financial covenants set forth in Section 6.20 and Section 6.21; provided that the aggregate consideration for all such Permitted Acquisitions consummated in any fiscal year shall not exceed $2,000,000.
“Permitted Licenses” means the exclusive or non-exclusive licensing or sublicensing of, or sale of rights to, audio and video content, related data assets and other media owned by the Parent Company or any of its subsidiaries.
“Permitted Liens” means:
(a) liens listed on Schedule 6.13 to this Credit Agreement;
(b) liens for taxes, assessments or governmental charges, liens incident to construction and easements, restrictions, minor title irregularities and similar matters;
(c) liens or deposits in connection with workers’ compensation or other insurance or to secure customs’ duties, public or statutory obligations in lieu of surety, stay or appeal bonds, or to secure performance of contracts or bids (other than contracts for the payment of money borrowed), or deposits required by law or governmental regulations or by any court order, decree, judgment or rule as condition to the transaction of business or the exercise of any right, privilege or license; or other liens or deposits of a like nature made in the ordinary course of business (including landlords’ liens for non-payment of rent);
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(d) liens in favor of Lender;
(e) zoning restrictions and easements, licenses, covenants and other restrictions affecting the use of real property that do not individually or in the aggregate have a Material Adverse Effect on any Loan Party’s ability to use such real property for its intended purpose in connection with such Loan Party’s business;
(f) liens in connection with purchase money debt and capitalized leases otherwise permitted pursuant to this Credit Agreement, provided, that such liens attach only to the assets the purchase of which was financed by such purchase money debt or that are the subject of such capitalized leases, and any replacements, additions and accessions thereto and any income, proceeds or profits thereof so long as the amount thereof is not increased;
(g) judgment liens arising solely as a result of the existence of judgments, orders or awards that do not otherwise constitute an Event of Default and provided the execution or other enforcement of such liens is effectively stayed and the claims secured thereby are being actively contested in good faith and by appropriate proceedings;
(h) liens that are replacements, additions or accessions of otherwise Permitted Liens to the extent that the original debt secured thereby is permitted hereunder and so long as (A) the replacement liens only encumber those assets that secured the original debt, (B) the priority of such replacement lien shall be the same as, or junior to, the priority of the lien so replaced and (C) the amount of the original debt secured thereby is not increased;
(i) rights of setoff or bankers’ liens upon deposits of funds in favor of banks or other depository institutions, solely to the extent incurred in connection with the maintenance of such deposit accounts of any Loan Party and its subsidiaries in the ordinary course of business;
(j) Liens in favor of credit card processors, payment processors, or similar entities in connection with credit card or payment processing arrangements, in each case in the ordinary course of business;
(k) Reserved;
(l) liens arising in the ordinary course of business in favor of collecting banks arising under Section 4-210 of the Uniform Commercial Code (or analogous provision);
(m) Liens arising solely by operation of law (including mechanics’, materialmen’s, carriers’, warehousemen’s, landlords’ and similar liens) incurred in the ordinary course of business and not securing indebtedness for borrowed money, provided such liens are not overdue for more than thirty (30) days or are being contested in good faith by appropriate proceedings;
(n) Liens on cash or Cash Equivalents securing obligations in respect of letters of credit, bank guarantees, performance bonds or similar instruments issued in the ordinary
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course of business and in an aggregate amount not exceeding $500,000 at any time outstanding; provided that any Lien incurred pursuant to this clause in favor of the Lender or any of its Affiliates shall not count towards the $500,000 cap;
(o) Liens on insurance policies and the proceeds thereof, or on the unearned portion of insurance premiums, securing the financing of insurance premiums in the ordinary course of business;
(p) Liens securing intercompany indebtedness among the Loan Parties and their subsidiaries, provided such indebtedness is permitted under this Credit Agreement and is subordinated to the obligations under the Loan Documents and in an aggregate amount not exceeding $500,000 at any time outstanding; and
(q) Liens arising in connection with Permitted Licenses, to the extent that the grant of such license or sublicense would be deemed to create a Lien under applicable law.
“Person” shall mean any natural person, company, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization, joint venture, governmental authority or other entity.
“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA, maintained for employees of any Loan Party or any of their subsidiaries or any such plan to which any Loan Party or any of their subsidiaries is required to contribute on behalf of any of its employees or with respect to which any Loan Party or any of their subsidiaries has any liability.
“Primary Depositary Relationship” means the principal deposit and operating accounts and principal cash management and depository relationship of the Loan Parties and their subsidiaries.
“Related Parties” with respect to any Person, means such Person’s Affiliates and the directors, officers, employees, partners, agents, trustees, administrators, managers, advisors and representatives of it and its Affiliates.
“Relevant Governmental Body” means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.
“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30-day notice period has been waived.
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any equity interest of any Person, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on
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account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such equity interest, or on account of any return of capital to such Person’s shareholders, partners or members (or the equivalent Persons thereof).
“Revolving Credit Exposure” means, at any time of determination, the aggregate principal amount at such time of the outstanding Revolving Loans at such time.
“Revolving Loan” is defined in Section 2.1.
“Revolving Loan Commitment” means $10,000,000, as such amount may be increased or decreased pursuant to the terms hereof.
“Revolving Loan Maturity Date” shall mean March 12, 2029, or such earlier date on which the Revolving Loan Commitment is terminated in full hereunder.
“Revolving Note” means the promissory note of the Borrower evidencing the Revolving Loans, payable to the Lender, substantially in the form of Exhibit A hereto, as the same may be amended, supplemented and otherwise modified from time to time, or any substitute therefor.
“Sanctions” is defined in Section 5.11.
“Secured Parties” means the Lender and each Affiliate of the Lender that provides Cash Management Services.
“Security Agreement” means that certain Security Agreement dated as of the date hereof, made by the Loan Parties in favor of Lender.
“SOFR” means on any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate) on the website of the Federal Reserve Bank of New York, currently a thttp://www.newyorkfed.org (or any successor source for the secured overnight financing rate identified as such by the administrator of the secured overnight financing rate from time to time).
“SOFR Loan” means a Revolving Loan that bears interest at a rate based on Adjusted Term SOFR.
“Subsidiary Loan Parties” shall mean any Wholly-Owned Subsidiary that is required to execute or become party to the Guaranty pursuant to Section 6.18.
“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term SOFR” means, for the applicable corresponding tenor, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.
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“Term SOFR Reference Rate” means the forward-looking term rate based on SOFR.
“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unrestricted Cash” means, at any time, the aggregate amount of unrestricted cash and Cash Equivalents held in Deposit Accounts or Securities Accounts (each as defined in the Security Agreement) of the Parent Company and its subsidiaries that is free and clear of all Liens other than (i) Liens created by the Loan Documents or (ii) other Liens permitted hereunder; provided that any such Liens are subordinated to or pari passu with the Liens in favor of the Lender (and perfected to no greater extent than the Liens on such cash and cash equivalents in favor of the Lender).
“Unused Fee” is defined in Section 2.14.
“Wholly-Owned Subsidiary” means, as to a subsidiary of a Person, a subsidiary of such Person all of the outstanding equity interests of which (other than (a) director’s qualifying shares and (b) shares issued to foreign nationals to the extent required by applicable law) are owned by such Person or by one or more Wholly-Owned Subsidiaries of such Person. As used herein, references to a Wholly-Owned Subsidiary are to Wholly-Owned Subsidiaries of the Borrower.
“Write-Down and Conversion Powers” shall mean, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
Section 1.2Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” The word “or” is not exclusive. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as
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referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Credit Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Credit Agreement, (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, and (g) the words “renew”, “renewal” and variations thereof as used herein with respect to a Letter of Credit means to extend the stated expiration date of such Letter of Credit, to reinstate an amount drawn under such Letter of Credit or both.
Section 1.3Accounting Terms; Changes in GAAP.
(a)Accounting Terms. Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall be construed in conformity with GAAP. Financial statements and other information required to be delivered by the Borrower or any other Loan Party to the Lender pursuant to Section 6.1(a) and Section 6.1(b) shall be prepared in accordance with GAAP as in effect at the time of such preparation. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, indebtedness for borrowed money of the Parent Company and its subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.
(b)Changes in GAAP. If the Borrower notifies the Lender that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Lender notifies the Borrower that it requests an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.
Section 1.4Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the amount available to be drawn under such Letter of Credit at such time; provided that with respect to any Letter of Credit that, by its terms, provides for one or more automatic increases in the available amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum amount is available to be drawn at such time.
SECTION 2
THE REVOLVING LOANS
THE REVOLVING LOANS
Section 2.1The Revolving Loan Commitment. On the terms and subject to the conditions of this Credit Agreement, the Lender agrees, from time to time on any Business Day during the period commencing on the Effective Date up to but excluding the Revolving Loan Maturity Date, to make revolving loans consisting of SOFR Loans to the Borrower (the “Revolving Loans”) in amounts permitted hereunder, which will not exceed the lesser of Revolving Loan Commitment or the Available Revolving Commitment at such time. The
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Revolving Loan Commitment shall be subject to reduction and/or termination as herein provided. On the terms and subject to the conditions hereof, the Borrower may from time to time borrow, repay and reborrow Revolving Loans. Any such borrowing shall be denominated in Dollars, and shall be in the aggregate principal amount of $100,000, or any whole multiple of $5,000 in excess thereof. On the Revolving Loan Maturity Date, the Revolving Loan Commitment shall automatically terminate and the Lender shall have no obligation whatsoever to make any further Revolving Loans to the Borrower.
Section 2.2Making the Revolving Loans. Each Revolving Loan shall be made upon written notice, given by the Borrower to the Lender at least three (3) Business Days prior to the proposed borrowing date thereof. Each such notice shall be in the form attached hereto as Exhibit B (a “Notice of Borrowing”), shall be irrevocable and shall specify therein (i) the proposed borrowing date, which shall be a Business Day, (ii) the principal amount of such Revolving Loan (iii) the duration of the initial Interest Period therefor (if such Revolving Loans are SOFR Loans), and (iv) the location and number of the Borrower’s account to which funds are to be disbursed, which account shall be an account of the Borrower held with the Lender. Upon fulfillment of the applicable conditions set forth in SECTION 7 (or the waiver thereof by the Lender as herein prescribed), the Lender will make the proceeds of such Revolving Loan available to the Borrower in same day funds at the Lender’s Office by wire transfer of such funds in accordance with the instructions provided in the applicable Notice of Borrowing. The Borrower agrees that the Lender may, at its option, make any Revolving Loan hereunder by causing any foreign or domestic branch or affiliate of the Lender to make such Revolving Loan; provided that, any exercise of such option shall not affect the obligation of the Borrower to repay such Revolving Loan in accordance with the terms hereof.
Section 2.3Interest.
(a)The Revolving Loans shall bear interest on the outstanding principal amount thereof from the date hereof to the Revolving Loan Maturity Date at a rate per annum equal to, at the election of the Borrower, (a) the sum of the Floating Rate plus the Applicable Margin or (b) the sum of Adjusted Term SOFR for the applicable Interest Period plus the Applicable Margin. Interest shall accrue from and including the first day of an Interest Period to, but excluding, the last day of such Interest Period. Notwithstanding anything herein to the contrary, all accrued interest shall be payable (i) on each date principal is payable hereunder or such earlier date as herein required, and (ii) on the date any Revolving Loan of one type is converted into a Revolving Loan of another type.
(b)Accrued interest on each Revolving Loan shall be payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein; provided that (i) interest accrued pursuant to Section 2.5 shall be payable on demand, (ii) in the event of any repayment or prepayment of any Revolving Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any SOFR Loan prior to the end of the Interest Period therefor, accrued interest on such SOFR Loan shall be payable on the effective date of such conversion.
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(c)In connection with the use or administration of Term SOFR, the Lender will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Credit Agreement or any other Loan Document. The Lender will promptly notify the Borrower of the effectiveness of any Conforming Changes in connection with the use or administration of Term SOFR.
Section 2.4Principal Repayment; Revolving Note.
The Borrower shall repay the outstanding principal balance of all outstanding Revolving Loans, together with accrued interest and all other amounts due and owing hereunder or under the other Loan Documents, on the Revolving Loan Maturity Date at the Lender’s Office in Dollars. The Borrower’s obligations to the Lender with respect to the payment of interest and principal with respect to the Revolving Loans shall be evidenced by this Credit Agreement and the Revolving Note.
Section 2.5Default Interest. Any principal, interest or other obligation hereunder or under any other Loan Document which is not paid when due, whether at stated maturity, by acceleration or otherwise, shall bear interest from the day when due until said principal, interest or other amount is paid in full, payable on demand, at a rate equal at all times to the applicable interest rate plus 2% per annum.
Section 2.6Continuation and Conversion Elections. The Borrower shall have the right, at any time, on delivery of an irrevocable written notice (a “Continuation/Conversion Notice”) to the Lender to (i) to continue a SOFR Loan or any portion thereof for an additional Interest Period (which notice shall specify the duration of such subsequent Interest Period) or (ii) convert a Floating Rate Loan or any portion thereof into a SOFR Loan subject, in each case, to the following:
(a)no Default or Event of Default shall have occurred and be continuing at the time of such continuation or conversion;
(b)in the case of a continuation or conversion of less than all such Revolving Loans, the aggregate principal amount of any SOFR Loan shall be in an amount that is not less than $100,000 and in integral multiples of $5,000 in excess thereof; and
(c)the Lender shall receive the Continuation/Conversion Notice at least three (3) Business Days prior to the conversion to or continuation of a SOFR Loan.
In the event that the Borrower shall not give notice to continue any SOFR Loan into a subsequent Interest Period, such SOFR Loan (unless repaid) shall automatically become a SOFR Loan with an Interest Period of one (1) month at the expiration of the then-current Interest Period. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing, then, for so long as an Event of Default is continuing, unless repaid, each SOFR Loan shall be converted into a Floating Rate Loan at the end of the Interest Period applicable thereto.
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Section 2.7Optional Prepayment. Subject to the terms of Section 4.3, the Borrower may (and if such notice is given, shall), upon at least three (3) Business Days’ prior written notice to the Lender, prepay all or any portion of the principal amount outstanding of any Revolving Loans together with accrued interest to the date of such prepayment on the amount prepaid; provided, however, that (i) prepayments of Revolving Loans prior to the Revolving Loan Maturity Date shall not reduce the Revolving Loan Commitment; (ii) all prepayments made pursuant to this Section 2.7 shall be in amounts of not less than $100,000, or any integral multiple of $5,000 in excess thereof and (iii) any Revolving Loan may be designated by the Borrower to be prepaid if and only to the extent that prepayment is made on the last day of an Interest Period or subject to the payment of amounts described in Section 4.3. Each prepayment made pursuant to this Section 2.7 shall be accompanied by the payment of (i) accrued interest to date of such prepayment on the amount prepaid and (ii) any and all payments required pursuant to Section 4.3 in respect of such prepayment. Each notice of prepayment shall be irrevocable and shall specify the date and the amount of the prepayment.
Section 2.8Inability to Determine Rates. Subject to Section 2.16, if prior to the first day of any Interest Period:
(a)the Lender determines (which determination shall be conclusive absent manifest error) that “Adjusted Term SOFR” cannot be determined pursuant to the definition thereof, or
(b)the Lender determines that for any reason in connection with any request for a SOFR Loan or a conversion thereto or a continuation thereof that Adjusted Term SOFR for any requested Interest Period with respect to a proposed SOFR Loan does not adequately and fairly reflect the cost to the Lender of making and maintaining such Revolving Loan,
(c)then the Lender shall promptly notify the Borrower. Thereafter, any obligation of the Lender to make SOFR Loans, and any right of the Borrower to continue SOFR Loans or to convert Floating Rate Loans to SOFR Loans, shall be suspended (to the extent of the affected SOFR Loans or affected Interest Periods) until the Lender revokes such notice. Upon receipt of such notice, (i) the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of SOFR Loans (to the extent of the affected SOFR Loans or affected Interest Periods) or, failing that, the Borrower will be deemed to have converted any such request into a request for a Floating Rate Loan or conversion to Floating Rate Loans in the amount specified therein and (ii) any outstanding affected SOFR Loans will be deemed to have been converted into Floating Rate Loans at the end of the applicable Interest Period. Upon any such conversion, the Borrower shall also pay accrued interest on the amount so converted, together with any additional amounts required pursuant to Section 4.3.
Section 2.9Illegality. If the Lender determines that any law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for the Lender or its applicable lending office to make, maintain or fund Revolving Loans whose interest is determined by reference to SOFR, the Term SOFR Reference Rate, Adjusted Term SOFR or Term SOFR, or to determine or charge interest based upon SOFR, the Term SOFR Reference Rate, Adjusted Term SOFR or Term SOFR, then, upon notice thereof by the Lender to the Borrower (an “Illegality
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Notice”), any obligation of the Lender to make SOFR Loans, and any right of the Borrower to continue SOFR Loans or to convert Floating Rate Loans to SOFR Loans, shall be suspended until the Lender notifies the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of an Illegality Notice, the Borrower shall, if necessary to avoid such illegality, upon demand from the Lender, prepay or, if applicable, convert all SOFR Loans to Floating Rate Loans, on the last day of the Interest Period therefor, if the Lender may lawfully continue to maintain such SOFR Loans to such day, or immediately, if the Lender may not lawfully continue to maintain such SOFR Loans to such day. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted, together with any additional amounts required pursuant to Section 4.3.
Section 2.10Method of Payment.
(a)All sums payable by any Loan Party to the Lender hereunder or under the Revolving Note or under any other Loan Document shall be payable in New York, New York, in Dollars, in immediately available funds and without any defense, set-off or counterclaim, no later than 2:00 p.m. New York time on the day when due, for the account of and as directed by the Lender. Any payments made after 2:00 p.m. (New York time) on any day shall be deemed to have been made on the immediately following Business Day.
(b)Any payments shall be applied first to default charges, indemnities, expenses and other non-principal and interest amounts owed under any of the Loan Documents, if any, then to interest due and payable on the Revolving Loans, and thereafter to the principal amount of the Revolving Loans due and payable, and thereafter to the payment of any other Obligations, including Obligations in respect of Cash Management Services.
(c)All computations of interest shall be made by the Lender on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable; provided, however, that if a Revolving Loan is repaid on the same day on which it is made, one (1) day’s interest shall be paid on such Revolving Loan.
(d)Whenever any payment to be made hereunder or under any instrument delivered hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of the payment of interest; provided however, that if such extension would cause such payment to be made in a new calendar month or beyond the Revolving Loan Maturity Date, as the case may be, such payment shall be made on the next preceding Business Day.
Section 2.11Loan Account. The Lender maintains on its books a loan account in the name of the Borrower (the “Loan Account”), showing the Revolving Loans, prepayments, the computation and payment of interest, and any other amounts due and sums paid hereunder and under the other Loan Documents. The entries made by the Lender in the Loan Account shall be conclusive and binding on the Borrower and the Lender as to the amount at any time due from the Borrower, absent manifest error.
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Section 2.12Use of Proceeds. The Borrower shall apply the proceeds of the Revolving Loans and use the Letters of Credit issued hereunder solely (a) to pay certain fees, costs and expenses incurred in connection with the negotiation and entering into this Credit Agreement, and (b) for working capital requirements and general corporate purposes; provided, however, that no portion of the proceeds of any of the Revolving Loans or any Letter of Credit may be used to acquire any Margin Stock or otherwise be used in a manner which would violate Section 8 of the Securities Exchange Act of 1934, as amended and as in effect from time to time, or any regulations issued pursuant thereto.
Section 2.13Reserved.
Section 2.14Unused Fee. The Borrower agrees to pay to the Lender an unused fee (the “Unused Fee”), which shall accrue at the rate of 0.350% per annum on the average daily amount of the Available Revolving Commitment during the period from and including the Effective Date to but excluding the earlier of the date such Revolving Loan Commitment terminates and the Revolving Loan Maturity Date. The accrued Unused Fee shall be payable in arrears within one (1) Business Day after the end of each calendar quarter and on the earlier of the date the Revolving Loan Commitments terminate and the Revolving Loan Maturity Date, commencing on the first such date to occur after the Effective Date. The Unused Fee shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
Section 2.15Incremental Commitments.
(a)Request for Revolving Loan Commitment Increase. The Borrower may, at any time and from time to time, by written notice to the Lender (such notice, an “Incremental Request”), request increases in the Revolving Loan Commitment (such increases, the “Incremental Commitments”) to an aggregate amount not exceeding $20,000,000; provided, that the Borrower shall make no more than three (3) requests for Incremental Commitments hereunder.
(b)Incremental Lender. An Incremental Commitment may only be provided by the Lender. Notwithstanding anything herein to the contrary, the Lender shall have no obligation to agree to provide an Incremental Commitment pursuant to this Section and any election to do so shall be in the sole discretion of the Lender.
(c)Terms of Incremental Commitment. The Lender and the Borrower shall determine the effective date for an Incremental Commitment pursuant to this Section (an “Incremental Commitment Effective Date”); provided that such date shall be a Business Day at least 90 days prior to the Revolving Loan Maturity Date. Effective as of the Incremental Commitment Effective Date, the Incremental Commitment Increase shall be a Revolving Loan Commitment (but not a separate facility hereunder) and the amount of commitments set forth in the definition of Revolving Loan Commitment shall be updated accordingly to reflect such Incremental Commitment.
Section 2.16Benchmark Replacement Setting.
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(a)Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Loan Document, upon the occurrence of a Benchmark Transition Event, the Lender and the Borrower may amend this Credit Agreement to replace the then-current Benchmark with a Benchmark Replacement. No replacement of a Benchmark with a Benchmark Replacement pursuant to this Section 2.16 will occur prior to the applicable Benchmark Transition Start Date.
(b)Benchmark Replacement Conforming Changes. In connection with the implementation and administration of a Benchmark Replacement, the Lender will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Credit Agreement or any other Loan Document.
(c)Notices; Standards for Decisions and Determinations. The Lender will promptly notify the Borrower of (i) the implementation of any Benchmark Replacement and (ii) the effectiveness of any Benchmark Replacement Conforming Changes. For the avoidance of doubt, any notice required to be delivered by the Lender as set forth in this Section 2.16 may be provided, at the option of the Lender (in its sole discretion), in one or more notices and may be delivered together with, or as part of any amendment which implements any Benchmark Replacement or Benchmark Replacement Conforming Changes. Any determination, decision or election that may be made by the Lender pursuant to this Section 2.16, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in its sole discretion and without consent from any other party hereto, except, in each case, as expressly required pursuant to this Section 2.16.
(d)Unavailability of Tenor of Benchmark. At any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including Term SOFR), then the Lender may remove any tenor of such Benchmark that is unavailable or non-representative for Benchmark (including Benchmark Replacement) settings and (ii) the Lender may reinstate any such previously removed tenor for Benchmark (including Benchmark Replacement) settings.
(e)Benchmark Unavailability Period. Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, (i) the Borrower may revoke any pending request for a SOFR Loan of, conversion to or continuation of SOFR Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request into a request for a Revolving Loan of or conversion to Floating Rate Loans and (ii) any outstanding affected SOFR Loans will be deemed to have been converted to Floating Rate Loans at the end of the applicable Interest Period.
SECTION 3
LETTERS OF CREDIT
LETTERS OF CREDIT
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Section 3.1L/C Commitment.
(a)Subject to the terms and conditions hereof, the Lender agrees to issue letters of credit (each, a “Letter of Credit”) for the account of the Borrower on any Business Day during the Letter of Credit Availability Period, in such form as may reasonably be approved by the Lender from time to time; provided that the Lender shall have no obligation to issue any Letter of Credit if, after giving effect to such issuance, the L/C Exposure would exceed either the L/C Commitment or the Available Revolving Commitment at such time. Unless otherwise agreed by the Lender in its sole discretion, each Letter of Credit shall (i) be denominated in Dollars and (ii) expire no later than the earlier of (x) the first anniversary of its date of issuance, and (y) the Letter of Credit Maturity Date, provided that any Letter of Credit with a one-year term may provide for the automatic renewal for additional one-year periods (which shall in no event extend beyond the date referred to in clause (y) above).
(b)The Lender shall not be obligated to issue, amend, renew, or reinstate any Letter of Credit if:
(i)such issuance, amendment, renewal or reinstatement would violate, or cause the Lender to exceed any limits imposed hereunder or by, any applicable law;
(ii)any order, judgment or decree of any Governmental Authority or arbitrator prohibits or restrains such action, or any or any law, rule or regulation applicable to the Lender or any request, guideline or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Lender prohibits or requests the Lender to refrain from issuing, amending, renewing, or reinstating letters of credit generally or the requested Letter of Credit, or imposes any new restriction, reserve, or capital requirement (not in effect as of the Effective Date and for which the Lender is not otherwise compensated), or results in any unreimbursed loss, cost, or expense (not applicable as of the Effective Date) that the Lender in good faith deems material;
(iii)any applicable condition set forth in Section 7.2 has not been satisfied;
(iv)the requested Letter of Credit is not in form and substance acceptable to the Lender, or its issuance, amendment or renewal would violate any applicable law, regulation, or the internal policies of the Lender; or
(v)the requested Letter of Credit provides for automatic reinstatement of its stated amount after any drawing.
Section 3.2Procedure for Issuance of Letters of Credit. The Borrower may request that the Lender issue a Letter of Credit for the account of the Borrower by delivering to the Lender, at its notice address specified herein, a duly completed Application, together with any certificates, documents and other papers and information as the Lender may reasonably request. Upon receipt of such Application and all required supporting materials, the Lender will process the request in accordance with its customary procedures and, subject to the terms and conditions of this Credit Agreement, will promptly issue the requested Letter of Credit; provided, however, that the Lender shall not be required to issue any Letter of Credit earlier than three (3) Business Days after its receipt of the Application and all required supporting materials. The original Letter of Credit will be delivered to the beneficiary or as otherwise agreed by the Lender and the
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Borrower, and the Lender will as soon as reasonably practical provide a copy of the issued Letter of Credit to the Borrower.
Section 3.3Fees and Other Charges.
(a)The Borrower agrees to pay, with respect to each outstanding Letter of Credit issued for the account of (or at the request of) the Borrower: (i) a letter of credit fee equal to the Applicable Margin, multiplied by the daily amount available to be drawn under each such Letter of Credit (the “Letter of Credit Fee”), payable quarterly in arrears on the first Business Day of March, June, September and December of each year and on the Letter of Credit Maturity Date after the issuance date of such Letter of Credit; and (ii) the Lender's standard and reasonable fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit issued for the account of (or at the request of) the Borrower, or processing drawings thereunder. All Letter of Credit Fees shall be computed on the basis of the actual number of days elapsed in a year of 360 days.
(b)In addition to the foregoing fees, the Borrower shall pay or reimburse the Lender for such normal and customary costs and expenses as are incurred or charged by the Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit.
(c)The Borrower shall furnish to the Lender such other documents and information pertaining to any requested Letter of Credit issuance, amendment or renewal, including any L/C Related Documents, as the Lender may require.
(d)All fees payable under this Section 3.3 shall be fully earned on the date paid and nonrefundable.
Section 3.4Reimbursement. If the Lender makes any L/C Disbursement in respect of a Letter of Credit, the Lender shall notify the Borrower thereof, and the Borrower shall pay to the Lender an amount equal to such L/C Disbursement not later than the immediately following Business Day. Each such payment shall be made to the Lender at its address for notices specified herein, in Dollars and in immediately available funds; provided, however, that the Borrower may, subject to the satisfaction of the conditions to borrowing set forth herein, request in accordance with Section 2.2 that such payment be financed with a Revolving Loan in an equivalent amount, and to the extent so financed, the Borrower's obligation to make such payment shall be discharged and replaced by the resulting Revolving Loan.
Section 3.5Obligations Absolute. The Borrower's obligations under this SECTION 3 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment that the Borrower may have or have had against the Lender, any beneficiary of a Letter of Credit or any other Person. The Borrower also agrees with the Lender that the Lender shall not be responsible for, and the Borrower's obligations hereunder shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred, or any claims
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whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee. The Lender shall not be liable for any error, omission, interruption, delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Lender. The Borrower agrees that any action taken or omitted by the Lender under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct, shall be binding on the Borrower and shall not result in any liability of the Lender to the Borrower. In addition to amounts payable as elsewhere provided in the Agreement, the Borrower hereby agrees to pay and to protect, indemnify, and save the Lender harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys' fees) that the Lender may incur or be subject to as a consequence, direct or indirect, of (A) the issuance of any Letter of Credit, or (B) the failure of the Lender to honor a demand for payment under any Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority, in each case, other than to the extent solely as a result of the gross negligence or willful misconduct of the Lender (as finally determined by a court of competent jurisdiction).
Section 3.6Letter of Credit Payments. If any draft is presented for payment under any Letter of Credit, the Lender shall as soon as reasonably practicable notify the Borrower of the date and amount thereof. The Lender's responsibility to the Borrower in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are substantially in conformity with the terms and conditions of such Letter of Credit.
Section 3.7Applications. To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Credit Agreement, the provisions of this Credit Agreement shall control.
Section 3.8Interim Interest. If the Lender makes any L/C Disbursement in respect of a Letter of Credit, and the Borrower does not reimburse such L/C Disbursement in full within the time period specified in Section 3.4, the unpaid amount shall bear interest, for the account of the Lender, for each day from and including the date of such L/C Disbursement to but excluding the date of payment by the Borrower, at the rate per annum that would apply to such amount if it were a Revolving Loan that is a Floating Rate Loan; provided that the provisions of Section 2.5 shall apply to any such amounts not paid when due.
Section 3.9Cash Collateral.
(a)Certain Credit Support Events. Upon the request of the Lender, (i) if the Lender has honored any full or partial drawing under any Letter of Credit and such drawing has not been reimbursed by the Borrower or converted into a Revolving Loan as provided herein, or (ii) if, as of the Letter of Credit Maturity Date, any L/C Exposure remains outstanding, the
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Borrower shall immediately Cash Collateralize the then effective L/C Exposure in an amount equal to one hundred five percent (105%) of such L/C Exposure.
(b)Grant of Security Interest. All Cash Collateral shall be maintained in a blocked, non-interest bearing deposit account with the Lender (the “Cash Collateral Account”). The Borrower hereby grants to, and subjects to the control of, the Lender a first priority security interest and Lien in the Cash Collateral Account and all such Cash Collateral and all proceeds thereof, as security for the obligations to which such Cash Collateral may be applied. If at any time the Lender determines that the total amount of such Cash Collateral is less than one hundred five percent (105%) of the applicable L/C Exposure and other obligations secured thereby, the Borrower will, promptly, upon demand by the Lender, provide additional Cash Collateral in an amount sufficient to eliminate such deficiency.
(c)Application. Notwithstanding anything to the contrary contained in this Credit Agreement, Cash Collateral provided under this Section or otherwise in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Exposure and other obligations for which the Cash Collateral was provided, prior to any other application of such property as may otherwise be provided for herein.
(d)Termination of Requirement. Cash Collateral (or the appropriate portion thereof) provided in respect of Letters of Credit or other obligations shall no longer be required to be held as Cash Collateral following the effective termination of the applicable L/C Exposure and other obligations giving rise thereto. The Borrower may request in writing the return of any excess Cash Collateral; provided, however, that Cash Collateral shall not be released during the continuance of an Event of Default.
Section 3.10Applicability of ISP. Unless otherwise expressly agreed by the Lender and the Borrower when a Letter of Credit is issued and subject to applicable laws, the Letters of Credit shall be governed by and subject to the rules of the ISP.
SECTION 4
YIELD PROTECTION
YIELD PROTECTION
Section 4.1Increased Costs.
(a)Increased Costs Generally. If any Change in Law shall:
(i)impose, modify or deem applicable any reserve (including pursuant to regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, special, supplemental or other marginal reserve requirement) with respect to funding based on SOFR), special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, the Lender;
(ii)subject the Lender to any Taxes (other than (A) Indemnified Taxes, (B) Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
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(iii)impose on the Lender any other condition, cost or expense (other than Taxes) affecting this Credit Agreement or Revolving Loans made by the Lender or any Letter of Credit;
(b)and the result of any of the foregoing shall be to increase the cost to the Lender of making, converting to, continuing or maintaining any Revolving Loan or of maintaining its obligation to make any such Revolving Loan, or to increase the cost to the Lender of issuing or maintaining any Letter of Credit, or to increase the cost to the Lender, or to reduce the amount of any sum received or receivable by the Lender (whether of principal, interest or any other amount) then, upon request of the Lender, the Borrower will pay to the Lender such additional amount or amounts as will compensate the Lender for such additional costs incurred or reduction suffered.
(c)Capital Requirements. If the Lender determines that any Change in Law affecting the Lender or any lending office of the Lender or the Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on the Lender’s capital or on the capital of the Lender’s holding company, if any, as a consequence of this Credit Agreement, the Revolving Loan Commitments, the Revolving Loans made by the Lender, or the Letters of Credit issued by the Lender, to a level below that which the Lender or such the Lender’s holding company could have achieved but for such Change in Law (taking into consideration the Lender’s policies and the policies of the Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to the Lender such additional amount or amounts as will compensate the Lender or the Lender’s holding company for any such reduction suffered.
(d)Certificates for Reimbursement. A certificate of the Lender setting forth the calculation, in reasonable detail, of the amount or amounts necessary to compensate the Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section and delivered to the Borrower, shall be conclusive absent manifest error. The Borrower shall pay the Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.
(e)Delay in Requests. Failure or delay on the part of the Lender to demand compensation pursuant to this Section 4.1 shall not constitute a waiver of the Lender’s right to demand such compensation; provided that, the Borrower shall not be required to compensate the Lender pursuant to this Section 4.1 for any increased costs incurred or reductions suffered more than nine (9) months prior to the date that the Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions, and of the Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).
Section 4.2Taxes.
(a)Defined Terms. For purposes of this Section 4.2, the term “applicable law” includes FATCA.
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(b)Payments Free of Taxes. Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of any Loan Party) requires the deduction or withholding of any Tax from any such payment by such Loan Party, then such Loan Party shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by such Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 4.2(b)) the Lender receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(c)Payment of Other Taxes by the Loan Parties. Each Loan Party shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Lender timely reimburse it for the payment of, any Other Taxes.
(d)Indemnification by the Borrower. The Borrower shall indemnify the Lender, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 4.2(d)) payable or paid by the Lender or required to be withheld or deducted from a payment to the Lender and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by the Lender shall be conclusive absent manifest error.
(e)Evidence of Payments. As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 4.2, the Borrower shall deliver to the Lender the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Lender.
(f)Status of Lender. If the Lender is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document, it shall deliver to the Borrower, at the time or times reasonably requested by the Borrower, such properly completed and executed documentation reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, the Lender, if reasonably requested by the Borrower, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower as will enable the Loan Parties to determine whether or not the Lender is subject to backup withholding or information reporting requirements. The Lender shall deliver to the Borrower on or prior to the date on which such Lender becomes a Lender under this Credit Agreement (and from time to time thereafter upon the reasonable request of the Borrower), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax. If a payment made to a Lender would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in
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Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower at the time or times prescribed by law and at such time or times reasonably requested by the Borrower such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower as may be necessary for Loan Parties to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender's obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of prior sentence, “FATCA” shall include any amendments made to FATCA after the date of this Credit Agreement.
(g)If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 4.2 (including by the payment of additional amounts pursuant to this Section 4.2), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other, than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(h)Each party’s obligations under this Section shall survive any assignment of rights by, or the replacement of, a Lender, the termination of the Revolving Loan Commitments, the expiration or cancellation of all Letters of Credit and the repayment, satisfaction or discharge of all obligations under any Loan Document.
Section 4.3Breakage Costs In the event of (a) the payment of any principal of any SOFR Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any SOFR Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default) or (c) the failure to borrow, convert, continue or prepay any SOFR Loan on the date specified in any notice delivered pursuant hereto, then, in any such event, the Borrower shall compensate the Lender for any loss, cost and expense attributable to such event, including any loss, cost or expense arising from the liquidation or redeployment of funds or from any fees payable. A certificate of the Lender setting forth the calculation, in reasonable detail, of any amount or amounts that the Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall
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be conclusive absent manifest error. The Borrower shall pay the Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.
Section 4.4Mitigation Obligations; Designation of Lending Office. If the Lender requests compensation under Section 4.1, or requires any Loan Party to pay any Indemnified Taxes or additional amounts to the Lender or any Governmental Authority for the account of the Lender pursuant to Section 4.2, then the Lender shall (at the request of the Borrower) use reasonable efforts to designate a different lending office for funding or booking its Revolving Loans hereunder or issuing Letters of Credit or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of the Lender such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 4.1 or Section 4.2, as the case may be, in the future, and (ii) would not subject the Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to the Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by the Lender in connection with any such designation or assignment.
SECTION 5
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
Each Loan Party hereby makes the following representations and warranties to the Lender, which representations and warranties shall survive the Effective Date and shall continue in full force and effect until the full and final payment, and satisfaction and discharge, of all obligations under this Credit Agreement and the other Loan Documents:
Section 5.1Organization. Each Loan Party and each of its subsidiaries is duly organized or formed, validly existing and, as applicable, in good standing under the laws of the jurisdiction of its incorporation or organization.
Section 5.2Power and Authority. Each Loan Party and each of its subsidiaries has full legal right, power and authority to carry on its present business, to own its property and assets and to execute, deliver and perform this Credit Agreement, the Revolving Note and each other Loan Document to which it is a party. Each Loan Party and each of its subsidiaries is duly qualified or licensed as a foreign business organization authorized to conduct its activities and is in good standing in all jurisdictions in which the character of the properties owned or leased by it or the nature of the activities conducted makes such qualification or licensing necessary, except where the failure to be so qualified or licensed would not be reasonably likely to result in a Material Adverse Effect.
Section 5.3Authorization of Borrowing. All requisite corporate or other organizational action and other actions and approvals (including any governmental or regulatory approvals) have been taken or obtained by each Loan Party to authorize the execution and delivery of this Credit Agreement, the Revolving Note and the other Loan Documents to which it is a party and to authorize the performance and observance of the terms of each.
Section 5.4Agreement Binding; No Conflicts. This Credit Agreement constitutes, and the Revolving Note and each other Loan Document when executed and delivered pursuant hereto will constitute, the legal, valid and binding obligations of each Loan Party party thereto,
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enforceable against it in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws and general equity principles affecting the enforcement of creditors’ rights generally. The execution, delivery and performance of this Credit Agreement, the Revolving Note and each other Loan Document to which any Loan Party is a party and the use of the proceeds of any Revolving Loan or use of any Letters of Credit will not violate or conflict with (a) any provisions of law or any order, rule, directive or regulation of any court or other governmental authority, to the extent applicable to any Loan Party or any of their subsidiaries, in any material respect, (b) the Organizational Documents of any Loan Party or (c), in any material respect, any agreement, document or instrument to which any Loan Party is a party or by which its assets or properties are bound and will not constitute a material default or an event or circumstance that with the giving of notice or the passing of time, or both, would constitute a material default under any such agreement, document or instrument or result in the creation or imposition of any Lien upon any assets or properties of any Loan Party.
Section 5.5Compliance with Law. No Loan Party or any of their subsidiaries is in violation or breach of any law or any regulation, order, writ, injunction or decree of any court or governmental instrumentality, which conflict, breach or violation could reasonably be expected to result in a Material Adverse Effect.
Section 5.6Litigation. There are no pending or, to the best knowledge of any Loan Party, threatened legal actions, suits, claims, investigations or administrative, arbitration or other proceedings against or affecting any Loan Party or any of their subsidiaries (i) that could reasonably be expected to result in a Material Adverse Effect, or (ii) that relate to this Credit Agreement, the Revolving Note or any other Loan Document or any transaction contemplated hereby or thereby.
Section 5.7Other Obligations. No Loan Party or any of their subsidiaries is in default in any respect in the performance, observance or fulfillment of any obligation, covenant or condition in any agreement, document or instrument to which it is a party or by which it is bound where such default could reasonably be expected to have a Material Adverse Effect.
Section 5.8Financial Information. All financial information provided to the Lender by any Loan Party has been prepared using the modified cash basis of accounting (true copies of which have been furnished to the Lender), and fairly presents, consistent with such basis of accounting, the financial position and results of operations for the periods therein indicated of the Parent Company and its subsidiaries. Since December 31, 2024, there has been no event or circumstance that, either individually or in the aggregate, has had, or could reasonably be expected to have, a Material Adverse Effect.
Section 5.9Accuracy of Information. All information heretofore or contemporaneously furnished by or on behalf of any Loan Party to the Lender for purposes of or in connection with this Credit Agreement, any other Loan Document or any transaction contemplated hereby or thereby, is, and all other factual information hereafter furnished by or on behalf of any Loan Party to the Lender will be, taken as a whole in light of the circumstance when made, true and accurate in every material respect on the date as of which such information
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is dated or certified, and such information is not, or shall not be, as the case may be, incomplete by omitting to state any material fact necessary to make such information not materially misleading as of the time when made or delivered, it being understood that any projections, estimates, pro forma information and forecasts are subject to significant contingencies and uncertainties, many of which are beyond the control of the Loan Parties, and no assurances can be given that such projections, estimates, pro forma information and forecasts will be realized.
Section 5.10ERISA Compliance.
(a)Except as could not reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect, (i) each Plan is in compliance with the applicable provisions of ERISA, the Code and other federal or state laws and (ii) each Plan that is intended to be a qualified plan under Section 401(a) of the Code has received a favorable determination letter from the IRS to the effect that the form of such Plan is qualified under Section 401(a) of the Code and the trust related thereto has been determined by the IRS to be exempt from federal income tax under Section 501(a) of the Code, or an application for such a letter is currently being processed by the IRS, and, to the knowledge of any Loan Party, nothing has occurred that would prevent or cause the loss of such tax-qualified status.
(b)There are no pending or, to the knowledge of the any Loan Party, threatened or contemplated claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that, either individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect.
(c)No ERISA Event has occurred, and neither any Loan Party nor any ERISA Affiliate is aware of any fact, event or circumstance that, either individually or in the aggregate, could reasonably be expected to constitute or result in an ERISA Event with respect to any Pension Plan that, either individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect.
(d)The present value of all accrued benefits under each Pension Plan (based on those assumptions used to fund such Pension Plan) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Pension Plan allocable to such accrued benefits by a material amount. As of the most recent valuation date for each Multiemployer Plan, the potential liability of the Loan Parties or any ERISA Affiliate for a complete withdrawal from such Multiemployer Plan (within the meaning of Section 4203 or Section 4205 of ERISA), when aggregated with such potential liability for a complete withdrawal from all Multiemployer Plans, is zero.
(e)To the extent applicable, each Foreign Plan has been maintained in compliance with its terms and with the requirements of any and all applicable requirements of law and has been maintained, where required, in good standing with applicable regulatory authorities, except to the extent that the failure so to comply could not reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect. Neither any Loan Party nor any of their subsidiaries has incurred any material obligation in connection with the
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termination of or withdrawal from any Foreign Plan. The present value of the accrued benefit liabilities (whether or not vested) under each Foreign Plan that is funded, determined as of the end of the most recently ended fiscal year of the Parent Company or any of its subsidiaries, as applicable, on the basis of actuarial assumptions, each of which is reasonable, did not exceed the current value of the property of such Foreign Plan by a material amount, and for each Foreign Plan that is not funded, the obligations of such Foreign Plan are properly accrued.
Section 5.11Sanctions; Anti-Corruption.
(a)No Loan Party or any of their subsidiaries nor, to the knowledge of any Loan Party, any director, officer, employee, agent or Affiliate of any Loan Party or any of their subsidiaries is a Person that is, or is owned or Controlled by Persons that are (i) the subject or target of any sanctions administered or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), the U.S. Department of State, the United Nations Security Council, the European Union, His Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”) or (ii) located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions, including, without limitation, Crimea, Donetsk and Luhansk regions of Ukraine, Cuba, Iran, North Korea, Sudan and Syria.
(b)Each of the Loan Parties, and their subsidiaries and their respective directors, officers and employees and, to the knowledge of the Lon Parties, the agents of the Loan Parties and their subsidiaries, are in compliance with the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”) and any other applicable anti-corruption law, in all material respects. Each of the Loan Parties and their subsidiaries have instituted and maintain policies and procedures designed to ensure continued compliance with applicable Sanctions, the FCPA and any other applicable anti-corruption laws.
Section 5.12Ownership of Properties; Margin Regulations; Solvency; Liens.
(a)Each Loan Party and each of their subsidiaries owns and has good and valid title to, or valid leasehold interests in, all of its material real and personal property, tangible and intangible, of any nature whatsoever, free and clear of all Liens, charges and claims, except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes and except for Permitted Liens
(b)No Loan Party extends or maintains, in the ordinary course of business, credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulations T, U or X of the Board of Governors of the Federal Reserve System) (“Margin Stock”), and no part of any Revolving Loan or Letter of Credit will be used for the purpose, whether immediate, incidental, or ultimate, of buying or carrying any such Margin Stock or maintaining or extending credit to others for such purpose. Following the application of the proceeds of each Revolving Loan or drawing under each Letter of Credit, not more than 25% of the value of the assets (either of the Borrower only or of the Borrower and its subsidiaries on a consolidated basis) will be Margin Stock.
(c)After giving effect to the disbursement of Loans (if any), each Loan Party (a) has capital (including, in the case of the Borrower, the Available Revolving Commitments)
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sufficient to carry on its business; (b) is solvent and able to pay its debts as they become due; and (c) owns assets, the fair valuation of which is greater than the amount of its liabilities on this date (as such liabilities would be set forth on a balance sheet prepared in accordance with Section 6.1 if this date were the end of a calendar quarter).
Section 5.13Group Structure Chart. As of the date of this Credit Agreement, the Group Structure Chart is true, complete and accurate in all material respects.
Section 5.14Investment Company Act. Neither any Loan Party nor any of their subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.
Section 5.15No Default. No Default or Event of Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Credit Agreement or any other Loan Document.
Section 5.16Taxes. Each Loan Party and their subsidiaries have filed all federal, state and other tax returns and reports required to be filed, and have paid all federal, state and other taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except (a) Taxes that are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves are being maintained in accordance with GAAP or (b) to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.
Section 5.17Insurance. Each Loan Party and each of their subsidiaries, (a) maintains, preserves and protects all property that is material to the Loan Party’s and their subsidiaries’ business and (b) maintains in full force and effect fire and other casualty insurance in such amounts and with such companies as is customary for comparable companies.
Section 5.18Environmental Matters. Except with respect to any matters that, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, neither any Revolving Loan party nor any of their subsidiaries (a) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (b) knows of any basis for any permit, license or other approval required under any Environmental Law to be revoked, canceled, limited, terminated, modified, appealed or otherwise challenged, (c) has or could reasonably be expected to become subject to any Environmental Liability, (d) has received notice of any claim, complaint, proceeding, investigation or inquiry with respect to any Environmental Liability (and no such claim, complaint, proceeding, investigation or inquiry is pending or, to the knowledge of the any Loan Party, is threatened or contemplated) or (e) knows of any facts, events or circumstances that could give rise to any basis for any Environmental Liability of any Loan Party or any of their subsidiaries.
Section 5.19Labor Matters. There are no strikes, lockouts or other material labor disputes or grievances against any Loan Party or any of their subsidiaries, or, to any Loan Party’s knowledge, threatened against or affecting any Loan Party or any of their subsidiaries, and no significant unfair labor practice charges or grievances are pending against the any Loan Party or
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any of their subsidiaries, or, to any Loan Party’s knowledge, threatened against any of them before any Governmental Authority. All payments due from any Loan Party or any of their subsidiaries pursuant to the provisions of any collective bargaining agreement have been paid or accrued as a liability on the books of such Loan Party or any such subsidiary, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.
SECTION 6
COVENANTS
COVENANTS
Each Loan Party hereby covenants to the Lender that so long as (i) any amounts owed hereunder or under any other Loan Document remain outstanding, (ii) any Letters of Credit are outstanding or have not expired or been canceled or Cash Collateralized (without any pending drawings), and (iii) the Revolving Loan Commitment has not been permanently reduced to zero (0), each Loan Party shall perform, and/or comply with, the following obligations:
Section 6.1Reporting Requirements. The Borrower will deliver (or cause the Parent Company to deliver) to the Lender:
(a)as soon as available, and in any event within 90 calendar days of the end of each fiscal year of Parent Company, a consolidated balance sheet of the Parent Company and its subsidiaries as at the end of such fiscal year and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, audited and accompanied by a report and opinion of independent public accountants of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards (and shall not be subject to any “going concern” or like qualification, exception or explanatory paragraph or any qualification, exception or explanatory paragraph as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition, results of operations, shareholders’ equity and cash flows of the Parent Company and its subsidiaries on a consolidated basis in accordance with GAAP consistently applied;
(b)as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Parent Company, a consolidated balance sheet of the Parent Company and its subsidiaries as at the end of such fiscal quarter, the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal quarter and for the portion of the Parent Company’s fiscal year then ended, in each case setting forth in comparative form, as applicable, the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, certified by a financial officer of the Parent Company as fairly presenting in all material respects the financial condition, results of operations, shareholders’ equity and cash flows of the Parent Company and its subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject only to normal year-end audit adjustments and the absence of notes;
(c)as soon as available, but in any event no later than 60 days after the beginning of each fiscal year of the Parent Company, forecasts prepared by management of the Parent Company and a summary of material assumptions used to prepare such forecasts, in form
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reasonably satisfactory to the Lender, including projected consolidated balance sheets and statements of income or operations and cash flows of the Parent Company and its subsidiaries on a quarterly basis for such fiscal year; and
(d)concurrently with the delivery of the financial statements referred to in clauses (a) and (b) above, a duly completed certificate, in substantially the form of Exhibit C to this Credit Agreement (a “Compliance Certificate”), signed by an executive officer of Borrower or the Parent Company, on behalf of Borrower, (i) certifying as to whether a Default or Event of Default has occurred and, if a Default or Event of Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto and (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.20 and Section 6.21.
Section 6.2Primary Depositary Relationship. The Loan Parties shall maintain the Primary Depositary Relationship with the Lender and/or its affiliates.
Section 6.3Notices. The Borrower shall promptly (and no later than ten (10) days of obtaining knowledge) of the occurrence of any of the following notify the Lender of the occurrence of any of the following: (a) any investigation by or proceeding in or before any court, arbitrator, governmental authority or administrative body or agency (other than routine inquiries by a governmental agency) which could reasonably be expected to result in a Material Adverse Effect and, upon reasonable request, provide the Lender with all material documents and information furnished by any Loan Party in connection therewith; (b) any litigation or proceeding affecting any Loan Party or any of their subsidiaries (i) where the maximum amount of liability or damages to such Loan Parties and/or their subsidiaries at issue is in excess of $500,000 or (ii) which relates to any Loan Document; (c) the occurrence of any ERISA Event that, either individually or together with any other ERISA Events, could reasonably be expected to have a Material Adverse Effect, and (d) the occurrence of any Default or Event of Default or any other development which could result in a Material Adverse Effect, which notice shall include a statement as to what action the Borrower has taken and/or proposes to take with respect thereto.
Section 6.4Compliance with Laws, Etc. Each Loan Party and each of their subsidiaries shall comply in all material respects with the requirements of all applicable laws, maintain and preserve its corporate existence, rights and privileges and pay and discharge all taxes, assessments and governmental charges or levies upon it or against any of its properties, assets or income prior to the date after which penalties attach for failure to pay, except to the extent that (i) such Loan Party or subsidiary shall be contesting in good faith its obligation to pay such taxes or charges and such Loan Party or subsidiary has adequately reserved for such payments in accordance with applicable accounting principles, or (ii) the failure to pay such taxes shall not result in a Material Adverse Effect.
Section 6.5Other Information; Access to Premises and Records. Each Loan Party will, and will cause each of their subsidiaries to, provide other information regarding the operations, business affairs and financial condition of any Loan Party or their subsidiaries as Lender may reasonably request. Each Loan Party will, and will cause each of their subsidiaries to, also permit Lender from time to time, upon reasonable notice and at reasonable times, to
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examine the books and records of any Loan Party or any of their subsidiaries and to visit any Loan Party’s or any of their subsidiary’s offices.
Section 6.6Maintenance of Properties; Insurance. Each Loan Party will, and will cause each of its subsidiaries to, (a) maintain, preserve and protect all property that is material to the Loan Party’s and their subsidiaries’ business and (b) maintain in full force and effect fire and other casualty insurance in such amounts and with such companies as is customary for comparable companies.
Section 6.7PATRIOT Act Compliance. Each Loan Party will, and will cause each of its subsidiaries to, provide such information and take such actions as are reasonably requested by the Lender in order to assist the Lender in maintaining compliance with the PATRIOT Act or similar laws and the rules and regulations promulgated thereunder, in each case, as the same may be in effect from time to time.
Section 6.8Sanctions; Anti-Corruption Laws.
(a)Each Loan Party will maintain in effect policies and procedures designed to promote compliance by such Loan Party, its subsidiaries, and their respective directors, officers, employees, and agents with applicable Sanctions and with the FCPA and any other applicable anti-corruption laws.
(b)The Borrower will not, directly or indirectly, use the proceeds of the Revolving Loans or use the Letters of Credit, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person, (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of the FCPA or any other applicable anti-corruption law, or (ii)(a) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions, or (b) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Revolving Loans, whether as Lender, underwriter, advisor, investor, or otherwise).
Section 6.9Payment of Taxes and Other Lawful Claims. Each Loan Party will, and will cause each of its subsidiaries to, duly pay and discharge promptly when due all taxes, fees, assessments and governmental charges or levies imposed upon it or upon its income or property, in each case before the same becomes delinquent and penalties accrue thereon, as well as all lawful claims for labor, materials and supplies or otherwise which, if unpaid, might give rise to liens upon any Loan Party’s or any of their subsidiaries’ properties (other than Permitted Liens) except to the extent that (a) payment of the foregoing is contested in good faith and such Loan Party or subsidiary has adequately reserved for such payments consistent with past practice, in accordance with accounting principles applied by the Parent Company historically and consistent with financial statements delivered to the Lender hereunder and (b) such failure will not have a Material Adverse Effect.
Section 6.10Reserved.
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Section 6.11Further Assurances. Each Loan Party shall, at the Lender’s reasonable request and at the sole cost of the Borrower, execute and deliver such further instruments and documents, and take such other acts and deeds as the Lender may reasonably require from time to time out the intention or facilitate the performance of the terms of this Credit Agreement and any other Loan Document.
Section 6.12Indebtedness. No Loan Party will, nor will it permit any of its subsidiaries to, create, incur, assume or have outstanding any indebtedness for borrowed money except:
(a)indebtedness under the Loan Documents;
(b)unsecured indebtedness for borrowed money not in excess of $500,000 in the aggregate;
(c)indebtedness for borrowed money not in excess of $500,000 (in addition to the unsecured indebtedness permitted under clause (b) above) in the aggregate, which may be borrowed on a secured or unsecured basis, as long as any lien granted with respect thereto is a Permitted Lien;
(d)intercompany indebtedness among Loan Parties and their subsidiaries, provided such indebtedness is subordinated to the obligations under the Loan Documents on terms reasonably satisfactory to the Lender;
(e)indebtedness outstanding on the Effective Date and listed on Schedule 6.12 to this Credit Agreement and any refinancing, renewal, or extension thereof, provided the principal amount is not increased and the terms are not materially less favorable to the Loan Parties;
(f)indebtedness in respect of letters of credit, bank guarantees, performance bonds or similar instruments issued in the ordinary course of business and not in excess of $500,000 in the aggregate;
(g)obligations under hedging agreements entered into in the ordinary course of business and not for speculative purposes;
(h)accounts payable and other accrued liabilities incurred in the ordinary course of business;
(i)indebtedness incurred in connection with capital leases and purchase money obligations incurred to finance the acquisition, purchase, construction, improvement or remodel of a fixed or capital asset and any refinancing, renewal, or extension thereof (provided the principal amount is not increased and the terms are not materially less favorable to the Loan Parties and not in excess of $500,000 in the aggregate);
(j)indebtedness consisting of indemnification obligations, earn-outs, holdbacks or other deferred purchase price obligations incurred in connection with Permitted Acquisitions or permitted Dispositions and not in excess of $500,000 in the aggregate;
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(k)indebtedness incurred to finance insurance premiums in the ordinary course of business and payable within one (1) year;
(l)indebtedness in respect of corporate credit cards, purchasing cards, or similar arrangements;
(m)indebtedness arising from customary cash management, netting, overdraft, and similar arrangements in the ordinary course of business; and
(n)indebtedness in respect of judgments or awards not constituting an Event of Default and for which enforcement is effectively stayed and the claims are being contested in good faith.
Section 6.13Liens. No Loan Party will, nor will it permit any of its subsidiaries to, create or permit to be created or allow to exist any mortgage, pledge, encumbrance or other lien upon or security interest in any property or assets now owned or hereafter acquired by such Loan Party or subsidiary, except Permitted Liens.
Section 6.14Dispositions. No Loan Party will, nor will it permit any of its subsidiaries to, make any Disposition or enter into any agreement to make any Disposition, except:
(a)Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;
(b)Dispositions of inventory and investments in the ordinary course of business (other than equity interests of subsidiaries, lines of business, real property or intellectual property);
(c)Dispositions of assets (other than equity interests of subsidiaries, lines of business, real property or intellectual property) to the extent that such assets are exchanged for other assets comparable or superior as to type, value and quality;
(d)Dispositions of property by (i) any Loan Party to another Loan Party, or (ii) any subsidiary of a Loan Party (which is not itself a Loan Party) to a Loan Party or to another subsidiary of a Loan Party;
(e)Restricted Payments permitted by Section 6.15 and Investments permitted by Section 6.16;
(f)Dispositions of property as a result of a casualty event involving such property or any Disposition of real property to a Governmental Authority as a result of a condemnation of such real property;
(g)Dispositions of cash or Cash Equivalents; and
(h)Dispositions that constitute Permitted Licenses.
Section 6.15Restricted Payments. No Loan Party will, nor will it permit any of its subsidiaries to, declare or make, directly or indirectly, any Restricted Payment, or incur any
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obligation (contingent or otherwise) to do so, except that, so long as no Default or Event of Default shall have occurred and be continuing at the time of any action described below or would result therefrom:
(a)each subsidiary of the Borrower may make Restricted Payments to the Borrower and any other Person that owns an equity interest in such subsidiary, ratably according to their respective holdings of such equity interests in respect of which such Restricted Payment is being made;
(b)the Borrower and each of its subsidiaries may declare and make dividend payments or other distributions payable solely in common equity interests of such Person;
(c)the Borrower and each of its subsidiaries may purchase, redeem or otherwise acquire equity interests issued by it with the proceeds received from the substantially concurrent issue of new common equity interests;
(d)the Borrower and its subsidiaries may make distributions to the Parent Company (i) in an amount sufficient to pay franchise taxes and other fees required to maintain the legal existence of the Loan Parties and their subsidiaries to the extent actually used by the Parent Company to pay such taxes, costs and expenses, and (ii) as and when necessary for the purpose of providing the Parent Company with funds to pay income taxes imposed on the Parent Company’s distributive share of Borrower’s and its subsidiaries’ taxable income, taking into account in the determination of the amount of such income taxes all deductions and loss carry-forwards relating to Borrower and its subsidiaries available to the Parent Company and all other deductions and credits available to the Parent Company; and
(e)the Borrower and the Parent Company may (i) declare or pay cash dividends to its shareholders and (ii) purchase, redeem or otherwise acquire for cash its equity interests, if, in each case, after giving effect thereto, the Parent Company and its subsidiaries have at least $10,000,000 in Liquidity.
Section 6.16Investments. No Loan Party will, and will not permit any of its subsidiaries to, make any Investments, except:
(a)Investments held by a Loan Party or such subsidiary in the form of Cash Equivalents;
(b)Investments in subsidiaries in existence on the Effective Date, and any refinancing, refunding, renewal or extension of any such Investment that does not increase the amount thereof;
(c)Investments of the Borrower or any Loan Party in another Loan Party and Investments of any subsidiary of the Borrower which is not a Loan Party in the Borrower or in another subsidiary of the Borrower;
(d)Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of
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business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;
(e)Investments consisting of the indorsement by the Borrower or any of its subsidiaries of negotiable instruments payable to such Person for deposit or collection in the ordinary course of business;
(f)to the extent constituting an Investment, transactions otherwise permitted by Section 6.12, Section 6.15 and Section 6.17;
(g)Investments in deposit accounts, securities accounts, or other cash management arrangements in the ordinary course of business;
(h)Investments existing on the Effective Date and set forth on Schedule 6.16 and any modification, renewal, or extension thereof, provided that the amount of any such Investment is not increased except as otherwise permitted by this Section 6.16;
(i)Investments made in connection with Permitted Acquisitions; and
(j)additional Investments not otherwise permitted by this Section 6.16 in an aggregate amount not to exceed $1,000,000 in any fiscal year.
Section 6.17Merger, Consolidation, etc. No Loan Party will, nor will it permit any of its subsidiaries to, acquire, merge, consolidate or amalgamate with or into any other Person or entity, except that, if no Default or Event of Default shall have occurred and be continuing or will result therefore, (a) any subsidiary of the Borrower may merge with (i) a Loan Party, provided that a Loan Party shall be the continuing or surviving Person, or (ii) any one or more other subsidiaries (other than a Loan Party), provided that when any Wholly-Owned Subsidiary is merging with another subsidiary, a Wholly-Owned Subsidiary shall be the continuing or surviving Person, and (b) the Borrower may merge with any of its subsidiaries; provided that the Borrower shall be the continuing of surviving Person.
Section 6.18Wholly-Owned Subsidiaries. In the event that, subsequent to the Effective Date, any Person becomes a Wholly-Owned Subsidiary, whether pursuant to formation, acquisition or otherwise (a) the Borrower shall promptly notify the Lender thereof and (ii) within thirty (30) days after such Person becomes a Wholly-Owned Subsidiary (or such later date as may be approved by the Lender), the Borrower shall cause such subsidiary to (w) become a Guarantor by executing and delivering to the Lender a supplement or joinder to the Guaranty in form and substance reasonably satisfactory to the Lender, (x) become a party to the Security Agreement by executing and delivering to the Lender a supplement or joinder to the Security Agreement in form and substance reasonably satisfactory to the Lender, (y) become a party to this Credit Agreement by executing and delivering to the Lender a supplement or joinder to this Credit Agreement in form and substance reasonably satisfactory to the Lender and (z) deliver all such other documentation (including certified organizational documents, resolutions, lien searches and legal opinions) and to take all such other actions as the Lender shall reasonably request. Notwithstanding the foregoing, (i) no Immaterial Subsidiary shall be required to become a Guarantor or otherwise join the Loan Documents, and (ii) no Foreign Subsidiary shall
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be required to become a Guarantor or otherwise join the Loan Documents to the extent that (a) such action would result in material adverse tax consequences to the Borrower or any of its Affiliates (as reasonably determined by the Borrower and certified to the Lender), (b) such action is prohibited by applicable law, regulation, or contractual obligation (not entered into in contemplation of this Credit Agreement), or (c) the cost or burden of such action would be excessive in relation to the benefit afforded to the Lender (as reasonably determined by the Borrower and the Lender).
Section 6.19Nature of Business. The Loan Parties will not, and will not permit any of their subsidiaries to, engage to any material extent in any business other than those businesses conducted by the Borrower and its subsidiaries on the date hereof or any business reasonably related or incidental thereto or representing a reasonable expansion thereof.
Section 6.20Consolidated Leverage Ratio. The Borrower will not permit the Consolidated Leverage Ratio as of the last day of any fiscal quarter of the Parent Company to be greater than 3.00:1.00.
Section 6.21Consolidated Interest Coverage Ratio. The Borrower will not permit the Consolidated Interest Coverage Ratio as of the last day of any fiscal quarter of the Parent Company to be less than 3.00:1.00.
SECTION 7
CONDITIONS
CONDITIONS
Section 7.1Conditions Precedent to the Effectiveness of Credit Agreement. The effectiveness of this Credit Agreement and the commitment of the Lender to make Credit Extensions are each subject to the prior fulfillment or waiver of the following conditions:
(a)The Lender shall have received the following, each in form and substance satisfactory to the Lender:
(i)Executed Credit Agreement. This Credit Agreement, duly executed by an authorized officer of each Loan Party.
(ii)Revolving Note. The Revolving Note, duly executed by an authorized officer of Borrower.
(iii)Security Agreement. The Security Agreement, duly executed by an authorized officer of each Loan Party.
(iv)Officer’s Certificate. Certificate of a responsible officer of each Loan Party dated the Effective Date certifying (x) that attached thereto is a true, complete and correct copy of the Organizational Documents of each Loan Party (including recent good standing certificates) and the Group Structure Chart as in effect on the date of such certification, (y) as to the incumbency and genuineness of the signature of each officer or other authorized signatory of each Loan Party executing any of the Loan Documents;
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(v)Closing Certificate. Closing certificate signed by a responsible officer of the Borrower, dated the Effective Date, certifying that (x) the representations and warranties set forth in SECTION 5 and in the other Loan Documents are true and correct on and as of such date (except to the extent such representations and warranties refer to an earlier date, in which case such certification shall be that such representations and warranties are true and correct in all material respects on and as of such earlier date), (y) each Loan Party is on such date in compliance with all the terms and provisions set forth in this Credit Agreement and the other Loan Documents and (z) on such date no Default, Event of Default or Material Adverse Effect has occurred and is continuing or would result from the Credit Agreement and other Loan Documents becoming effective in accordance with their respective terms.
(vi)Legal Opinion. A favorable written opinion (addressed to the Lender and dated the Effective Date) of counsel for the Loan Parties in form and substance reasonably satisfactory to the Lender and covering such matters relating to the Loan Parties, this Credit Agreement or the Loan Documents as the Lender shall reasonably request.
(vii)Lien Searches. Copies of Uniform Commercial Code search reports requested by the Lender, together with filed copies of financing statements reported therein, as well as copies of such tax, litigation, judgment, bankruptcy, intellectual property and any other search reports as the Lender reasonably requests.
(viii)Other Documents. Such other documents, instruments and agreements as the Lender shall reasonably request in connection with the foregoing matters.
(b)Representations and Warranties. Each of the representations and warranties contained herein, in the Security Agreement, in each other Loan Document and in each certificate and other writing delivered to the Lender pursuant hereto or thereto on or prior to the Effective Date shall be true and correct as though made on and as of such date (except to the extent such representations and warranties refer to an earlier date, in which case such representations and warranties shall be true and correct in all material respects on and as of such earlier date).
(c)Defaults. No Default or Event of Default shall have occurred and be continuing on the Effective Date.
(d)Material Adverse Effect. Since December 31, 2024, there has been no event or circumstance that, either individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect.
(e)KYC Information. Upon the reasonable request of the Lender made at least ten (10) days prior to the Effective Date, each Loan Party shall have provided to such Lender (i) the documentation and other information so requested in connection with applicable “know your customer” and anti-money-laundering rules and regulations, including the PATRIOT Act, in each case at least five days prior to the Effective Date, and (ii) a Beneficial Ownership Certification in relation to each Loan Party and each of their subsidiaries that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation.
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(f)Financial Statements. The Borrower shall have delivered to the Lender the audited consolidated balance sheet of the Parent Company and its subsidiaries for the fiscal year ended December 31, 2024 and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Parent Company and its subsidiaries.
(g)Fees and Expenses. The Lender shall have received all of the fees, costs and expenses (including the reasonable and documented fees and expenses of counsel to the Lender) that are then due and payable hereunder and under the other Loan Documents.
(h)Depositary Relationship. The Loan Parties shall have established a Primary Depositary Relationship with the Lender and/or its Affiliates.
Section 7.2Conditions Precedent to each Credit Extension. The obligation of the Lender to make Credit Extensions shall, in addition to the fulfillment of the conditions set forth in Section 7.1 above, be subject to the following:
(a)Notice of Borrowing/Application. The Lender shall have received a Notice of Borrowing or an Application, as applicable, duly executed by an authorized officer of the Borrower as required under Section 2.2 or Section 3.2, as applicable. Each Notice of Borrowing and Application delivered by the Borrower hereunder and each Credit Extension shall be deemed to constitute a representation and warranty by each Loan Party on and as of the date of the applicable Credit Extension as to the matters specified in clauses (b) and (c) below in this Section.
(b)Representations and Warranties. Each of the representations and warranties contained herein, in each other Loan Document and in each certificate and other writing delivered to the Lender pursuant hereto or thereto on or prior to the date of such Credit Extension shall be true and correct in all material respects as though made on and as of such date (except to the extent such representations and warranties refer to an earlier date, in which case such representations and warranties shall be true and correct in all material respects on and as of such earlier date).
(c)Defaults. No Default, Event of Default or Material Adverse Effect shall have occurred and be continuing on the date of such Credit Extension or would result from making of such Credit Extension.
(d)Other Items. The Lender shall have received such other agreements, instruments, approvals, opinions and documents as the Lender may reasonably request prior to the date of any proposed Credit Extension.
(e)Available Revolving Commitment. After giving effect to such Credit Extension, the aggregate amount of all Revolving Loans and L/C Exposure does not exceed the Available Revolving Commitment at such time.
SECTION 8
EVENTS OF DEFAULT
EVENTS OF DEFAULT
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Section 8.1Events of Default. Each of the following events and occurrences shall constitute an “Event of Default” under this Credit Agreement:
(a)The Borrower shall fail to pay any principal of any Revolving Loan when the same becomes due and payable;
(b)Any Loan Party shall fail to pay any interest on any Revolving Loan, any fee under any of the Loan Documents or any other obligation arising under any Loan Document or any other note, instrument or agreement evidencing any indebtedness of any Loan Party to the Lender (other than those amounts referred to in the preceding clause (a)) and such non-payment continues for a period of three (3) Business Days after the due date therefor;
(c)Any representation or warranty made by any Loan Party in this Credit Agreement, any Loan Document or any certificate, report or other document delivered to the Lender pursuant to any Loan Document shall have been incorrect or misleading in any material respect when made or confirmed;
(d)(i) Any Loan Party fails to perform or observe any covenant contained in Section 6.2, Section 6.3(d), Section 6.8, or Section 6.12 through Section 6.21 or (ii) any Loan Party fails to perform or observe any other term, covenant or agreement contained in this Credit Agreement or any other Loan Document if such failure remains unremedied for thirty (30) days after written notice thereof has been given to any Loan Party by the Lender; or
(e)(i) Any Loan Party or any of their subsidiaries fails to pay any principal of or premium or interest on any indebtedness for borrowed money that is outstanding in a principal or notional amount of at least $500,000 in the aggregate when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure continues after the applicable grace period, if any, specified in the agreement or instrument relating to such indebtedness, (ii) any other event shall occur or condition exists under any agreement or instrument relating to any such indebtedness, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such indebtedness or (iii) any such indebtedness is declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or defease such indebtedness is required to be made, in each case prior to the stated maturity thereof; or
(f)an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of any Loan Party or any of their subsidiaries or any its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or any of their subsidiaries or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;
(g)any Loan Party or any of their subsidiaries shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any
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Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in Section 8.1(f), (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or any of their subsidiaries or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;
(h)any Loan Party or any of their subsidiaries shall fail to pay, or admit in writing its inability to pay, its debts generally as they become due;
(i)any final judgment or order for the payment of money in excess of $1,000,000 is rendered against any Loan Party or any of their subsidiaries (to the extent not indemnified by third parties or covered by independent third party insurance) and either (i) enforcement proceedings have been commenced by any creditor upon such judgment or order or (ii) there is any period of thirty (30) consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, is not in effect, unless, in each case, such judgment or order has been paid, vacated, discharged or bonded pending appeal within thirty (30) days from the entry thereof;
(j)a Change of Control shall occur;
(k)an ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan that has resulted or could reasonably be expected to result in liability of any Loan Party under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount that could reasonably be expected to have a Material Adverse Effect;
(l)the validity or enforceability of this Credit Agreement or any other Loan Document shall be contested by or on behalf of any Loan Party, (ii) a proceeding shall be commenced by a governmental agency or authority having jurisdiction over any Loan Party seeking to establish the invalidity thereof or (iii) any Loan Party shall deny that it has any further liability or obligation under any Loan Document to which it is a party; or
(m)Any Collateral Document shall for any reason (other than pursuant to the terms thereof or any act or omission of Lender or its Affiliates) cease to create a valid and perfected first-priority Lien (subjected to Permitted Liens) on the Collateral purposed to be covered thereby.
Section 8.2Consequence of Default. Upon the occurrence of any Event of Default (i) described in Section 8.1(f) or (g) in respect of any Loan Party, the outstanding amount of the Revolving Loan Commitment shall automatically be reduced to zero (0), and all Obligations, including the outstanding amount of all Revolving Loans and all other amounts payable hereunder, under the Revolving Note and under any other Loan Document, shall automatically become immediately due and payable, and the obligation of the Borrower to Cash Collateralize as provided in clause (ii)(B) below shall automatically become effective, in each case without presentment, demand, protest or other requirement of any kind, all of which are hereby expressly
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waived by the Loan Parties, or (ii) described in any other subsection of Section 8.1 or in Section 8.1(f) or (g) in respect of subsidiary of a Loan Party that is not itself a Loan Party, and during the continuance thereof, the Lender may, by notice of default given to any Loan Party, exercise any or all of the following rights and remedies, in addition to any other rights and remedies available under the Loan Documents, at law, or in equity:
(a) terminate the Revolving Loan Commitments and declare all Obligations, including the entire outstanding principal amount of all Revolving Loans and all other amounts payable hereunder, under the Revolving Note and under any other Loan Document to be immediately due and payable, whereupon the Revolving Loan Commitments shall be terminated and all Obligations, including the unpaid principal amount of all Revolving Loans, together with accrued interest thereon, and all such other amounts, shall be immediately due and payable, without presentment, protest, demand or other requirement of any kind, each of which is hereby expressly waived by the Loan Parties;
(b) require the Loan Parties to Cash Collateralize, on demand, (i) an amount equal to one hundred five percent (105%) of the aggregate undrawn and unexpired amount of all outstanding Letters of Credit (plus all related interest, fees, and costs as estimated by the Lender), to secure all Obligations relating to such Letters of Credit, and (ii) all Obligations in respect of Cash Management Services then outstanding;
(c) require the Borrower to pay in advance all letter of credit fees scheduled to be paid or payable over the remaining term of any outstanding Letters of Credit:
(d) apply any amounts so Cash Collateralized to the payment of drafts drawn under such Letters of Credit, with any unused portion after all such Letters of Credit have expired or been fully drawn to be applied to other Obligations in the discretion of the Lender;
(e) terminate any outstanding Cash Management Agreements and declare all related Obligations thereunder immediately due and payable;
(f) take possession of, collect, sell, or otherwise realize upon any Collateral, including the right to enter premises where Collateral is located, assemble Collateral, and use the Loan Parties' intellectual property and licenses as necessary to complete, advertise, and sell Collateral; and
(g) place a hold on, or apply, any balances or deposits of the Loan Parties held by the Lender to the Obligations.
Section 8.3Cure Right. In the event that Loan Parties fail to comply with any financial covenant contained in Section 6.20 or Section 6.21 (a “Financial Covenant Default”), the Borrower shall have the right to cure such Event of Default on the following terms and conditions (the “Equity Cure Right”):
(a)In the event the Borrower desires to cure a Financial Covenant Default, the Borrower shall deliver to the Lender irrevocable written notice of its intent to cure (a “Cure Notice”) no later than ten (10) Business Days after the date on which financial statements and a
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Compliance Certificate as of and for the period ending on the last day of the fiscal quarter as of which such Financial Covenant Default occurred (the “Testing Date”) are required to be delivered; provided, however, that in no event shall the Borrower be permitted to exercise Equity Cure Rights hereunder (x) more than three (3) times during the term of this Credit Agreement or (y) more than once during any four (4) consecutive fiscal quarters.
(b)In the event the Borrower delivers a Cure Notice, there shall be purchased on or after the Testing Date the common equity interests (or such other equity interests on terms reasonably acceptable to the Lender) of (or cash capital contributions on or after the Testing Date to) the Parent Company the proceeds of which are then contributed to the capital of the Borrower (“Equity Cure Securities”) for cash consideration in an amount equal to (but not greater than) the amount needed to cure the applicable Financial Covenant Default (the “Financial Covenant Cure Amount”) no later than ten (10) Business Days after the date on which financial statements and a Compliance Certificate as of and for the period ending on the applicable Testing Date are required to be delivered (the “Required Contribution Date”). Such Financial Covenant Cure Amount received by the Parent Company shall be included in the calculation of Consolidated EBITDA solely for the purposes of determining compliance with the financial covenants in Section 6.20 or Section 6.21, as applicable, at the end of the fiscal quarter in which such Financial Covenant Default occurred and any subsequent period that includes such fiscal quarter but shall be disregarded for purposes of the calculation of Consolidated EBITDA for all other purposes.
(c)If a Cure Notice has been delivered, then from and after the Testing Date related to such Cure Notice until the earlier to occur of the Required Contribution Date and the date on which the Lender is notified that the required contribution will not be made, the Event of Default on the basis of the applicable Financial Covenant Default in respect of which the Cure Notice was delivered (and any Default or Event of Default resulting solely from the failure to give notice of the Event of Default arising as a result of the Financial Covenant Default) shall be deemed to no longer exist and the Lender shall not impose default interest, accelerate the Loan Parties’ obligations hereunder, terminate the Revolving Loan Commitments or exercise any enforcement remedy against the Parent Company, the Borrowers, any of the other subsidiaries of the Parent Company or any of their respective properties solely as a result of the Financial Covenant Default that has been identified in the Cure Notice delivered in accordance with the terms hereof; provided that until timely receipt of the Financial Covenant Cure Amount, an Event of Default shall be deemed to exist for all other purposes of this Credit Agreement, including, without limitation, SECTION 7 hereof; provided further, that if the Financial Covenant Cure Amount is not received by the Required Contribution Date, then the applicable Financial Covenant Default shall be deemed to have existed on and as of the last day of the applicable fiscal quarter for which the Financial Covenant Default shall have occurred.
(d)Upon timely receipt by the Parent Company in cash of the Financial Covenant Cure Amount, the Financial Covenant Default (and any Default or Event of Default resulting solely therefrom) shall be deemed cured and shall be deemed to no longer exist.
(e)To the extent a Testing Date in respect of which a Financial Covenant Cure Amount for a Financial Covenant Default is received is included in the calculation of
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Consolidated EBITDA for a subsequent fiscal period, Consolidated EBITDA for such period shall be deemed permanently increased by such amount for purposes of calculating Consolidated EBITDA for such subsequent period; provided, that the Financial Covenant Cure Amount shall be included in the calculation of Consolidated EBITDA solely for the purpose of determining compliance with the financial covenant or covenants giving rise to the Financial Covenant Default and not for any other purposes.
SECTION 9
EXPENSES; INDEMNITY; DAMAGE WAIVER
EXPENSES; INDEMNITY; DAMAGE WAIVER
Section 9.1Costs and Expenses. The Borrower shall pay (i) all reasonable, documented, out-of-pocket expenses incurred by the Lender and its Affiliates (including the reasonable and documented fees charges and disbursements of their counsel) in connection with the preparation, negotiation, execution, delivery and administration of this Credit Agreement and the other Loan Documents, or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable, documented, out of pocket expenses incurred by the Lender in connection with the issuance, amendment, extension, reinstatement or renewal of any Letter of Credit or any demand for payment thereunder, and (iii) all documented, out-of-pocket expenses incurred by the Lender and its Affiliates (including the documented fees, charges and disbursements of their counsel) in connection with the enforcement or protection of their rights (a) in connection with this Credit Agreement and the other Loan Documents, including their rights under this SECTION 9, or (b) in connection with the Revolving Loans made or Letters of Credit issued, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Revolving Loans or Letters of Credit.
Section 9.2Indemnification by the Borrower. The Borrower shall indemnify the Lender and its Related Parties (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related reasonable and documented expenses (including the reasonable and documented fees, charges and disbursements of any counsel for any Indemnitee) incurred by any Indemnitee or asserted against any Indemnitee by any Person (including any Loan Party or any of their subsidiaries) other than such Indemnitee and its Related Parties arising out of, in connection with, or as a result of (i) the execution or delivery of this Credit Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Revolving Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by any Loan Party or their subsidiaries, or any environmental liability related in any way to any Loan Party or their subsidiaries or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by any Loan Party or their subsidiaries, and regardless of whether any Indemnitee is a party thereto; provided that, such indemnity shall not, as to any
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Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. This Section 9.2 shall not apply with respect to Taxes other than any Taxes that represent losses, claims or damages arising from any non-Tax claim.
Section 9.3Waiver of Consequential Damages; Unintended Recipients. To the fullest extent permitted by applicable law, the Loan Parties shall not assert, and hereby waive, any claim against any Indemnitee on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Credit Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Revolving Loan or Letter of Credit, or the use of the proceeds thereof. No Indemnitee referred to in Section 9.2 shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Credit Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.
Section 9.4Payments. All amounts due under this SECTION 9 shall be payable within three (3) Business Days of demand therefor.
Section 9.5Survival. Each party’s obligations under this SECTION 9 shall survive the termination of the Loan Documents and payment of the obligations hereunder.
SECTION 10
MISCELLANEOUS
MISCELLANEOUS
Section 10.1Entire Agreement. This Credit Agreement and the documents referred to herein constitute the entire obligation of the parties with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to the transactions herein and therein contemplated.
Section 10.2No Waiver; Cumulative Rights. The failure or delay of the Lender to require performance by any Loan Party of any provision of this Credit Agreement or any other Loan Document shall not operate as a waiver thereof, nor shall it affect the Lender’s rights to require performance of such provision at any time thereafter, nor shall it affect or impair any of the remedies, powers or rights of the Lender with respect to any other or subsequent failure, delay or default. Each and every right granted to the Lender hereunder or under any other document or instrument delivered hereunder or in connection herewith shall be cumulative and may be exercised at any time.
Section 10.3Assignment; Binding Effect.
(a)The provisions of this Credit Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Loan Parties may not assign or otherwise transfer any of their respective rights or obligations hereunder without the prior written consent of the Lender (and any attempted assignment or transfer by any Loan Party without such consent shall be null and void). Nothing in this Credit Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the
55
extent expressly contemplated hereby, the Related Parties of the Lender) any legal or equitable right, remedy or claim under or by reason of this Credit Agreement.
(b)The Lender may, at any time, assign to one or more Eligible Assignees (as defined below) all or a portion of its rights and obligations under this Credit Agreement and the other Loan Documents (including all or a portion of the Revolving Loan Commitment and the Revolving Loans at the time owing to it); provided, however, that if at such time no Event of Default is continuing, the Lender shall obtain the prior written consent of the Borrower with respect to each such assignment (such consent not to be unreasonably delayed or withheld); provided further that (i) no such consent of the Borrower shall be required if the assignment is to an Affiliate of the Lender, and (ii) the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Lender within five (5) Business Days after having received notice thereof. For purposes of this Credit Agreement, “Eligible Assignee” shall mean any Person (other than a natural Person) that is (i) an Affiliate of the Lender or (ii) a commercial bank, insurance company or investment or mutual fund. Subject to notification to the Borrower of an assignment, the assignee shall be a party hereto and, to the extent of the interest assigned, have the rights and obligations of the existing Lender under this Credit Agreement, and the existing Lender shall, to the extent of the interest assigned, be released from its obligations under this Credit Agreement (and, in the case of an assignment covering all of the existing Lender’s rights and obligations under this Credit Agreement, the existing Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 9.1 and Section 9.2 and, with respect to facts and circumstances occurring prior to the effective date of such assignment, Section 4.2). The Loan Parties hereby agree to execute any amendment and/or any other document that may be necessary to effectuate such an assignment, including an amendment to this Credit Agreement and the other Loan Documents to provide for multiple lenders and an administrative agent to act on behalf of such lenders. Any assignment or transfer by the Lender of rights or obligations under this Credit Agreement and the other Loan Documents that does not comply with this Section 10.3(b) shall be treated for purposes of this Credit Agreement as a sale by the Lender of a participation in such rights and obligations in accordance with Section 10.3(c).
(c)The Lender may, at any time, without the consent of any Loan Party, sell participations to one or more banks or other entities (each, a “Participant”) in all or a portion of the Lender’s rights and obligations under this Credit Agreement (including all or a portion of the Revolving Loan Commitment and the Revolving Loans owing to it); provided that, (i) the Lender’s obligations under this Credit Agreement shall remain unchanged, (ii) the Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the Loan Parties shall continue to deal solely and directly with the Lender in connection with the Lender’s rights and obligations under this Credit Agreement, and (iv) such Participant is subject to the same confidentiality obligations in favor of the Loan Parties as is Lender. Each Loan Party agrees that each Participant shall be entitled to the benefits of Section 4.1 and Section 4.2 to the same extent as if it were the Lender and had acquired its interest by assignment pursuant to Section 10.3(b); provided that, such Participant (A) agrees to be subject to the provisions of Section 4.1 and Section 4.2 as if it were an assignee under Section 10.3(b) (it being understood that the documentation required under Section 4.2(f) shall be delivered to the participating Lender) and (B) shall not be entitled to receive any greater payment under Section 4.1 and Section 4.2 with respect to any participation, than the Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. The Lender shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Revolving Loans or other obligations under the Loan Documents (the “Participant Register”); provided that, the Lender shall have no obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or
56
any information relating to a Participant’s interest in the Revolving Loan Commitment, the Revolving Loans or other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that the Revolving Loan Commitment, any Revolving Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and the Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Credit Agreement notwithstanding any notice to the contrary.
(d)The Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Credit Agreement to secure its obligations, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that, no such pledge or assignment shall release the Lender from any of its obligations hereunder or substitute any such pledgee or assignee for the Lender as a party hereto.
Section 10.4Governing Law; Jurisdiction; Consent to Service of Process.
(a)This Credit Agreement and the other Loan Documents and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Credit Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to conflicts of laws principles.
(b)Each Loan Party irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind whatsoever, whether in law or equity, or whether in contract or tort or otherwise, against the Lender or any of its Related Parties in any way relating to this Credit Agreement or any other Loan Document or the transactions contemplated hereby or thereby, in any forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof (collectively, “New York Courts”), and each Loan Party irrevocably and unconditionally submits to the exclusive jurisdiction of such courts and agrees that any such action, litigation or proceeding may be brought in any such New York State court or, to the fullest extent permitted by applicable law, in such federal court. Each of the parties hereto agrees that a final and non-appealable judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing herein or in any other Loan Document shall affect any right that the Lender may otherwise have to bring any action or proceeding relating to this Credit Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.
(c)Each Loan Party irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Credit Agreement or any other Loan Document in New York Court or any court located in a jurisdiction where any Loan Party has an office. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any New York Court or any court located in a jurisdiction where any Loan Party has an office.
(d)Each Loan Party irrevocably consents to the service of process in the manner provided for notices in Section 10.6 and agrees that nothing herein will affect the right of any party hereto to serve process in any other manner permitted by applicable law.
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Section 10.5Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY. EACH PARTY HERETO (A) CERTIFIES THAT NO AGENT, ATTORNEY, REPRESENTATIVE OR ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF LITIGATION, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 10.6Notices. Any notice hereunder shall be in writing and shall be personally delivered, transmitted by postage prepaid registered mail or by overnight mail, or transmitted by telephonic facsimile or electronic mail to the parties as follows (provided, however, that with respect to any notices to be delivered to any Loan Party, any notice delivered by telephonic facsimile or electronic mail must also be delivered by personal delivery, by postage prepaid registered mail or by overnight mail):
To the Loan Parties: CuriosityStream Inc.
8484 Georgia Ave., Suite 700
Silver Spring, MD 20910
Silver Spring, MD 20910
Attention: Brady Hayden, Chief Financial Officer
Telephone: 301-755-2055
Email: brady.hayden@curiositystream.com
To the Lender: Citibank, N.A.
1 Market St, Floor 41
San Francisco, CA 94105
Attn: Damián Bayona, Senior Vice President
Telephone: 415-627-6293
Email: damian.bayona@citi.com
All notices and other communications shall be deemed to have been duly given on (i) the date of receipt if delivered personally, (ii) the date five (5) days after posting if transmitted by regular mail or on the Business Day after having been sent if transmitted by overnight mail with a reputable courier or (iii) the date of transmission if transmitted by telephonic facsimile or electronic mail and receipt confirmed. If two or more delivery methods are used, then the relevant notice or communication will be deemed to have been delivered on the latest applicable date under clauses (i)-(iii) of the foregoing sentence.
Section 10.7Amendments, Etc. No amendment or waiver of any provision of this Credit Agreement and the other Loan Documents, and no consent to any departure by any Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Lender and, in the case of an amendment, the relevant Loan Parties, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.
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Section 10.8Usury. Anything in this Credit Agreement to the contrary notwithstanding, the obligation of the Borrower to pay interest on any Revolving Loan and the Revolving Note shall be subject to the limitation that no payment of such interest shall be required to the extent that receipt of such payment would be contrary to applicable usury laws.
Section 10.9Counterparts. This Credit Agreement may be signed in any number of counterparts. Either a single counterpart or a set of counterparts when signed by all the parties hereto shall constitute a full and original agreement for all purposes.
Section 10.10Severability. Any provision of this Credit Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.
Section 10.11Right of Set-Off. If any Loan Party fails to pay any of its obligations hereunder or under any other Loan Document when due and payable, the Lender and each of its Affiliates is authorized at any time and from time to time, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Lender (or any of its Affiliates) to or for any Loan Party’s credit or account against any and all of the obligations hereunder, whether or not the Lender has made any demand under this Credit Agreement. The Lender will promptly notify the Borrower after any such set-off and application, provided that the failure to give such notice will not affect the validity of such set-off and application. The Lender’s rights under this Section 10.11 are in addition to other rights and remedies (including, without limitation, other rights of set-off) that the Lender may have.
Section 10.12USA PATRIOT Act. The Lender hereby notifies each Loan Party that pursuant to the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “PATRIOT Act”), it is required to obtain, verify, and record information that identifies the Loan Parties, which information includes the name and address of the Loan Parties and other information that will allow the Lender to identify the Loan Parties in accordance with the PATRIOT Act, and each Loan Party agrees to provide such information from time to time to the Lender.
Section 10.13Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of a Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a)the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and
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(b)the effects of any Bail-In Action on any such liability, including, if applicable:
(i)reduction in full or in part or cancellation of any such liability;
(ii)a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Credit Agreement or any other Loan Document; or
(c)the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any applicable Resolution Authority.
Section 10.14Appointment of Lender as Agent. By accepting the benefits of the Collateral and the Guaranty, as applicable, each Secured Party, whether or not a party hereto (including, without limitation, each holder of any Obligations in respect of Cash Management Services then outstanding) shall be deemed to have appointed the Lender (and its successors and assigns) as an agent and collateral agent to act on its behalf pursuant to the Loan Documents. All references to the Lender herein and in each other Loan Document shall, where relevant, be deemed to be a reference to the Lender acting in its capacity as an agent or collateral agent, as applicable, for the benefit of the Secured Parties.
[Remainder of this page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be executed by their duly authorized representatives as of the date first written above.
CURIOSITY INC., as the Borrower
By: /s/ P. Brady Hayden
Name: P. Brady Hayden
Title: Chief Financial Officer
CURIOSITYSTREAM INC., as a Guarantor
By:/s/ P. Brady Hayden
Name: P. Brady Hayden
Title: Chief Financial Officer
[Credit Agreement – Signature Page]
CITIBANK, N.A., as the Lender
By:/s/ Bryant Bedwell
Name: Bryant Bedwell
Title: Director
[Credit Agreement – Signature Page]
SECTION 11 EXHIBIT A
SECTION 12 FORM OF
REVOLVING NOTE
REVOLVING NOTE
Lender: [CITIBANK, N.A.] New York, New York
Principal Amount: $[10,000,000] ___________, ____
Principal Amount: $[10,000,000] ___________, ____
FOR VALUE RECEIVED, the undersigned, CURIOSITY INC., A Delaware corporation (the “Borrower”), hereby promises to pay to the Lender set forth above (the “Lender”) or its registered assigns the Principal Amount set forth above, or, if less, the aggregate unpaid principal amount of the Revolving Loans (as defined in the Credit Agreement referred to below) made by the Lender to the Borrower pursuant to the Credit Agreement, payable at such times and in such amounts, as are specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount of the Revolving Loans from the date made until such principal amount is paid in full, payable at such times and at such interest rates as are specified in the Credit Agreement. Demand, diligence, presentment, protest and notice of non-payment and protest are hereby waived by the Borrower to the extent set forth in the Credit Agreement.
Both principal and interest are payable in Dollars to the Lender in immediately available funds.
This Revolving Note is the “Revolving Note” referred to in, and is entitled to the benefits of, and is subject to all terms, provisions and conditions of the Credit Agreement, dated as of March 12, 2026, among, the Borrower, the Guarantors party thereto from time to time, and the Lender (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein without definition are used as defined in the Credit Agreement. This Revolving Note is a Loan Document and is entitled to the benefits and subject to the limitations provided in respect of Loan Documents.
The Credit Agreement, among other things, contains provisions for acceleration of the maturity of the unpaid principal amount of this Revolving Note upon the happening of certain stated events and also for prepayments on account of the principal hereof plus, interest, fees and expenses prior to the maturity hereof upon the terms and conditions specified therein.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[Signature Page Follows]
A-1
IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be executed and delivered by its duly authorized officer as of the day and year and at the place set forth above.
CURIOSITY INC.
By _______________________
Name:
Title:
A-2
SECTION 13 EXHIBIT B
SECTION 14 FORM OF
NOTICE OF BORROWING
NOTICE OF BORROWING
Citibank, N.A.
1 Market St, Floor 41,
San Francisco, CA 94105
Attn:
Email:
Group Email:
[Date]
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of March 12, 2026 among CURIOSITY INC., a Delaware corporation, as borrower (the “Borrower”), the GUARANTORS party thereto from time to time, and CITIBANK, N.A., as lender (the “Lender”) (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Terms defined in the Credit Agreement are used herein with the same meanings.
This irrevocable notice constitutes a Notice of Borrowing of the Borrower and the Borrower hereby requests Revolving Loans under the Credit Agreement, and in connection therewith the Borrower specifies the following information with respect to such Revolving Loans requested hereby:
(A)Date of borrowing of Revolving Loans (which shall be a Business Day):_________ (the “Borrowing Date”)1
(B)Aggregate amount of Revolving Loans requested: US$____________
(C)Type of Revolving Loans requested (Floating Rate or SOFR Loans): ____________
(D)Interest Period (if a SOFR Loan): [1][3][6] month[s]]2
(E)Location and number of the Borrower’s account to which funds are to be disbursed: __________.3
Borrower hereby certifies that: (i) the representations and warranties set forth in the Credit Agreement and in any other Loan Document shall be true and correct in all material respects (or,
1 The Lender to be delivered a Notice of Borrowing not later than 2:00 P.M., New York time, three (3) Business Days before the date of the proposed Revolving Loan.
2 To be included for a Term SOFR borrowings only
3 To be an account of the Borrower held with Citibank, N.A.
B-B-1
in the case of any such representation or warranty already qualified by materiality, in all respects) on and as of the Borrowing Date referenced above (or, in the case of any such representation or warranty expressly stated to have been made as of a specific date, as of such specific date), and (ii) at the time of and immediately after the Revolving Loan referenced above, no Default or Event of Default shall have occurred and be continuing.
Very truly yours,
CURIOSITY INC.
By _______________________
Name:
Title:
B-2
SECTION 15 EXHIBIT C
SECTION 16 FORM OF
COMPLIANCE CERTIFICATE
COMPLIANCE CERTIFICATE
_______________, 20__
This Compliance Certificate (this “Certificate”) is furnished pursuant to Section 6.1(d) of the Credit Agreement dated as of [●], 2026 among CURIOSITY INC., a Delaware corporation, as borrower (the “Borrower”), the GUARANTORS party thereto from time to time, including CURIOSITYSTREAM, INC., a Delaware corporation (the “Parent Company”), and CITIBANK, N.A., as Lender (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein that are not defined herein shall have the meanings ascribed to them in the Credit Agreement.
The financial statements attached hereto as Schedule I are being furnished to you delivered with and in support of this Certificate in accordance with subsection 6.1(a) and/or 6.1(b) of the Credit Agreement. Such financial statements are complete and correct and fairly presenting, in all material respects, in accordance with GAAP, the financial position and the results of operations of the Parent Company and its subsidiaries as of the dates of and for the periods covered by such financial statements (subject, in the case of interim financial statements, to normal year-end adjustments and the absence of footnote disclosure).
Schedule II attached hereto sets forth financial data and computations evidencing the Borrower’s compliance with Sections 6.20 and 6.21 of the Credit Agreement, all of which data and computations are true, complete and correct as of the date(s) stated therein.
The undersigned is an executive officer of the [Borrower][Parent Company] and has reviewed the terms of the Credit Agreement and hereby certifies that (i) no Default or Event of Default has occurred and is continuing [except as set forth below] and (ii) no material change in GAAP or in the application thereof has occurred since the date of the most recently delivered audited financial statements that would affect the compliance or non-compliance with any financial ratio or requirement in the Credit Agreement [except as set forth below].
[Set forth [below] [in a separate attachment to this Certificate] are [the details of the existing Defaults and/or Events of Default and any action(s) taken or proposed to be taken with respect thereto]4 [the effect(s) of such change in GAAP or the application thereof on the financial statements accompanying this Certificate.]5
[Signature Page Follows]
4 Include bracketed language only if a Default or Event of Default has occurred and is continuing
5 Include bracketed language only if any such change has occurred.
C-1
[CURIOSITY INC., as the Borrower][CURIOSITYSTREAM INC, as the Parent Company]
By:
Name:
Name:
Title:
C-2
SCHEDULE I
FINANCIAL STATEMENTS
The information described herein as of [ ] and pertains to the fiscal [quarter][year] ended [ ]
[See attached]
C-3
SCHEDULE II
FINANCIAL COVENANTS
Compliance as of _________, ____
CONSOLIDATED LEVERAGE RATIO
(in accordance with the definition of Consolidated Leverage Ratio as set forth in the Credit Agreement)
1. | Consolidated Total Debt: | |||||||
| the aggregate stated balance sheet amount of all indebtedness for borrowed money of the Parent Company and its subsidiaries (or, if higher, the par value or stated face amount of all such indebtedness for borrowed money (other than zero coupon indebtedness for borrowed money)) on a consolidated basis on such date | $__________ | |||||||
a. | Total: Consolidated Total Debt | $__________ | ||||||
2. | Consolidated Net Income: | |||||||
a. | Consolidated net income (or loss) of the Parent Company and its subsidiaries on a consolidated basis; | $__________ | ||||||
b. | Excluding (to the extent otherwise included in the calculation of 2.a.): | |||||||
| the income (or deficit) of any Person accrued prior to the date it becomes a subsidiary of the Parent Company or is merged into or consolidated with the Parent Company or any of its subsidiaries; | $__________ | |||||||
| the income (or deficit) of any Person (other than a subsidiary of the Parent Company) in which the Parent Company or any of its subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Parent Company or such subsidiary in the form of dividends or similar distributions; and | $__________ | |||||||
| the undistributed earnings of any subsidiary of the Parent Company to the extent that the declaration or payment of dividends or similar distributions by such subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or requirement of law applicable to such subsidiary. | $__________ | |||||||
c. | Total: Consolidated Net Income (2.a. minus 2.b) | $__________ | ||||||
3. | Consolidated EBITDA | |||||||
a. | Consolidated Net Income [Total from 2.c. above] | $__________ | ||||||
C-4
b. | Plus the following expenses or charges without duplication and to the extent deducted in determining Consolidated Net Income for such period | $__________ | ||||||
| (i) Consolidated Interest Expense for such period [Total from 4.c. below] | $__________ | |||||||
| (ii) provision for taxes based on income for such period | $__________ | |||||||
| (iii) depreciation expenses for such period | $__________ | |||||||
| (iv) amortization expenses for such period | $__________ | |||||||
| (v) unusual or non-recurring charges, expenses or losses for such period | $__________ | |||||||
| (vi) stock-based compensation and other non-cash charges, expenses or losses for such period (excluding any such non-cash charge to the extent it represents an accrual or reserve for potential cash charge in any future period or amortization of a prepaid cash charge that was paid in a prior period) | $__________ | |||||||
c. | Minus to the extent included in the statement of Consolidated Net Income for such period, the sum of | |||||||
| (i) any non-cash income or gains increasing Consolidated Net Income for such period (excluding any such non-cash gain to the extent it represents the reversal of an accrual or reserve for potential cash charge in any prior period) | $__________ | |||||||
| (ii) any gains realized from the disposition of property outside of the ordinary course of business for such period, all as determined on a consolidated basis | $__________ | |||||||
| (iii) any interest income for such period | $__________ | |||||||
d. | Total: Consolidated EBITDA (3.a plus 3.b. minus 3.c) | $__________6 | ||||||
| 4. | Consolidated Interest Expense | |||||||
| a. | Total interest expense (including imputed interest on capitalized leases) on a consolidated basis for such period with respect to all outstanding indebtedness for borrowed money of the Parent Company and its subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under swap contracts in respect of interest rates to the extent that such net costs are allocable to such period) | $__________ | ||||||
| b. | Minus any non-cash interest expenses for such period | $__________ | ||||||
| c. | Total: Consolidated Interest Expense (4.a minus 4.b) | $__________ | ||||||
Consolidated Leverage Ratio = the ratio of Consolidated Total Debt (Line 1.a.) to Consolidated EBITDA (Line 3.d.) = __ to 1.00 (Consolidated Leverage Ratio no greater than 3.00 to 1.00)
6 If during such period the Parent Company or any of its subsidiaries shall have consummated an acquisition, Consolidated EBITDA for such period shall be calculated after giving pro forma effect thereto as if such acquisition occurred on the first day of such period.
C-5
In compliance with Consolidated Leverage Ratio Covenant (Section 6.20)? [Yes][No]
C-6
CONSOLIDATED INTEREST COVERAGE RATIO
(in accordance with the definition of Consolidated Interest Coverage Ratio as set forth in the Credit Agreement)
5. | Consolidated EBITDA [Total from 3.d. above] | $__________ | ||||||
6. | Consolidated Interest Expense [Total from 4.c. above] | $__________ | ||||||
Consolidated Interest Coverage Ratio = the ratio of Consolidated EBITDA (Line 5) to Consolidated Interest Expense (Line 6) = __ to 1.00 (Consolidated Interest Coverage Ratio no less than 3.00 to 1.00)
In compliance with Consolidated Interest Coverage Ratio Covenant (Section 6.21)? [Yes][No]
C-7
Exhibit 10.10
Execution Version
GUARANTY
GUARANTY, dated as of March 12, 2026, made by CuriosityStream Inc, a corporation organized and existing under the laws of the State of Delaware (the “Initial Guarantor”), and each other entity that becomes a party hereto pursuant to Section 20 hereof (together with the Initial Guarantor, each a “Guarantor” and collectively, the “Guarantors”), in favor of Citibank, N.A., in its capacity as Lender (as defined in the Credit Agreement (as defined below)) and as an agent and collateral agent for the benefit of the Secured Parties (as defined in the Credit Agreement) (Citibank, N.A. and its successors and assigns, collectively, “Citi”). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Credit Agreement.
For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and to induce Citibank, N.A. to enter into the Credit Agreement dated as of the date hereof (as amended, supplemented and otherwise modified from time to time, the “Credit Agreement”) with Curiosity Inc. (the “Borrower”), the Initial Guarantor and each other Guarantor party thereto from time to time, each Guarantor agrees as follows:
1. Guaranty. Each Guarantor, jointly and severally, absolutely and unconditionally guarantees, as primary obligor and not merely as surety, the full and punctual payment when due, whether upon maturity, scheduled payment date, by acceleration, early termination or otherwise, of all Obligations (as defined in the Credit Agreement) (now or hereafter existing) of the Borrower and the other Loan Parties (other than such Guarantor) (all such obligations, the “Obligations”). If any Loan Party fails to pay any Obligation in full when due (whether at stated maturity, scheduled payment date, by acceleration, early termination or otherwise) strictly in accordance with the terms of any document or agreement evidencing such Obligation (as amended or otherwise modified from time to time pursuant to the terms of such document or agreement), including in the amounts, in the currency and at the place expressly agreed to thereunder, irrespective of and without giving effect to any law, order, decree or regulation in effect from time to time of the jurisdiction where such Loan Party or any other person or entity obligated on such Obligation is located, the Guarantors will promptly pay the same to Citi. The Guarantors will also pay to Citi any and all documented, out-of-pocket costs and expenses (including without limitation, reasonable legal fees and expenses) incurred by Citi in enforcing its rights under this Guaranty. This Guaranty is a guaranty of payment and not merely of collection. Notwithstanding anything contained herein to the contrary, the obligations of each Guarantor hereunder at any time shall be limited to the maximum amount as will result in the obligations of such Guarantor under this Guaranty not constituting a fraudulent transfer or conveyance.
2. Guaranty Absolute. The liability of the Guarantors under this Guaranty shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now or hereafter acquire in any way relating to, any or all of the following: (i) any illegality, lack of validity or unenforceability of any Obligation, (ii) any amendment, modification, waiver or consent to departure from the terms of any Obligation, including any renewal or extension of the time of payment or change in the manner or place of payment, (iii) any exchange, substitution, release, non-perfection or impairment of any collateral securing payment of any Obligation, (iv) any change in the corporate existence, structure or ownership of the Borrower or any other Loan Party (including without limitation, any Guarantor failing to hold any equity interest in the Borrower or being a subsidiary of the Borrower), or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Borrower or any other Loan Party or its assets or any resulting release or discharge of any Obligation, (v) the existence of any claim, set-off or other rights that such Guarantor may have at any time against the Borrower, any other Loan Party, Citi, or any
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other corporation or person, whether in connection herewith or any unrelated transaction, provided that nothing herein will prevent the assertion of any such claim by separate suit or compulsory counterclaim, (vi) any law, regulation, decree or order of any jurisdiction, or any other event, affecting any term of any Obligation or Citi’s rights with respect thereto, including, without limitation: (A) the application of any such law, regulation, decree or order, including any prior approval, that would prevent the exchange of a non-Contractual Currency (as defined below) for a Contractual Currency or the remittance of funds outside of such jurisdiction or the unavailability of a Contractual Currency in any legal exchange market in such jurisdiction in accordance with normal commercial practice; (B) a declaration of banking moratorium or any suspension of payments by banks in such jurisdiction or the imposition by such jurisdiction or any governmental authority thereof of any moratorium on, required rescheduling or restructuring of, or required approval of payments on, any indebtedness in such jurisdiction; (C) any expropriation, confiscation, nationalization or requisition by such country or any governmental authority that directly or indirectly deprives the Borrower or any other Loan Party of any assets or their use or of the ability to operate its business or a material part thereof; or (D) any war (whether or not declared), insurrection, revolution, hostile act, civil strife or similar events occurring in such jurisdiction that have an effect similar to that of an event described in clause (A), (B) or (C) above, and (vii) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by Citi that might otherwise constitute a defense available to, or a legal or equitable discharge of, the Borrower, any other Loan Party or any Guarantor or any other guarantor or surety.
Without limiting the generality of the foregoing, each Guarantor agrees, subject to Section 7, that such Guarantor shall pay Citi strictly in accordance with the terms of any document or agreement evidencing any Obligation (as amended or otherwise modified from time to time pursuant to the terms of such document or agreement), including in the amounts, in the currency and at the place expressly agreed to thereunder, irrespective of and without giving effect to any law, order, decree or regulation in effect from time to time of the jurisdiction where the Borrower or any other Loan Party or any other person or entity obligated on such Obligation is located (such terms, the “Contractual Terms” and such currency, the “Contractual Currency”). This Guaranty relates to international credit transactions in which the specification of the Contractual Terms, including without limitation, the Contractual Currency, of any document or agreement evidencing any Obligation is of the essence.
It is the intent of this Section 2 that the Guarantors’ obligations hereunder are joint and several and shall be absolute and unconditional under any and all circumstances.
3. Waiver. Each Guarantor waives promptness, diligence, notice of acceptance, notice of dishonor and any other notice with respect to any Obligation and this Guaranty and any requirement that Citi exercise any right or take any action against the Borrower, or any other Loan Party or any collateral security or credit support.
4. Reinstatement. This Guaranty will continue to be effective or be reinstated, as the case may be, if at any time any payment of any Obligation is rescinded or must otherwise be returned by Citi upon the insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party or otherwise, all as though such payment had not been made, but only to the extent such payment is rescinded or otherwise returned.
5. Subrogation. No Guarantor will assert, enforce or otherwise exercise any rights that it may acquire by way of subrogation under this Guaranty, by any payment made hereunder or otherwise, until all Obligations have been indefeasibly paid in full in accordance with the terms of this Guaranty or the Contractual Terms (as the case may be), any and all letters of credit and similar instruments have expired or
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terminated, and any and all agreements under which Citi is committed to provide extensions of credit have terminated.
6. Taxes. Any and all payments by any Guarantor hereunder will be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding income or franchise taxes imposed on Citi’s net income by the jurisdiction under the laws of which Citi is organized or any political subdivision thereof or by the jurisdiction of Citi’s lending office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities, collectively, “Taxes”). If any Guarantor is required by law to deduct any Taxes from or in respect of any sum payable hereunder (i) the sum payable will be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section), Citi will receive an amount equal to the sum it would have received had no such deductions been made, (ii) such Guarantor will make such deductions, and (iii) such Guarantor will pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. In addition, the Guarantors will pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Guaranty or the Obligations (“Other Taxes”). The Guarantors will promptly furnish to Citi the original or a certified copy of a receipt evidencing payment thereof. The Guarantors will indemnify Citi for the full amount of Taxes or Other Taxes paid by Citi or any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted, within 30 days of Citi’s request therefor. Without prejudice to the survival of any other agreement contained herein, the Guarantors’ agreements and obligations contained in this Section will survive the payment in full of the Obligations and any amounts due hereunder and any termination of this Guaranty.
7. Place and Currency of Payment. Each Guarantor will make each payment hereunder in U.S. Dollars and at such place as Citi specifies to such Guarantor. In the event that any Contractual Currency is non-U.S. Dollars, the Guarantors will pay Citi the equivalent of the amount of such Obligation in U.S. Dollars calculated at the rate of exchange at which, in accordance with normal banking procedures, Citi may buy such Contractual Currency in New York, New York on the date any Guarantor makes such payment. If the Contractual Currency no longer exists, the Guarantors will make such payment hereunder in such currency and in such amount that would, in the reasonable judgment of Citi, place Citi in a position reasonably comparable to the position it would have been in had the Contractual Currency continued to exist.
8. Set-Off. If any Guarantor fails to pay any of its obligations hereunder when due and payable, Citi is authorized at any time and from time to time, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by Citi to or for each Guarantor’s credit or account against any and all of the Obligations, whether or not Citi has made any demand under this Guaranty. Citi will promptly notify the relevant Guarantor after any such set-off and application, provided that the failure to give such notice will not affect the validity of such set-off and application. Citi’s rights under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) that Citi may have.
9. Representations and Warranties. Each Guarantor represents and warrants that: (i) the execution, delivery and performance by such Guarantor of this Guaranty are within its corporate powers or other organizational powers, have been duly authorized by all necessary corporate or other organizational action, and do not contravene (x) its charter, by-laws or other organizational documents or (y) any law or any contractual restriction binding on or affecting such Guarantor or any entity that controls it, (ii) no
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authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for the due execution, delivery and performance by such Guarantor of this Guaranty and (iii) this Guaranty has been duly executed and delivered by such Guarantor and is its legal, valid and binding obligation, enforceable against such Guarantor in accordance with its terms.
10. Continuing Guaranty. This is a continuing guaranty that applies to all Obligations whenever arising. This Guaranty is irrevocable and will remain in full force and effect until all the Obligations (other than contingent indemnification obligations for which no claims have been made) have been unconditionally and irrevocably paid and discharged in full, the Revolving Loan Commitments (as defined in the Credit Agreement) of the Lender to make any Revolving Loan (as defined in the Credit Agreement) under the Credit Agreement shall have expired or been sooner terminated in accordance with the provisions of the Credit Agreement, and all Letters of Credit shall have expired, terminated or been Cash Collateralized.
11. Amendments, Guarantor Assignments, Etc. No amendment of this Guaranty will be effective unless the same is in writing and signed by each Guarantor directly affected thereby and Citibank, N.A., on behalf of Citi. No waiver of any provision of this Guaranty, and no consent to departure by any Guarantor herefrom, will in any event be effective unless the same is in writing and signed by Citibank, N.A., on behalf of Citi, and then such waiver or consent will be effective only in the specific instance and for the specific purpose for which given. No Guarantor may assign or otherwise transfer any of its obligations hereunder without the prior written consent of Citi.
12. Addresses. All notices and other communications provided for hereunder will be in writing (including telecopier communication), and mailed, telecopied or delivered to it, if to the Guarantors, at the Initial Guarantor’s address at 8484 Georgia Ave., Suite 700, Silver Spring, MD 20910, Attention: Brady Hayden, Chief Financial Officer, and if to Citi, at its address c/o Citibank, N.A., 1 Market St, Floor 41, San Francisco, CA 94105, Attention: ____________ with a copy to Citi at its address c/o Commercial Loan Operations, 6400 Las Colinas Blvd., Mailstop CC1-30, Irving, TX 75039, or, as to either party, at such other address as is designated by such party in a written notice to the other party. All such notices and other communications will, when mailed or telecopied, be effective when deposited in the mails or telecopied, respectively.
13. Guarantors’ Credit Decision, Etc. Each Guarantor has, independently and without reliance on Citi and based on such documents and information as such Guarantor has deemed appropriate, made its own credit analysis and decision to enter into this Guaranty. Each Guarantor has adequate means to obtain from the Borrower on a continuing basis information concerning the financial condition, operations and business of the Borrower and the other Loan Parties, and such Guarantor is not relying on Citi to provide such information now or in the future. Each Guarantor acknowledges that it will receive substantial direct and indirect benefit from the extensions of credit contemplated by this Guaranty.
14. Severability. If any provision hereof is found by a court to be invalid or unenforceable, to the fullest extent permitted by applicable law, the Guarantors and Citi (by acceptance of this Guaranty) agree that such invalidity or unenforceability will not impair the validity or enforceability of any other provision hereof.
15. Judgment. If for the purposes of obtaining judgment in any court it is necessary to convert a sum payable hereunder in either the Contractual Currency or U.S. Dollars pursuant to Section 7 (the “Guaranty Currency”) into another currency (the “Other Currency”), each Guarantor agrees that the rate of exchange used will be that at which, in accordance with normal banking procedures, Citi could purchase
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the Guaranty Currency with the Other Currency on the business day preceding that on which final judgment is given. The obligation of each Guarantor in respect of any sum due hereunder will, notwithstanding any judgment in the Other Currency, be discharged only to the extent that, on the date such Guarantor makes payment to Citi of any sum adjudged to be so due in the Other Currency, Citi may, in accordance with normal banking procedures, purchase the Guaranty Currency with the Other Currency; if the amount of the Guaranty Currency so purchased is less than the sum originally due to Citi in the Guaranty Currency, each Guarantor agrees, as a separate obligation and notwithstanding any such judgment, to indemnify Citi against such loss, and if the amount of the Guaranty Currency so purchased exceeds the amount originally due to Citi in the Guaranty Currency, Citi agrees to remit to the relevant Guarantor such excess.
16. Governing Law. This Guaranty and any right, remedy, obligation, claim, controversy, dispute or cause of action (whether in contract, tort or otherwise) based upon, arising out of or relating to this Guaranty shall be governed by, and construed in accordance with, the law of the State of New York without regard to conflicts of law principles that would lead to the application of laws other than the law of the State of New York.
17. Consent to Jurisdiction, Etc. Each Guarantor irrevocably and unconditionally (i) agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or in equity, whether in contract, tort or otherwise, against Citi arising out of or relating to this Guaranty in any forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, (ii) submits to the jurisdiction of such courts and agrees that all claims in respect of such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such federal court, (iii) agrees that a final judgment in any such action, litigation or proceeding will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law, (iv) waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Guaranty in any court referred to in this Section, (v) waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and (vi) consents to the service of any process, summons, notice or document in any such action, litigation or proceeding by registered mail addressed to the Initial Guarantor at its address specified in Section 12. Nothing herein will affect the right of Citi to serve legal process in any other manner permitted by law or affect Citi’s right to bring any action, litigation or proceeding against any Guarantor or its property in the courts of other jurisdictions. To the extent that any Guarantor has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, such Guarantor irrevocably waives such immunity in respect of its obligations under this Guaranty.
18. WAIVER OF JURY TRIAL. EACH GUARANTOR IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS GUARANTY OR CITI’S ACTIONS IN THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT HEREOF.
19. Electronic Signature. Delivery of an executed counterpart of a signature page of this Guaranty by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Guaranty and shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National
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Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
20. Additional Guarantors. It is understood and agreed that any Wholly-Owned Subsidiary of the Initial Guarantor or any other Loan Party that is required to become a party to this Guaranty after the Effective Date pursuant to Section 6.18 of the Credit Agreement shall automatically become a Guarantor hereunder upon the execution and delivery by such Wholly-Owned Subsidiary of an instrument of accession or joinder in form and substance satisfactory to Citibank, N.A. and the delivery of same to Citibank, N.A., with the same force and effect as if originally named as a party herein. The execution and delivery of any instrument adding an additional party to this Guaranty shall not require the consent of any party hereunder. The rights and obligations of each party hereunder shall remain in full force and effect notwithstanding the addition of any new party hereto.
[Signature Page Follows]
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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed and delivered as of the date first written above.
CURIOSITYSTREAM, INC.
By /s/ P. Brady Hayden
Name: P. Brady Hayden
Title: Chief Financial Officer
ACKNOWLEDGED AND ACCEPTED BY:
CITIBANK, N.A.
By: /s/ Bryant Bedwell
Name: Bryant Bedwell
Title: Director
[Guaranty – Signature Page]
Exhibit 10.11
Execution Version
PLEDGE AND SECURITY AGREEMENT dated as of March 12, 2026 among THE GRANTORS FROM TIME TO TIME PARTY HERETO, and CITIBANK, N.A., as Collateral Agent | ||
TABLE OF CONTENTS
Page
Section 1.01. Terms Defined in the Credit Agreement 1
Section 1.02. Terms Defined in the Uniform Commercial Code 1
Section 1.03. Additional Definitions 1
Section 1.04. Terms Generally 10
ARTICLE II SECURITY INTERESTS 10
Section 2.01. Grant of Security Interests 10
Section 2.02. Collateral 10
Section 2.03. Continuing Liability of Each Grantor 11
Section 2.04. Security Interests Absolute 11
ARTICLE III REPRESENTATIONS AND WARRANTIES 13
Section 3.01. Grantor Information 13
Section 3.02. Title to Collateral 13
Section 3.03. Validity, Perfection and Priority of Security Interests. 14
Section 3.04. Receivables 14
Section 3.05. No Consents 14
Section 3.06. Deposit and Securities Accounts 15
Section 3.07. Commercial Tort Claims 15
Section 3.08. Intellectual Property 15
Section 3.09. Pledged Collateral 15
Section 3.10. Insurance 15
Section 3.11. Letter-of-Credit Rights 15
Section 3.12. Other Collateral 15
ARTICLE IV COVENANTS 16
Section 4.01. Deliveries 16
Section 4.02. Change of Name, Identity, Structure or Location; Subjection to Other Security Agreements 16
Section 4.03. Further Actions 16
Section 4.04. Collateral in Possession of Other Persons, Leased Real Property Locations 17
Section 4.05. Books and Records; Receivables 17
Section 4.06. Delivery of Certificated Securities, Uncertificated Securities, Instruments, Etc. 17
Section 4.07. Notification to Account Debtors 19
Section 4.08. Information Regarding Collateral 19
Section 4.09. Covenants Regarding Intellectual Property 19
Section 4.10. Deposit Accounts and Securities Accounts 20
Section 4.11. Electronic Chattel Paper 21
Section 4.12. Commercial Tort Claims 21
Section 4.13. Letter-of-Credit-Rights 21
Section 4.14. Insurance 21
ARTICLE V DISTRIBUTIONS ON PLEDGED COLLATERAL; VOTING. 21
Section 5.01. Right to Receive Distributions on Collateral; Voting. 21
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Table of Contents (Cont.)
Page
ARTICLE VI GENERAL AUTHORITY; REMEDIES 22
Section 6.01. General Authority 22
Section 6.02. Authority of the Collateral Agent 23
Section 6.03. Remedies upon an Event of Default 23
Section 6.04. Limitation on duty of Collateral Agent in respect of Collateral 26
Section 6.05. Securities Act 26
Section 6.06. Application of Proceeds 27
ARTICLE VII CONCERNING THE COLLATERAL AGENT 27
Section 7.01. Reference to Credit Agreement 27
Section 7.02. Indemnity 27
ARTICLE VIII MISCELLANEOUS 28
Section 8.01. Notices 28
Section 8.02. Costs and Expenses 28
Section 8.03. No Waivers; Non-Exclusive Remedies 28
Section 8.04. Reserved 28
Section 8.05. Amendments and Waivers 28
Section 8.06. Successors and Assigns 28
Section 8.07. Limitation of Law; Severability 28
Section 8.08. Counterparts; Effectiveness 29
Section 8.09. Additional Grantors 29
Section 8.10. Termination 29
Section 8.11. Entire Agreement 30
Section 8.12. GOVERNING LAW 30
Section 8.13. SUBMISSION TO JURISDICTION 30
Section 8.14. WAIVER OF JURY TRIAL 30
Section 8.15. SERVICE OF PROCESS 30
Schedules:
Schedule 1.02 | Commercial Tort Claims | ||||
Schedule 3.01(a) | Legal Name; Trade Name; Location; Chief Executive Office | ||||
Schedule 3.01(b) | Additional Grantor Information | ||||
Schedule 3.01(c) | Extraordinary Transactions | ||||
Schedule 3.06 | Deposit Accounts and Securities Accounts | ||||
Schedule 3.08 | Intellectual Property | ||||
Schedule 3.09 | Pledged Shares, Pledged LLC Interests, Pledged Partnership Interests and Pledged Notes | ||||
Schedule 3.10 | Insurance | ||||
Schedule 3.11 | Letter-of-Credit Rights | ||||
Schedule 3.12 | Other Collateral | ||||
Schedule 4.01 | Filings to Perfect Security Interests | ||||
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Table of Contents (Cont.)
Page
Exhibits:
Exhibit A | Form of Grant of Security Interest in United States Patents and Trademarks | ||||
Exhibit B | Form of Grant of Security Interest in United States Copyrights | ||||
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This PLEDGE AND SECURITY AGREEMENT (as amended, restated, modified or supplemented from time to time, this "Agreement") dated as of March 12, 2026 is made among CURIOSITY INC., a Delaware corporation (the "Borrower"), CuriosityStream Inc, a corporation organized and existing under the laws of the State of Delaware (the "Parent Company") and any other Person that becomes party hereto pursuant to Section 8.09 hereto (the Borrower, the Parent Company and each such person, a "Grantor", and collectively, the "Grantors"), in favor of CITIBANK, N.A., for itself and as collateral agent for the benefit of the Secured Parties (in such capacity, together with its successors, the "Collateral Agent").
Pursuant to that certain credit agreement, dated as of March 12, 2026, and entered into by, among others, the Borrower, as borrower, the Parent Company and certain affiliates of the Borrower, as guarantors, and Citibank, N.A. as Lender (as amended, amended and restated, novated, supplemented or otherwise modified or extended from time to time, the "Credit Agreement"), Citibank, N.A. has agreed to make available a facility to the Borrower subject to the terms and conditions stated therein.
In consideration of the extensions of credit and other accommodations of the Secured Parties as set forth in the Credit Agreement, each Grantor has agreed to secure the obligations of the Loan Parties under the Loan Documents as set forth herein.
The Grantors will receive substantial direct and indirect benefit from the transactions contemplated by the Loan Documents and each is, therefore, willing to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, each Grantor hereby agrees with the Collateral Agent as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
Section 1.01.Terms Defined in the Credit Agreement. Capitalized terms defined in the Credit Agreement and not otherwise defined herein have, as used herein and in the introductory statement above, the respective meanings provided for therein.
Section 1.02.Terms Defined in the Uniform Commercial Code. Unless otherwise defined herein or in accordance with Section 1.01 or the context otherwise requires, the following terms, together with any uncapitalized terms used herein which are defined in the UCC (as defined below), have the respective meanings provided in the UCC (and, if defined in more than one Article of the UCC, shall have the meaning given in Article 9 thereof): Account; As-Extracted Collateral; Bank; Certificated Security; Chattel Paper; Commercial Tort Claim; Commodity Account; Deposit Account; Document; Electronic Chattel Paper; Entitlement Order; Equipment; Financial Asset; Fixtures; Goods; Inventory; Investment Property; Letter-of-Credit Right; Money; Payment Intangible; Proceeds; Record; Securities Account; Securities Intermediary; Security; Security Certificate; Security Entitlement; Supporting Obligations; Tangible Chattel Paper; and Uncertificated Security.
Section 1.03.Additional Definitions. Terms defined in the introductory section hereof and in Section 1.02 have the respective meanings set forth therein. The following additional terms, as used herein, have the following respective meanings:
"Account Control Agreement" means (i) with respect to a Deposit Account, a deposit account control agreement, reasonably acceptable in form and substance to the Collateral Agent, among one or more Grantors, the Collateral Agent, and the bank which maintains such Deposit Account and (ii) with respect to a Securities Account, a securities account control agreement, reasonably acceptable in form and substance to the Collateral Agent, among one or more Grantors, the Collateral Agent and the Securities Intermediary which maintains such Securities Account.
"Account Debtor" means an "account debtor" (as defined in the UCC), and also means and includes Persons obligated to pay negotiable instruments and other Receivables.
"Agreement" has the meaning assigned to that term in the preamble.
"Collateral" has the meaning specified in Section 2.02 of this Agreement.
"Collateral Agent" has the meaning specified in the introductory section herein.
"Control Collateral" means (i) all Collateral consisting of Deposit Accounts, Money, Electronic Chattel Paper, Certificated Securities, Commodity Accounts, Uncertificated Securities, Instruments, Securities Entitlements, Securities Accounts and Letter-of-Credit Rights, and (ii) any other item of Collateral in which the security interest of the Collateral Agent is capable of being perfected solely by possession or control thereof by a secured party under Article 9 of the UCC or any other mandatory provisions of law.
"Copyright" means any of the following, whether now existing or hereafter arising, created, owned or acquired by a Grantor:
(i)the copyrights under U.S. or non-U.S. laws described on Schedule 3.08 (as a such Schedule may be amended or supplemented from time to time) and any renewals thereof;
(ii)all common law and/or statutory rights in all copyrightable subject matter under the laws of the United States or any other country (whether or not the underlying works of authorship have been published), including, but not limited to, copyrights in software and all rights in and to databases and all design, whether registered or unregistered;
(iii)all registrations and applications for registration of any of the foregoing in the United States or any other country, including registrations, recordings, supplemental, derivative or collective work registrations and pending applications for registrations in the United States Copyright Office or any other country;
(iv)all reissues, renewals, continuations and extensions of the foregoing;
(v)all tangible property embodying or incorporating any or all of the foregoing, whether in completed form or in some lesser state of completion, and all masters, duplicates, drafts, versions, variations and copies thereof, in all formats;
(vi)all claims for, and rights to sue for, past, present and future infringement of any of the foregoing;
(vii)all Proceeds of the foregoing, including, without limitation, income, royalties, license fees, damages and payments now or hereafter due or payable with respect to any of the foregoing, including, without limitation, damages and payments for past, present or future infringements thereof and payments and damages under all Copyright Licenses in connection therewith; and
(viii)all other rights of any kind accruing thereunder or pertaining thereto throughout the world.
"Copyright License" means any agreement now or hereafter in existence granting to any Grantor any rights, whether exclusive or non-exclusive, to use another Person's copyrights or copyright applications, or pursuant to which any Grantor has granted to any other Person, any right, whether exclusive or non-exclusive, with respect to any Copyright, whether or not registered, including, without limitation, the Copyright Licenses described on Schedule 3.08.
"Copyright Security Agreement" means a copyright security agreement, substantially in the form of Exhibit B, between one or more Grantors and the Collateral Agent.
"Credit Agreement" has the meaning assigned to that term in the preamble.
“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.
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"Delivery" and the corresponding term "Delivered" when used with respect to Collateral means:
(i)in the case of Collateral constituting Certificated Securities, transfer thereof to the Collateral Agent or its nominee or custodian by physical delivery to the Collateral Agent or its nominee or custodian, accompanied by undated instruments of transfer or assignment duly executed in blank;
(ii)in the case of Collateral constituting Uncertificated Securities, (A) registration thereof on the books and records of the issuer thereof in the name of the Collateral Agent or its nominee or custodian (who may not be a Securities Intermediary) or (B) the execution and delivery by the issuer thereof of an effective agreement, in form and substance reasonably satisfactory to the Collateral Agent, pursuant to which such issuer agrees that it will comply with instructions originated by the Collateral Agent or such nominee or custodian without further consent of the registered owner of such Uncertificated Securities or any other Person;
(iii)in the case of Collateral constituting Security Entitlements or other Financial Assets deposited in or credited to a Securities Account, the execution and delivery by the relevant Securities Intermediary of an effective Account Control Agreement pursuant to which such Securities Intermediary agrees to comply with all entitlement orders originated by the Collateral Agent or such nominee or custodian without further consent by the relevant entitlement holder or any other Person;
(iv)in the case of LLC Interests, Partnership Interests and Stock, (A) compliance with the provisions of Section 4.06(b) and (B) (1) compliance with clause (i) above for each such item of Collateral which is represented by a certificate and (2) compliance with the provisions of clause (ii) above for each such item of Collateral which is not evidenced by a certificate; and
(v)in the case of Collateral which constitute Instruments, transfer thereof to the Collateral Agent or its nominee or custodian by physical delivery to the Collateral Agent or its nominee or custodian, accompanied by undated instruments of transfer or assignment duly executed in blank;
and in each case such additional or alternative procedures as may hereafter become reasonably appropriate to grant control of, or otherwise perfect a security interest in, any Pledged Collateral in favor of the Collateral Agent or its nominee or custodian, consistent with changes in applicable law or regulations or the interpretation thereof.
"Discharge Date" means the date upon which all the Obligations (other than contingent indemnification obligations for which no claims have been made) have been unconditionally and irrevocably paid and discharged in full and the Revolving Loan Commitments of the Collateral Agent to make any Revolving Loan under the Credit Agreement shall have expired or been sooner terminated in accordance with the provisions of the Credit Agreement.
"Excluded Assets" means:
(i)Excluded Contracts;
(ii)Excluded Equipment;
(iii)Intent-to-Use Trademarks;
(iv)Margin Stock;
(v)Excluded Equity;
(vi)all Commercial Tort Claims with a value (as reasonably determined by the applicable Grantor) of less than $500,000;
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(vii)all motor vehicles and other assets subject to certificates of title (to the extent a security interest therein cannot be perfected by the filing of a UCC financing statement);
(viii)any property where the Collateral Agent and the Borrower mutually agree that the cost of obtaining or perfecting a security interest therein is excessive in relation to the value afforded to the Secured Parties thereby; and
(ix)any property of a Grantor to the extent and for so long that the grant of a security interest in such property in favor of the Collateral Agent is prohibited by or in violation of any law, rule or regulation applicable to such Grantor, after giving effect to the applicable anti-assignment provisions of the UCC, other applicable law and principles of equity.
"Excluded Contract" means at any date any rights or interest of a Grantor in, to or under any agreement, contract, license, instrument or other document (referred to solely for purposes of this definition as a "Contract") to the extent and for so long that such Contract, by the express terms of a valid and enforceable restriction in favor of a Person who is not a Group Company, (i) prohibits, or requires any consent or establishes any other condition for, an assignment thereof or a grant of a security interest therein by a Grantor, in each case which prohibition, consent or other restriction is permitted under the Credit Agreement, and (ii) would give any party to such Contract other than a Group Company an enforceable right to terminate its obligations thereunder as a consequence of such assignment or grant of a security interest, after giving effect to the applicable anti-assignment provisions of the UCC, other applicable law and principles of equity; provided that (i) rights to payment under any such Contract otherwise constituting an Excluded Contract by virtue of this definition shall be included in the Collateral to the extent permitted thereby or by the UCC or other applicable law, and (ii) all Proceeds paid or payable to any Grantor from any sale, transfer or assignment of such Contract and all rights to receive such Proceeds shall be included in the Collateral.
"Excluded Equipment" means at any date any Equipment of a Grantor which is subject to, or secured by, a security interest securing a capital lease obligation or purchase money indebtedness permitted to be incurred under the Credit Agreement to the extent and for so long that (i) the express terms of a valid and enforceable restriction in favor of a Person who is not a Group Company contained in the agreements or documents granting or governing such capital lease obligation or purchase money indebtedness prohibits, or requires any consent or establishes any other conditions for, an assignment thereof, or a grant of a security interest therein, by a Grantor and (ii) such restriction relates only to the asset or assets acquired by a Grantor with the Proceeds of such capital lease obligation or purchase money indebtedness; provided that all Proceeds paid or payable to any Grantor from any sale, transfer or assignment or other voluntary or involuntary disposition of such Equipment and all rights to receive such Proceeds shall be included in the Collateral to the extent not otherwise required to be paid to the holder of the capital lease or purchase money indebtedness secured by such Equipment.
"Exempt Deposit Accounts" means (i) Deposit Accounts the balance of which consists exclusively of (A) withheld income taxes and federal, state or local employment taxes in such amounts as are required in the reasonable judgment of the Grantors to be paid to the Internal Revenue Service or state or local government agencies within the following two months with respect to employees of any of the Grantors and (B) amounts required to be paid over to an employee benefit plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or for the benefit of employees of one or more Grantors, (ii) all segregated Deposit Accounts constituting (and the balance of which consists solely of funds set aside in connection with) tax accounts, payroll accounts and trust accounts, (iii) any Deposit Account that is a zero-balance account, (iv) any Deposit Account that is used exclusively as an escrow account, fiduciary or other trust account, held exclusively for the benefit of third persons, and in each case, the funds or other property held in or maintained in such account, in each case to the extent such Deposit Account is expressly permitted pursuant to the terms of the Credit Agreement and (v) any other Deposit Account so long as the aggregate amount deposited in such Deposit Account does not exceed $100,000 at any time.
"Federal Securities Laws" has the meaning specified in Section 6.05.
"General Intangibles" means all "general intangibles" (as defined in the UCC) and also means and includes (i) all Payment Intangibles and other obligations and indebtedness owing to any
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Grantor (other than Accounts), from whatever source arising, (ii) all Commercial Tort Claims, Judgments and/or Settlements, (iii) all rights or claims in respect of refunds for taxes paid, (iv) all rights in respect of any pension plans or similar arrangements maintained for employees of any Grantor or any ERISA Affiliate, (v) all interests in limited liability companies and/or partnerships which interests do not constitute Securities and (vi) all Supporting Obligations of any kind given by any Person with respect to all or any of the foregoing.
"Grantor" has the meaning specified in the introductory section herein.
"Group Company" means each of the Parent Company and its subsidiaries.
"Instruments" means:
(i)all promissory notes from time to time issued to or otherwise acquired by any Grantor, including the promissory notes described on Schedule 3.09, as such schedule may be amended, supplemented or modified from time to time (the "Pledged Notes") and all interest, distributions, cash, instruments and other property, income, profits and proceeds from time to time received or receivable or otherwise made upon or distributed in respect of such Pledged Notes; and
(ii)all promissory notes, bankers' acceptances, commercial paper, negotiable certificates of deposit and other obligations constituting "instruments" within the meaning of Article 9 of the UCC;
and in each case to the extent not otherwise included in the foregoing, all cash and non-cash Proceeds thereof.
"Insurance Policy" means all policies of insurance and all proceeds of them either now or in the future held by, or written in favor of, a Grantor or in which it otherwise has an interest, including any key-person policies and those listed in Schedule 3.10 (as such schedule may be amended or supplemented from time to time) but excluding any third party liability or public liability insurance and any directors' and officers' insurance.
"Intellectual Property" means all Patents, Trademarks, Copyrights, Licenses, and any other rights in intellectual property, goodwill, trade names, service marks, trade secrets, confidential or proprietary technical and business information, know-how, show-how, domain names, mask works, customer lists, vendor lists, subscription lists, data bases and related documentation, registrations, franchises and all other intellectual or other similar property rights.
"Intent-to-Use Trademarks" has the meaning set forth in the definition of "Trademark".
"Investment Related Property" means (i) all "investment property" (as such term is defined in Article 9 of the UCC) and (ii) all of the following (regardless of whether classified as investment property under the UCC): all Stock, Instruments, LLC Interests and Partnership Interests; provided that (a) in no event shall more than sixty-five percent (65%) of the total outstanding voting equity interests of any Foreign Subsidiary which is a first-tier subsidiary owned by a Loan Party constitute Investment Related Property, and (b) in no event shall the equity interests of any joint ventures issued or granted to, or held by, any Loan Party constitute Pledged Equity to the extent prohibited by any contractual obligations (not entered in contemplation thereof) or organization documents or to the extent that the grant of a security interest therein would require the consent of any Person (other than any Grantor) (in each case so long as such prohibition or requirement of consent was not implemented in anticipation of this exclusion), in each case, to the extent the applicable prohibition or requirement for consent is not rendered ineffective pursuant to applicable provisions of the UCC (such equity interests referred to in the foregoing clauses (a) and (b), the “Excluded Equity”), it being further agreed that the equity interests of any Foreign Subsidiary which is not a first-tier subsidiary of any Loan Party shall constitute Excluded Equity.
"Judgments" means all judgments, decrees, verdicts, decisions or orders issued in resolution of or otherwise in connection with a Commercial Tort Claim, whether or not final or subject to appeal, and including all rights of enforcement relating thereto and any and all Proceeds thereof.
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"License" means any Patent License, Trademark License, Copyright License or other license or sublicense as to which any Grantor is a party.
"LLC Interests" means all limited liability company membership interests from time to time issued to or otherwise acquired by any Grantor, including the limited liability company membership interests described on Schedule 3.09, as such schedule may be amended, supplemented or modified from time to time (collectively, the "Pledged LLC Interests") and all dividends, distributions, cash, instruments and other property, income, profits and proceeds from time to time received or receivable or otherwise made upon or distributed in respect of such additional or substitute membership interests and all right, title, interest, privileges, authority and power of any Grantor in each limited liability company to which any Pledged LLC Interest relates, including, without limitation:
(i)all interests of such Grantor in the capital of such limited liability company and in all profits, losses and assets, whether tangible or intangible and whether real, personal or mixed, of such limited liability company, and all other distributions to which such Grantor shall at any time be entitled in respect of such Pledged LLC Interests;
(ii)all other payments due or to become due to such Grantor in respect of Pledged LLC Interests, whether under any limited liability company agreement or operating agreement or otherwise and whether as contractual obligations, damages, insurance proceeds or otherwise;
(iii)all of such Grantor's claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any limited liability company agreement or operating agreement, or at law or otherwise in respect of such Pledged LLC Interests;
(iv)all present and future claims, if any, of such Grantor against any such limited liability company for moneys loaned or advanced, for services rendered or otherwise;
(v)all of such Grantor's rights under any limited liability company agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Grantor relating to such Pledged LLC Interests, including any power to terminate, cancel or modify any limited liability company agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of such Grantor in respect of such Pledged LLC Interests and any such limited liability company, to make determinations, to exercise any election (including, without limitation, election of remedies) or option to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or give receipt for any of the foregoing or for any assets of any such limited liability company, to enforce or execute any checks or other instruments or orders, to file any claims and to take any other action in connection with any of the foregoing; and
(vi)in each case to the extent not otherwise included in the foregoing, all cash and non-cash Proceeds thereof.
"Partnership Interests" means all partnership interests from time to time issued to or otherwise acquired by any Grantor, including the partnership interests described on Schedule 3.09, as such schedule may be amended, supplemented or modified from time to time (collectively, the "Pledged Partnership Interests") and all dividends, distributions, cash, instruments and other property, income, profits and proceeds from time to time received or receivable or otherwise made upon or distributed in respect of such Pledged Partnership Interests and all right, title, interest, privileges, authority and power of any Grantor in each partnership to which any Pledged Partnership Interest relates, including, without limitation:
(i)all interests of such Grantor in the capital of such partnership and in all profits, losses and assets, whether tangible or intangible and whether real, personal or mixed, of such partnership, and all other distributions to which such Grantor shall at any time be entitled in respect of such Pledged Partnership Interests;
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(ii)all other payments due or to become due to such Grantor in respect of Pledged Partnership Interests, whether under any partnership agreement or otherwise and whether as contractual obligations, damages, insurance proceeds or otherwise;
(iii)all of such Grantor's claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any partnership agreement, or at law or otherwise in respect of such Pledged Partnership Interests;
(iv)all present and future claims, if any, of such Grantor against any such partnership for moneys loaned or advanced, for services rendered or otherwise;
(v)all of such Grantor's rights under any partnership agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Grantor relating to such Pledged Partnership Interests, including any power to terminate, cancel or modify any partnership agreement, to execute any instruments and to take any and all other action on behalf of and in the name of such Grantor in respect of such Pledged Partnership Interests and any such partnership, to make determinations, to exercise any election (including, without limitation, election of remedies) or option to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or give receipt for any of the foregoing or for any assets of any such partnership, to enforce or execute any checks or other instruments or orders, to file any claims and to take any other action in connection with any of the foregoing; and
(vi)in each case to the extent not otherwise included in the foregoing, all cash and non-cash Proceeds thereof.
"Patent" means any of the following, whether now existing or hereafter arising, invented, developed, reduced to practice, acquired or owned by a Grantor:
(i)the patents under U.S. or non-U.S. laws described on Schedule 3.08 and any renewals thereof;
(ii)all other letters patent and design letters patent of the United States or any other country;
(iii)all applications filed or in preparation for filing for letters patent and design letters patent of the United States or any other country including, without limitation, applications in the United States Patent and Trademark Office or in any similar office or agency of the United States or any other country or political subdivision thereof;
(iv)all reissues, divisions, continuations, continuations-in-part, revisions, renewals or extensions thereof;
(v)all claims for, and rights to sue for, past, present or future infringement of any of the foregoing;
(vi)all Proceeds of the foregoing, including, without limitation, income, royalties, license fees, damages and payments now or hereafter due or payable with respect to any of the foregoing, including, without limitation, damages and payments for past, present or future infringements thereof and payments and damages under all Patent Licenses in connection therewith; and
(vii)all other rights of any kind accruing thereunder or pertaining thereto throughout the world.
"Patent and Trademark Security Agreement" means a patent and trademark security agreement, substantially in the form of Exhibit A, between one or more Grantors and the Collateral Agent.
"Patent License" means any agreement now or hereafter in existence granting to any Grantor any right, whether exclusive or non-exclusive, with respect to any Person's patent or any
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invention now or hereafter in existence, whether or not patentable, or pursuant to which any Grantor has granted to any other Person, any right, whether exclusive or non-exclusive, with respect to any Patent or any invention now or hereafter in existence, whether or not patentable and whether or not a Patent or application for Patent is in or hereafter comes into existence on such invention, including, without limitation, the Patent Licenses described on Schedule 3.08.
"Pledged Collateral" means all Investment Related Property included in the Collateral.
"Pledged LLC Interests" has the meaning specified in the definition of "LLC Interests".
"Pledged Notes" has the meaning specified in clause (i) of the definition of "Instruments".
"Pledged Partnership Interests" has the meaning specified in the definition of "Partnership Interests".
"Pledged Shares" has the meaning specified in clause (i) of the definition of "Stock".
"Receivables" means all Accounts, all Payment Intangibles, all Instruments, all Chattel Paper, all Electronic Chattel Paper, all Letter-of-Credit Rights and all Supporting Obligations supporting or otherwise relating to any of the foregoing.
"Recordable Intellectual Property" means Intellectual Property the transfer of which is required to be recorded in the United States Patent and Trademark Office or the United States Copyright Office in order to be effective against subsequent third party transferees; provided that the following shall not be considered "Recordable Intellectual Property" hereunder: (i) unregistered United States Copyrights and (ii) non-exclusive Copyright Licenses.
"Requisite Priority Security" means a valid and perfected first priority security interest in favor of the Collateral Agent for the benefit of the Secured Parties and securing the Obligations, subject (a) in the case of Pledged Collateral, only to Permitted Liens having priority over the Collateral Agent's Security Interest by operation of law, and (b) in the case of every other type of Collateral, only to Permitted Liens.
"Security Interests" means the security interests granted pursuant to Section 2.01 hereof in favor of the Collateral Agent for the benefit of the Secured Parties securing the Obligations.
"Settlements" means all right, title and interest of a Grantor in, to and under any settlement agreement or other agreement executed in settlement or compromise of any Commercial Tort Claim, including all rights to enforce such agreements and all payments thereunder or arising in connection therewith.
"Stock" means:
(i)all shares of capital stock or other equity interests of any class of any issuer from time to time issued to or otherwise acquired by any Grantor, including the shares of capital stock and other Securities described on Schedule 3.09, as such schedule may be amended, supplemented or modified from time to time (collectively, the "Pledged Shares"), the certificates representing such Pledged Shares, and all dividends, interest, distributions, cash, instruments and other property, income, profits and proceeds from time to time received, receivable or otherwise made upon or distributed in respect of or in exchange for any or all of such Pledged Shares; and
(ii)in each case to the extent not otherwise included in the foregoing, all cash and non-cash Proceeds thereof.
"Trademark" means any of the following, whether now existing or hereafter arising, used, acquired or owned by a Grantor:
(i)the trademarks under U.S. or non-U.S. laws described on Schedule 3.08 and any renewals thereof (but excluding in all cases all "intent-to-use" United States trademark applications for which an "Amendment to Allege Use" or "Statement of Use" has not been filed
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under 15 U.S.C. § 1051(c) or 15 U.S.C. § 1051(d), respectively, or if filed, has not been deemed in conformance with 15 U.S.C. § 1051(a) or examined and accepted, respectively, by the United States Patent and Trademark Office (collectively, "Intent-to-Use Trademarks"));
(ii)all other trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos, certification marks, collective marks, brand names, trademark rights arising out of domain names and trade dress which are or have been used in the United States or in any state, territory or possession thereof, or in any other place, nation or jurisdiction, along with all prints and labels on which any of the foregoing have appeared or appear, package and other designs, and any other source or business identifiers, and general intangibles of like nature, and the rights in any of the foregoing which arise under applicable law;
(iii)the goodwill of the business symbolized thereby or associated with each of the foregoing;
(iv)all registrations and applications in connection therewith, including, without limitation, registrations and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision thereof;
(v)all reissues, extensions and renewals thereof;
(vi)all claims for, and rights to sue for, past, present or future infringements of any of the foregoing;
(vii)all Proceeds of the foregoing, including, without limitation, income, royalties, license fees, damages and payments now or hereafter due or payable with respect to any of the foregoing, including, without limitation, damages and payments for past, present or future infringements thereof and payments and damages under all Trademark Licenses in connection therewith; and
(viii)all other rights of any kind accruing thereunder or pertaining thereto throughout the world.
"Trademark License" means any agreement now or hereafter in existence granting to any Grantor any right, whether exclusive or non-exclusive, to use another Person's trademarks or trademark applications, or pursuant to which any Grantor has granted to any other Person, any right, whether exclusive or non-exclusive, to use any Trademark, whether or not registered, including, without limitation, the Trademark Licenses described on Schedule 3.08 and the rights to prepare for sale, sell and advertise for sale, all of the inventory now or hereafter owned by any Grantor and now or hereafter covered by such license agreements.
"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection or the priority of the Security Interests in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, "UCC" means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.
Section 1.04.Terms Generally. The definitions in the introductory statement hereof and in Sections 1.02 and 1.03 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. Unless otherwise expressly provided herein, the word "day" means a calendar day.
Furthermore, in this Agreement, unless a contrary intention appears, a reference to:
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(a) the Collateral Agent, any Secured Party, any Loan Party or any other person is, where relevant, deemed to be a reference to or to include, as appropriate, that person's successors in title, permitted assignees and transferees; or
(b) any Loan Document or other agreement or instrument is to be construed as a reference to that agreement or instrument as amended, modified, supplemented or novated (excluding any amendment, modification, supplement or novation made contrary to any provision of any Loan Document).
ARTICLE II
SECURITY INTERESTS
SECURITY INTERESTS
Section 2.01.Grant of Security Interests. To secure the due and punctual payment of all Obligations, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing or due or to become due, in accordance with the terms thereof and to secure the performance of all of its obligations and the obligations of all other Loan Parties hereunder and under the other Loan Documents in respect of the Obligations, each Grantor hereby grants to the Collateral Agent for the benefit of the Secured Parties a security interest in, and each Grantor hereby pledges and collaterally assigns to the Collateral Agent for the benefit of the Secured Parties, all of such Grantor's right, title and interest in, to and under the Collateral.
Section 2.02.Collateral. All right, title and interest of each Grantor in, to and under the following, whether now owned or existing or hereafter created or acquired by a Grantor, whether tangible or intangible, and regardless of where located, are herein collectively referred to as the "Collateral":
(a)all Accounts;
(b)all As-Extracted Collateral;
(c)all Chattel Paper;
(d)all Commercial Tort Claims now or hereafter described on Schedule 1.02;
(e)all Deposit Accounts and all Money;
(f)all Documents;
(g)all General Intangibles;
(h)all Goods (including, without limitation, Inventory, Equipment and Fixtures);
(i)all Instruments;
(j)all Intellectual Property;
(k)all Investment Related Property;
(l)all Letter-of-Credit Rights;
(m)all Supporting Obligations;
(n)all books and records (including, without limitation, customer lists, credit files, computer programs, printouts and other computer materials and records) pertaining to any of the Collateral;
(o)monies and property of any kind of any Grantor maintained with or in the possession of or under the control of the Collateral Agent; and
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(p)to the extent not otherwise included above, all other personal property of any kind, whether tangible or intangible, and all Proceeds, products, accessions, rents and profits of or in respect of any of the foregoing;
provided, however, that the Collateral shall not include any Excluded Assets.
Section 2.03.Continuing Liability of Each Grantor. Anything herein to the contrary notwithstanding, each Grantor shall remain liable to observe and perform all the terms and conditions to be observed and performed by it under any contract, agreement, warranty or other obligation with respect to the Collateral. None of the Collateral Agent or any Secured Party shall have any obligation or liability under any such contract, agreement, warranty or obligation by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any Secured Party of any payment relating to any Collateral, nor shall the Collateral Agent be required to perform or fulfill any of the obligations of any Grantor with respect to any of the Collateral, to make any inquiry as to the nature or sufficiency of any payment received by it or the sufficiency of the performance of any party's obligations with respect to any Collateral. Furthermore, none of the Collateral Agent or any Secured Party shall be required to file any claim or demand to collect any amount due or to enforce the performance of any party's obligations with respect to the Collateral.
Section 2.04.Security Interests Absolute. All rights of the Collateral Agent, all security interests hereunder and all obligations of each Grantor hereunder are unconditional and absolute and independent and separate from (i) any other security for or guaranty of the Obligations executed by such Grantor and (ii) any other security for or guaranty of the Obligations executed by any other Grantor or any other Person. Without limiting the generality of the foregoing, the obligations of each Grantor hereunder shall not be released, discharged or otherwise affected or impaired by:
(a)any extension, renewal, settlement, compromise, acceleration, waiver or release in respect of any obligation of any Loan Party under any Loan Document or any other agreement or instrument evidencing or securing any Obligation, by operation of law or otherwise;
(b)any change in the manner, place, time or terms of payment of any Obligation or any other amendment, supplement or modification to any Loan Document or any other agreement or instrument evidencing or securing any Obligation;
(c)any release, non-perfection or invalidity of any direct or indirect security for any Obligation, any sale, exchange, surrender, realization upon, offset against or other action in respect of any direct or indirect security for any Obligation or any release of the Borrower or any other Loan Party or any other obligor in respect of any Obligation;
(d)any change in the existence, structure or ownership of any Loan Party, or any insolvency, bankruptcy, reorganization, arrangement, readjustment, composition, liquidation or other similar proceeding affecting any Loan Party or its assets or any resulting disallowance, release or discharge of all or any portion of any Obligation;
(e)the existence of any claim, set-off or other right which any Grantor may have at any time against any other Loan Party, the Collateral Agent, any other Secured Party or any other Person, whether in connection herewith or any unrelated transaction; provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;
(f)any invalidity or unenforceability relating to or against any other Loan Party for any reason of any Loan Document or any other agreement or instrument evidencing or securing any Obligation or any provision of applicable law or regulation purporting to prohibit the payment by any other Loan Party of any Obligation;
(g)any failure by the Collateral Agent or any other Secured Party: (A) to file or enforce a claim against any Loan Party or its estate (in a bankruptcy or other proceeding); (B) to give notice of the existence, creation or incurrence by any Loan Party of any new or additional indebtedness or obligation under or with respect to the Obligations; (C) to commence any action against any Loan Party; (D) to disclose to any Loan Party any facts which such Secured Party may now or hereafter
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know with regard to any Loan Party; or (E) to proceed with due diligence in the collection, protection or realization upon any collateral securing the Obligations;
(h)any direction as to application of payment by any other Loan Party or any other Person;
(i)any subordination by any Secured Party of the payment of any Obligation to the payment of any other liability (whether matured or unmatured) of any Loan Party to its creditors;
(j)any act or failure to act by the Collateral Agent or any other Secured Party under this Agreement or otherwise which may deprive any Loan Party of any right to subrogation, contribution or reimbursement against any other Loan Party or any right to recover full indemnity for any payments made by such Loan Party in respect of the Obligations and, notwithstanding any payment made by any Grantor hereunder or under any other Loan Document or any set-off or application of funds of any Grantor by the Collateral Agent, no Grantor shall be entitled to be subrogated to any of the rights of the Collateral Agent against any other Loan Party or any collateral security or guarantee or right of offset held by the Collateral Agent for the payment of the Obligations, nor shall any Grantor seek or be entitled to seek any contribution or reimbursement from any other Loan Party in respect of amounts paid hereunder or any other Loan Document by such Grantor, until all amounts owing to the Collateral Agent by the Loan Parties on account of the Obligations are paid in full and all commitments to grant extensions of credit under the Credit Agreement are terminated and if any amount shall be paid to any Grantor on account of such subrogation rights in violation of this clause (j) such amount shall be held in trust for the benefit of the Collateral Agent and the other Secured Parties and shall forthwith be delivered by such Grantor to the Collateral Agent in the exact form received by such Grantor to be applied against the Obligations; or
(k)any other act or omission to act or delay of any kind by any Loan Party or the Collateral Agent or any other Secured Party or any other Person or any other circumstance whatsoever which might, but for the provisions of this clause, constitute a legal or equitable discharge of any Grantor's obligations hereunder.
This Agreement shall remain fully enforceable against each Grantor irrespective of any defenses that any other Loan Party may have or assert in respect of the Obligations, including, without limitation, failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury, except that a Loan Party (including any Grantor) may assert the defense that the Discharge Date has, or shall have, occurred.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
Each Grantor represents and warrants that:
Section 3.01.Grantor Information.
(a)Schedule 3.01(a) (as such schedule may be amended or supplemented from time to time) sets forth under the appropriate headings: (1) the exact legal name of such Grantor (as it appears in its certificate of incorporation, certificate of formation, partnership agreement or certificate of limited partnership, as applicable), (2) all trade names or other names under which such Grantor currently conducts business, (3) the type of organization of such Grantor, (4) the jurisdiction of organization of such Grantor, (5) its organizational identification number, if any, and (6) the jurisdiction where the chief executive office or its sole place of business is located.
(b)Except as provided on Schedule 3.01(b) (as such schedule may be amended or supplemented from time to time), (i) it has not changed its name, chief executive office or sole place of business or its corporate structure in any way (e.g., by merger, consolidation, change in corporate form or otherwise) and has not done business under any other name, or used any other name on any filings with the Internal Revenue Service, in each case, within the past five (5) years and (ii) it has not changed its jurisdiction of organization within the past four months.
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(c)As of the date hereof, except for those purchases, acquisitions and other transactions described in Schedule 3.01(c), all of the Collateral has been originated by each Grantor in the ordinary course of business or consists of goods which have been acquired by such Grantor in the ordinary course of business from a person in the business of selling goods of that kind.
(d)No Grantor is a "transmitting utility" (as defined in Section 9-102(a)(80) of the UCC).
Section 3.02.Title to Collateral.
(a)Such Grantor owns and has rights and, as to Collateral acquired by it from time to time after the date hereof, will own and have rights in each item of the Collateral in which it has granted a security interest hereunder, free and clear of any liens or security interests except for the Security Interests and Permitted Liens.
(b)Other than financing statements or other similar or equivalent documents or instruments with respect to the Security Interests or Permitted Liens, no financing statement, mortgage, security agreement or similar or equivalent document or instrument covering all or any part of the Collateral is on file or of record in any jurisdiction in which such filing or recording would be effective to perfect a Lien on such Collateral.
(c)No Pledged Collateral or other Collateral having a value individually or collectively in excess of $250,000 (other than Inventory in transit not covered by a Document or Inventory in the possession of a carrier or similar bailee as to which the provisions of Section 4.04 of this Agreement have been complied with and other than consignment inventory in the possession of customers) is in the possession or control of any Person (other than a Grantor) asserting any claim thereto or security interest therein, except that the Collateral Agent (on behalf of itself and the other Secured Parties) or its designees, may have possession and/or control of Control Collateral as contemplated hereby and by the other Loan Documents and except that Inventory and/or Equipment may be in the possession of shippers, repairmen, vendors performing assembly services and Persons performing similar services in the ordinary course of business of the Grantors in connection with the provision of such services and except for customary rights of landlords at leased locations and bailees at warehouse locations.
Section 3.03.Validity, Perfection and Priority of Security Interests.
(a)The Security Interests granted in favor of the Collateral Agent for the benefit of the Secured Parties constitute legal and valid security interests in all of the Collateral securing the Obligations.
(b)When Uniform Commercial Code financing statements stating that the same covers "all assets of the Grantor", "all personal property of the Grantor" or words of similar import shall have been filed in the offices specified in Schedule 4.01 hereto, the Security Interests will constitute a Requisite Priority Security in all right, title and interest of such Grantor in the Collateral to the extent that a security interest therein may be perfected by filing pursuant to the Uniform Commercial Code of each applicable jurisdiction.
(c) When each Patent and Trademark Security Agreement has been filed with the United States Patent and Trademark Office and each Copyright Security Agreement has been filed with the United States Copyright Office, if applicable, the Security Interests will constitute a Requisite Priority Security in all right, title and interest of such Grantor in the Recordable Intellectual Property therein described to the extent that a security interest therein may be perfected by such filing pursuant to applicable law.
(d)When each Account Control Agreement, if applicable, has been executed and delivered to the Collateral Agent, the Security Interests will constitute a Requisite Priority Security in all right, title and interest of the Grantors in the Deposit Accounts and Securities Accounts, as applicable, subject thereto.
(e)So long as such Grantor is in compliance with the provisions of Section 4.11, if applicable, the Security Interests shall constitute a Requisite Priority Security in all right, title and interest of such Grantor in all Electronic Chattel Paper.
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(f)Upon Delivery of the Pledged Collateral, if applicable, the Security Interests shall constitute a Requisite Priority Security in all right, title and interest of such Grantor in all Pledged Collateral.
Section 3.04.Receivables. With respect to each Receivable of such Grantor, all records, papers and documents relating thereto (if any) are genuine and in all material respects what they purport to be, and all papers and documents (if any) relating thereto (i) represent legal, valid and binding obligations of the respective Account Debtor, subject to adjustments customary in the business of such Grantor, with respect to unpaid indebtedness or other monetary obligations incurred by such Account Debtor in respect of the performance of labor or services, the sale, lease, license, assignment, exchange and delivery of the merchandise or other property listed therein, the incurrence of a secondary obligation as set forth therein or the use of a credit or charge card or information contained on or for use with such a card or any combination of the foregoing, and (ii) are the only original writings evidencing and embodying such obligations of the Account Debtor named therein (other than copies created for general accounting purposes) and are in material compliance with all applicable federal, state and local laws and applicable laws of any relevant foreign jurisdiction.
Section 3.05.No Consents. No consent of any other Person (including, without limitation, any member, stockholder or creditor of such Grantor or any of its subsidiaries) and no order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any Governmental Authority is required to be obtained by such Grantor in connection with the execution, delivery or performance of this Agreement, or in connection with the exercise of the rights and remedies of the Collateral Agent pursuant to this Agreement, except (i) as has been obtained, (ii) as contemplated by Section 3.03 or (iii) in connection with the disposition of the Collateral by laws affecting the offering and sale of securities generally.
Section 3.06.Deposit and Securities Accounts. Schedule 3.06 (as such schedule may be amended or supplemented from time to time) sets forth a complete and correct list of each Grantor's Deposit Accounts and Securities Accounts, the name and address of the financial institution which maintains each such account, the purpose for which such account is used, whether such account is an Exempt Deposit Account and certain additional related information with respect such Securities Accounts.
Section 3.07.Commercial Tort Claims. Except as set forth on Schedule 1.02 (as such schedule may be amended or supplemented from time to time), no Grantor possesses any Commercial Tort Claims with a value (as reasonably determined by the applicable Grantor) in excess of $500,000.
Section 3.08.Intellectual Property. Schedule 3.08 (as such schedule may be amended or supplemented from time to time) sets forth a complete and correct list of all of the Copyrights, Patents, Trademarks and Trademark Licenses, Copyright Licenses and Patent Licenses held by any Grantor, including the name of the registered owner or applicant and the registration, application, or publication number, as applicable, of each Patent, Trademark or Copyright owned by each Grantor.
Section 3.09.Pledged Collateral.
(a)Schedule 3.09 (as such schedule may be amended or supplemented from time to time) sets forth (i) the name and jurisdiction of organization of, and the ownership interest (including percentage owned and number of shares, units or other equity interests) of each Grantor in, the Stock, LLC Interests and Partnership Interests issued by each of such Grantor's subsidiaries, (ii) all other Stock, LLC Interests and Partnership Interests held by such Grantor (including percentage owned and number of shares, units or other equity interests), and (iii) the issuer, date of issuance and amount of all promissory notes owned or held by such Grantor. Such Grantor holds all such Collateral directly (i.e., not through a subsidiary, Securities Intermediary or any other Person).
(b)All Pledged Collateral has been duly authorized and validly issued, is fully paid and non-assessable, to the extent applicable, and is subject to no options to purchase or similar rights of any Person. Except as set forth on Schedule 3.09 as of the date hereof, (i) such Pledged Collateral constitutes 100% of the issued and outstanding shares of capital stock or other equity interests of the respective issuers thereof, (ii) no issuer of Pledged Collateral has outstanding any security convertible into or exchangeable for any shares of its capital stock or other equity interests or any warrant,
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option, convertible security, instrument or other interest entitling the holder thereof to acquire any such shares or any security convertible into or exchangeable for such shares, (iii) there are no voting trusts, stockholder agreements, proxies or other agreements in effect with respect to the voting or transfer of such shares of its capital stock and (iv) other than to the extent constituting a Permitted Lien there are no Security or agreements, arrangements or obligations to create or give any Security relating to any such shares of capital stock. No Grantor is now or will become a party to or otherwise bound by any agreement, other than this Agreement and the other Loan Documents, which restricts in any adverse manner the rights of the Collateral Agent or any other present or future holder of any Collateral with respect thereto.
Section 3.10.Insurance. Schedule 3.10 (as such schedule may be amended or supplemented from time to time) sets forth a true and correct list of all of the insurance policies of such Grantor.
Section 3.11.Letter-of-Credit Rights. Except as set forth on Schedule 3.11 (as such schedule may be amended or supplemented from time to time), no Grantor possesses any Letter of Credit in excess of $500,000 issued in favor of such Grantor, as beneficiary thereunder.
Section 3.12.Other Collateral . Except as set forth on Schedule 3.12 (as such schedule may be amended or supplemented from time to time), no Grantor owns or holds any of the following types of property: (a) agreements and contracts with any Governmental Authority, (b) aircraft or airplanes, (c) ships or boat vessels, (d) rolling stock or trains or (e) oil, gas, minerals or As-Extracted Collateral.
ARTICLE IV
COVENANTS
COVENANTS
Each Grantor covenants and agrees that until the Discharge Date, such Grantor will comply with the following:
Section 4.01.Deliveries. Such Grantor shall (i) within three (3) Business Days after the date of this Agreement (or such later date as may be agreed by the Collateral Agent in its sole discretion), comply with the requirements of Section 4.06 with respect to all Pledged Shares, Pledged Notes, Pledged LLC Interests and Pledged Partnership Interests included in the Collateral and specified on Schedule 3.09, (ii) use commercially reasonable efforts to deliver to the Collateral Agent within ninety (90) days after the date of this Agreement (or such later date as may be agreed by the Collateral Agent in its sole discretion), a fully executed Account Control Agreement with respect to each of its Deposit Accounts (other than Exempt Deposit Accounts) and Securities Accounts specified in Schedule 3.06, (iii) deliver to the Collateral Agent insurance certificates, on or prior to the date of this Agreement, and related endorsements, within forty five (45) days after the date of this Agreement (or such later date as may be agreed by the Collateral Agent), evidencing such Grantor's compliance with Section 4.14, (iv) on or prior to the date of this Agreement, deliver to the Collateral Agent a fully executed consent in form and substance acceptable to the Collateral Agent with respect to each of its Letter-of-Credit Rights (other than those that constitute Supporting Obligations), (v) on or prior to the date of this Agreement execute and deliver a Copyright Security Agreement and a Patent and Trademark Security Agreement, as applicable, in respect of the Recordable Intellectual Property specified in Schedule 3.08, and (vi) within ten (10) days in the case of Uniform Commercial Code financing statements and within thirty (30) days in all other cases, following the date of this Agreement cause all filings and recordings specified in Schedule 4.01 to have been completed and deliver evidence thereof to the Collateral Agent in form reasonably acceptable to the Collateral Agent.
Section 4.02.Change of Name, Identity, Structure or Location; Subjection to Other Security Agreements. Such Grantor will not change its name, identity, structure, location of its chief executive office or location (determined as provided in Section 9-307 of the UCC) in any manner, and shall not become bound, as provided in Section 9-203(d) of the UCC, by a security agreement entered into by another Person, in each case, unless it shall have given the Collateral Agent not less than fifteen (15) days' (or such shorter period as may be agreed by the Collateral Agent) prior written notice thereof. Each Grantor agrees to provide to the Collateral Agent, upon its reasonable request, the certified organizational documents reflecting any of the changes in the preceding sentence. Such Grantor shall not in any event change the location of any Collateral or its name, identity, structure or
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location (determined as provided in Section 9-307 of the UCC), if such change would (i) cause the Security Interests in any Collateral to lapse or cease to be perfected, or (ii) materially affect the value of, or the rights of the Collateral Agent in, any Collateral unless such Grantor has taken on or before the date of such change all actions necessary to ensure that (a) the Security Interests in the Collateral do not lapse or cease to be perfected and (b) the value of, and the rights of the Collateral Agent in, any Collateral are not materially affected.
Section 4.03.Further Actions. Such Grantor will, from time to time at its expense and in such manner and form as the Collateral Agent may reasonably request, execute, deliver, file and record or authorize the recording of any financing statement, specific assignment, instrument, document, agreement or other paper and take any other action (including, without limitation, any filings of financing or continuation statements under the Uniform Commercial Code and any filings with the United States Patent and Trademark Office and the United States Copyright Office) that from time to time may be necessary or advisable under the UCC or with respect to Recordable Intellectual Property, or that the Collateral Agent may reasonably request, in order to create, preserve, perfect, confirm or validate the Security Interests or to enable the Collateral Agent and the Secured Parties to obtain the full benefit of this Agreement or to exercise and enforce any of its rights, powers and remedies created hereunder or under applicable law with respect to any of the Collateral. Such Grantor shall maintain the Security Interests as a Requisite Priority Security, and shall defend such Security Interests as Requisite Priority Security against the claims and demands of all Persons to the extent adverse to such Grantor's ownership rights or otherwise inconsistent with this Agreement or the other Loan Documents. Each Grantor hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file, in the name of such Grantor or otherwise and without the signature or other separate authorization or authentication of such Grantor appearing thereon, such Uniform Commercial Code financing statements or continuation statements as the Collateral Agent may reasonably deem necessary or appropriate to further perfect or maintain the perfection of the Security Interests. Such Grantor hereby authorizes the Collateral Agent to file financing and continuation statements describing the Collateral covered thereby as "all assets now owned or hereafter acquired by the Grantor or in which the Grantor otherwise has rights" or words to similar effect, notwithstanding that such description may be broader in scope than the Collateral described in this Agreement. Each Grantor also hereby irrevocably authorizes the Collateral Agent to file filings with the United States Patent and Trademark Office or the United States Copyright Office (or any successor office or any similar office in any other country), including this Agreement, each Copyright Security Agreement and each Patent and Trademark Security Agreement, or other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by such Grantor hereunder. Notwithstanding anything to the contrary contained in this Agreement or the other Loan Documents, no Grantor shall be required to take any action in, or required by the laws of, any jurisdiction (other than in the United States of America, any state thereof and the District of Columbia) to create a security interest in or to perfect any security interest in any Collateral, including in equity interests of Foreign Subsidiaries or any intellectual property rights (it being understood that (i) there shall be no security documents governed by the Laws of any jurisdiction (other than in the United States of America, any state thereof and the District of Columbia) and (ii) there shall be no requirement of any Grantor to make any filings or take any action in any office in any foreign jurisdiction, including with respect to foreign intellectual property).
Section 4.04.Collateral in Possession of Other Persons, Leased Real Property Locations. If any of such Grantor's Collateral having a value individually or collectively in excess of $500,000 is at any time in the possession or control of any warehouseman, vendor, bailee or any agents or processors of any Grantor, such Grantor shall promptly (and in any event within thirty (30) days of the date hereof or, if such possession or control occurs after the date hereof, the date on which such possession or control shall have occurred, or such longer period agreed to by the Collateral Agent) (i) notify such warehouseman, vendor, bailee, agent or processor of the Security Interests created hereby, (ii) instruct such warehouseman, vendor, bailee, agent or processor to hold all such Collateral for the Collateral Agent's account and subject to the Collateral Agent's instructions, (iii) use commercially reasonable efforts to cause such warehouseman, vendor, bailee, agent or processor to authenticate a record acknowledging that it holds possession of such Collateral for the benefit of the Collateral Agent and the Secured Parties, and (iv) make such authenticated record available to the Collateral Agent. Such Grantor agrees that if any warehouse receipt or receipt in the nature of a warehouse receipt is issued with respect to any of its Inventory, such warehouse receipt or receipt in the nature thereof shall not be "negotiable" (as such term is used in Section 7-104 of the Uniform
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Commercial Code as in effect in any relevant jurisdiction or under other relevant law). If any Grantor enters into any lease of real estate after the date hereof, it shall promptly (and in any event within thirty (30) days or such longer period agreed to by the Collateral Agent) notify the Collateral Agent thereof and at the request of the Collateral Agent, such Grantor will use commercially reasonable efforts to obtain waivers from the landlords of all such real estate in form and substance as shall be reasonably acceptable to the Collateral Agent. Nothing in this Section 4.04 shall prohibit the delivery of consigned goods to customers in the ordinary course of business.
Section 4.05.Books and Records; Receivables. Such Grantor shall keep full and accurate books and records relating to the Collateral, including, but not limited to, the originals of all documentation with respect thereto, records of all payments received, all credits granted thereon, all merchandise returned and all other dealings therewith. Such Grantor shall not, other than in the ordinary course of business consistent with past practice, or as otherwise permitted in the Credit Agreement, (i) grant any extension of the time of payment of any Receivable, (ii) compromise or settle any Receivable for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any Receivable or (iv) allow any credit or discount whatsoever on any Receivable.
Section 4.06.Delivery of Certificated Securities, Uncertificated Securities, Instruments, Etc.
(a)All Pledged Collateral (other than (i) promissory notes having individually a face value not in excess of $500,000, (ii) Cash Equivalents held in a Deposit Account or a Securities Account that is subject to an effective Account Control Agreement to the extent required by Section 4.10 hereof, or that are held in an Exempt Deposit Account, (iii) checks and drafts received for collection in the ordinary course of business and (iv) that which it is otherwise entitled to receive and retain pursuant to Section 5.01 hereof shall be Delivered to and held by the Collateral Agent, appropriately indorsed (within the meaning of Section 8-107 of the UCC)), or accompanied by share transfer powers or other instruments of transfer duly endorsed by such an effective indorsement, in each case, to the Collateral Agent or in blank. To the extent permitted by applicable law, the Collateral Agent shall have the right upon the occurrence of an Event of Default, and upon notice to any Grantor, to cause any or all of the Pledged Collateral to be transferred of record into the name of the Collateral Agent or its nominee. Each Grantor will promptly give the Collateral Agent copies of any material written notices or other material written communications received by it with respect to Pledged Collateral registered in the name of such Grantor.
(b)Each LLC Interest and Partnership Interest included in the Collateral and that constitutes a Certificated Security shall constitute and shall remain a "security" within the meaning of, and governed by, Article 8 of the Uniform Commercial Code as in effect from time to time in the state of organization of each issuer thereof, and each issuer of such LLC Interests and Partnership Interests has ensured, or will ensure, that its limited liability agreement, partnership agreement or other applicable organizational documents governing LLC Interests and Partnership interests issued by it expressly provides that each such interest is and will remain a "security" within the meaning of, and governed by, Article 8 of the UCC. No agreement or organizational document with respect to any Pledged Collateral evidencing ownership interests in a subsidiary of a Grantor providing (i) that any such interest is and will remain a security under Article 8 of the UCC, (ii) that such interests are represented by a certificate (in which the Collateral Agent's security interest has been or is required to be perfected pursuant to clause (i) of the definition of "Delivery" in Section 1.03), or (iii) that such interests are not represented by a certificate (in which the Collateral Agent's security interest has been or is required to be perfected pursuant to clause (ii) of the definition of "Delivery" in Section 1.03), shall be amended, modified or supplemented to provide otherwise without the prior written consent of the Collateral Agent.
(c)Without the prior written consent of the Collateral Agent, it shall not vote to enable or take any other action to: (i) other than as expressly permitted under the Loan Documents, including Section 4.02, amend or terminate any partnership agreement, limited liability company agreement, certificate of incorporation, by-laws or other organizational documents in any way that adversely affects the validity, perfection, priority or enforceability of the Collateral Agent's Security Interest therein, (ii) except as provided in Section 4.06(d), permit any issuer of any Pledged Collateral to issue any additional stock, partnership interests, limited liability company interests or other equity interests
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of any nature or to issue securities convertible into or granting the right of purchase or exchange for any stock or other equity interest of any nature of such issuer, (iii) other than as expressly permitted under the Loan Documents, permit any issuer of any Pledged Collateral to dispose of all or a material portion of its assets, (iv) waive any default under or breach of any terms of organizational document relating to the issuer of any Pledged Collateral, or (v) cause any issuer of any Partnership Interests or LLC Interests included in the Collateral of such Grantor which are not securities (for purposes of the UCC) on the date hereof to elect or otherwise take any action to cause such Partnership Interests or LLC Interests to be treated as securities for purposes of the UCC; provided, however, notwithstanding the foregoing, if any issuer of any Partnership Interests or LLC Interests included in the Collateral takes any such action in violation of the foregoing in this clause (v), such Grantor shall promptly notify the Collateral Agent in writing of any such election or action and, in such event, shall comply with the delivery requirements of clause (i) or clause (ii), as applicable, of the definition of "Delivery" in Section 1.03.
(d)Except to the extent otherwise permitted under the Credit Agreement, such Grantor will cause each issuer of the Pledged Collateral that is a subsidiary of such Grantor not to issue any stock, other securities, limited liability company membership interests, partnership interests, promissory notes or other Instruments in addition to or in substitution for the Pledged Collateral issued by such issuer (in each case to the extent that such items constitute Collateral), except to such Grantor and, in the event that any issuer of Collateral at any time issues any additional or substitute stock, other securities, limited liability company membership interests, partnership interests, promissory notes or other Instruments to such Grantor, such Grantor will promptly (and in any event within thirty (30) days or such longer period agreed to by the Collateral Agent) Deliver all such items (in each case to the extent that such items constitute Collateral) to the Collateral Agent to hold as Collateral hereunder together with a certificate executed by an authorized officer of such Grantor describing such Pledged Shares, Pledged LLC Interests, Pledged Partnership Interests and/or Pledged Notes, attaching such supplements to Schedule 3.09 as are necessary to cause such Schedule to be complete and accurate at such time.
Section 4.07.Notification to Account Debtors. Upon the occurrence of an Event of Default and if so requested by the Collateral Agent, such Grantor will promptly notify (and such Grantor hereby authorizes the Collateral Agent after the occurrence of any Event of Default so to notify) each Account Debtor in respect of any Receivable that such Collateral has been assigned to the Collateral Agent for the benefit of the Secured Parties, and that any payments due or to become due in respect of such Collateral are to be made by such Account Debtor and any other Person via direct wire transfer directly to the Collateral Agent or any other designee on its behalf.
Section 4.08.Information Regarding Collateral. Such Grantor will, promptly upon request, provide to the Collateral Agent all information and evidence it may reasonably request concerning the Collateral to enable the Collateral Agent to enforce the provisions of this Agreement.
Section 4.09.Covenants Regarding Intellectual Property.
(a)Such Grantor (either itself or through licensees) will, for each Patent which such Grantor determines in its reasonable business judgment is material to the conduct of such Grantor's business, not do any act, or omit to do any act, whereby any such Patent becomes invalidated or dedicated to the public, and shall use commercially reasonable efforts to mark any products covered by any such Patent with the relevant patent number or indication that a Patent is pending as required by the patent laws.
(b)Such Grantor (either itself or, if permitted by law, through its licensees or its sublicensees) will, for each Trademark which such Grantor determines in its reasonable business judgment is material to the conduct of such Grantor’s business, (i) maintain such Trademark in full force free from any claim of abandonment or invalidity from non-use, material alteration, naked licensing or genericide, (ii) maintain the quality of products and services offered under such Trademark in a manner substantially consistent with or better than the quality of such products and services as of the date hereof, (iii) display such Trademark with proper notice, including notice of federal registration to the extent permitted by applicable law, (iv) not knowingly use or knowingly permit the use of such Trademark in violation of any third party rights, (v) not permit any assignment in gross of such Trademark and (vi) allow the Collateral Agent and its designees the right, upon
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reasonable notice, to inspect such Grantor's premises and to examine and observe such Grantor's books, records and operations, including, without limitation, its quality control processes, upon reasonable notice and at such reasonable times and as often as may be reasonably requested.
(c)Such Grantor (either itself or through licensees) will, for each work covered by a Copyright which such Grantor determines in its reasonable business judgment material to the conduct of its business, continue to publish, reproduce, display, adopt and distribute the work with appropriate copyright notice.
(d)Such Grantor shall promptly notify the Collateral Agent if it knows or has reason to know that any Patent, Trademark or Copyright (or any application or registration relating thereto) which such Grantor determines in its reasonable business judgment is material for the conduct of such Grantor's business may become abandoned or dedicated to the public, or of any material, adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court, other than office actions or similar proceedings issued in the ordinary course) regarding such Grantor's ownership of any such Patent, Trademark or Copyright, its right to register the same or to keep, use or maintain the same.
(e)Such Grantor will take commercially reasonable steps to file, maintain and pursue each application relating to the Patents, Trademarks and/or Copyrights (and to obtain the relevant grant or registration) which such Grantor determines in its reasonable business judgment are material for the conduct of such Grantor's business and to preserve and maintain all material common law rights in any such Trademarks and each registration of such Patents, Trademarks and Copyrights, including filing and paying fees for applications for renewal, reissues, divisions, continuations, continuations-in-part, affidavits of use, affidavits of incontestability and maintenance, and, unless such Grantor shall reasonably determine that any such action would be of negligible economic value, to initiate opposition, interference, reexamination and cancellation proceedings against third parties.
(f)If any rights to any Patent, Trademark, Copyright or License relating thereto which such Grantor determines in its reasonable business judgment are material for the conduct of such Grantor's business is believed infringed, misappropriated, breached or diluted by a third party, such Grantor shall, unless such Grantor shall reasonably determine that any such action would be of negligible economic value, take commercially reasonable actions to enforce such Patent, Trademark, Copyright or License, including where deemed necessary by such Grantor, to sue for infringement, misappropriation, breach or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and take such other actions as such Grantor shall reasonably deem appropriate under the circumstances to protect such Patent, Trademark, Copyright or License.
(g)At the request of the Collateral Agent (which shall not be made more than once in any fiscal year of a Grantor, unless an Event of Default has occurred and is continuing), such Grantor will (i) inform the Collateral Agent of (a) all applications for Patents, Trademarks or Copyrights filed during such fiscal year by such Grantor or by any agent, employee, licensee or delegate on its behalf with the United States Patent and Trademark Office or the United States Copyright Office or any office or agency in any political subdivision of the United States or in any other country or any political subdivision thereof, and (b) all acquired registered Patents, Trademarks or Copyrights, or applications therefor, and (ii) as soon as reasonably practicable (and in any event within sixty (60) days or such longer period agreed to by the Collateral Agent) upon request of the Collateral Agent, execute any and all agreements, instruments, documents and papers as the Collateral Agent may reasonably request to evidence the Security Interests in such application, any such Patent, Trademark or Copyright and the goodwill or accounts and general intangibles of such Grantor relating thereto or represented thereby, and such Grantor hereby appoints the Collateral Agent its attorney-in-fact to execute and file such writings for the foregoing purposes.
(h)As to all Licenses which such Grantor determines in its reasonable business judgment are material to the conduct of such Grantor's business and entered with any third party licensor, such Grantor will use commercially reasonable and good faith efforts to, as soon as reasonably practicable, obtain all requisite consents or approvals by the licensor to effect the assignment of all of such Grantor's right, title and interest thereunder to the Collateral Agent or its designee and to effect the sub-license contemplated under Section 6.03(e) upon the occurrence of an Event of Default, and such
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Grantor shall provide written notice to the Collateral Agent upon failure to obtain any such consent or approval.
(i)Such Grantor shall take all actions (and cause all other Persons, including licensees, to the extent such other Persons are subject to its control to take such actions) which are necessary or advisable and reasonably requested by the Collateral Agent to protect, preserve and confirm the validity, priority, perfection or enforcement of the rights granted to the Collateral Agent under this Agreement. Such Grantor will use commercially reasonable efforts so as not to permit the inclusion in any contract or agreement governing or relating to any Trademarks, Patents or Copyrights obtained after the date hereof or any license agreements entered into after the date hereof relating to any of the foregoing of any provisions that could or might in any way impair or prevent the creation of a security interest in, or the assignment of, such Grantor's rights and interests therein.
Section 4.10.Deposit Accounts and Securities Accounts. Except as expressly provided in Section 4.01 hereto, no Grantor shall establish after the date hereof or permit to exist any Deposit Account (other than Exempt Deposit Accounts) or any Securities Account, in each case without promptly (and in any event, within ninety (90) days after establishing such Deposit Account, or such longer period as may be agreed by the Collateral Agent in its sole discretion) using commercially reasonable efforts to deliver to the Collateral Agent a fully executed Account Control Agreement with respect to such account. Subject to the rights of the Collateral Agent under Article VI hereof, each Grantor shall cause all Proceeds of Collateral hereunder to be deposited in a Deposit Account maintained with the Collateral Agent or with respect to which an effective Account Control Agreement has been delivered to the Collateral Agent.
Section 4.11.Electronic Chattel Paper. If requested by the Collateral Agent, such Grantor shall promptly (and in any event within thirty (30) days (or such longer period agreed to by the Collateral Agent) of the date hereof or, if later, of acquiring any Electronic Chattel Paper) create, store and otherwise maintain all records comprising Electronic Chattel Paper with a value in excess of $100,000 in the manner contemplated in Section 9-105 of the UCC such that: (i) a single authoritative copy of each such record exists which is unique, identifiable and, except as provided in subclause (iv) below, unalterable, (ii) the authoritative copy of each such record shall identify the Collateral Agent as an assignee thereof, (iii) the authoritative copy of each such record is communicated to and maintained by the Collateral Agent or its designee, (iv) copies or revisions that add or change any assignees of such record can be made only with the participation of the Collateral Agent, (v) each copy (other than the authoritative copy) of such record is readily identifiable as a copy and (vi) any revision of the authoritative copy of such record is readily identifiable as an authorized or unauthorized revision.
Section 4.12.Commercial Tort Claims. In the event any Commercial Tort Claim of a Grantor in excess of $500,000 arises or otherwise becomes known after the date hereof, the applicable Grantor will promptly and within thirty (30) days from the date thereof (or such longer period agreed to by the Collateral Agent) deliver to the Collateral Agent a supplement to Schedule 1.02 hereto describing such Commercial Tort Claim and expressly subjecting such Commercial Tort Claim, all Judgments and/or Settlements with respect thereto and all Proceeds thereof to the Security Interests hereunder.
Section 4.13.Letter-of-Credit-Rights. If any Letter-of-Credit Rights in excess of $500,000 are hereafter acquired by any Grantor (other than those which constitute Supporting Obligations) such Grantor shall promptly and within thirty (30) days from the date thereof (or such longer period agreed to by the Collateral Agent) notify the Collateral Agent thereof and, at the request of the Collateral Agent, the applicable Grantor will deliver or cause to be delivered to the Collateral Agent a fully executed consent with respect thereto in form and substance reasonably acceptable to the Collateral Agent.
Section 4.14.Insurance. Each Grantor shall cause each (i) Insurance Policy that is a liability policy to name the Collateral Agent as an additional insured thereunder as its interests may appear and (ii) Insurance Policy that is a casualty insurance policy covering Collateral to contain a loss payable clause or endorsement, reasonably satisfactory to the Collateral Agent, that names the Collateral Agent as the loss payee thereunder. Each Grantor will collect all amounts payable to it under any Insurance Policy and shall, prior to an Event of Default, be entitled to receive and retain all
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such amounts, subject to the terms of the Credit Agreement and, following an Event of Default, pay such amounts into a Deposit Account that is subject to an effective Account Control Agreement, and, pending that payment, hold those proceeds on trust for the Collateral Agent.
ARTICLE V
DISTRIBUTIONS ON PLEDGED COLLATERAL; VOTING.
DISTRIBUTIONS ON PLEDGED COLLATERAL; VOTING.
Section 5.01.Right to Receive Distributions on Collateral; Voting.
(a)Except to the extent prohibited by any Loan Document, so long as no Event of Default has occurred and is continuing:
(i)Each Grantor shall be entitled to exercise any and all voting, management, administration and other consensual rights pertaining to the Pledged Collateral or any part thereof for any purpose not inconsistent with the terms of this Agreement and the other Loan Documents; provided, however, that no Grantor shall exercise or refrain from exercising any such right if, in the Collateral Agent's reasonable judgment, such action would be materially adverse to the interests of the Collateral Agent and the other Secured Parties under this Agreement.
(ii)Each Grantor shall be entitled to receive and retain any and all dividends, interest, distributions, cash, instruments and other payments and distributions made upon or in respect of the Pledged Collateral; provided, however, that any and all dividends, interest and other payments and distributions paid or payable (other than in cash) in respect of, and instruments and other property received, receivable or otherwise distributed in respect of, or in exchange for, any Collateral shall be received by any Grantor in trust for the benefit of the Collateral Agent, be segregated from the other property or funds of such Grantor and be forthwith Delivered, in the same form as so received, to the Collateral Agent or its nominee or custodian to hold as Collateral to the extent required hereunder.
(b)The Collateral Agent shall, upon receiving a written request from any Grantor accompanied by a certificate signed by an authorized officer of such Grantor stating that no Event of Default has occurred, execute and deliver (or cause to be executed and delivered) to such Grantor or as specified in such request all proxies, powers of attorney, consents, ratifications and waivers and other instruments as such Grantor may reasonably request for the purpose of enabling such Grantor to exercise the voting and other rights which it is entitled to exercise pursuant to paragraph (A) above and to receive the dividends, interest, distributions, cash, instruments or other payments or distributions which it is authorized to receive and retain pursuant to paragraph (B) above in respect of any of the Pledged Collateral which is registered in the name of the Collateral Agent or its nominee.
(c)Upon the occurrence of an Event of Default:
(i)All rights of each Grantor to receive the dividends, interest, distributions, cash, instruments and other payments and distributions which it would otherwise be authorized to receive and retain pursuant to Section 5.01(a)(ii) shall immediately cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall thereupon have the sole right to receive and hold as Collateral such dividends, interest, distributions, cash, instruments and other payments and distributions.
(ii)All dividends, interest, distributions, cash, instruments and other payments and distributions which are received by any Grantor contrary to the provisions of paragraph (A) of this Section 5.01(c) shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Grantor and shall be forthwith Delivered, in the same form as so received to the Collateral Agent or its nominee or custodian to hold as Collateral.
(d)Upon the occurrence of an Event of Default, all rights of such Grantor to exercise the voting, management, administration and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 5.01(a)(i) shall immediately cease, all such rights shall thereupon become vested in the Collateral Agent, who shall thereupon have the sole right to exercise such voting
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and other consensual rights. Each Grantor shall, at its sole cost and expenses, from time to time execute and deliver to the Collateral Agent appropriate instruments as the Collateral Agent may request in order to permit the Collateral Agent to exercise the voting and other rights which it may be entitled to exercise pursuant to this Section 5.01(d) and to receive all dividends, interest, distributions, cash, instruments and other payment and distributions pursuant to Section 5.01(c).
ARTICLE VI
GENERAL AUTHORITY; REMEDIES
GENERAL AUTHORITY; REMEDIES
Section 6.01.General Authority. Each Grantor hereby irrevocably appoints the Collateral Agent and any officer, employee or agent thereof as its true and lawful attorney-in-fact, with full power of substitution and delegation, in the name of such Grantor, the Collateral Agent, the Secured Parties, or otherwise, for the sole use and benefit of the Collateral Agent and the Secured Parties, but at such Grantor's expense, to the extent not prohibited by applicable law, to exercise at any time and from time to time (i) after an Event of Default has occurred or (ii) if the relevant Grantor has failed to comply with any further assurance or perfection obligation hereunder within fifteen (15) Business Days of being notified of that failure and being requested to comply in writing, all or any of the following powers with respect to all or any of the Collateral, all acts of such attorney being hereby ratified and confirmed; such power, being coupled with an interest, is irrevocable until the Discharge Date:
(a)to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to carry out the terms of this Agreement;
(b)to receive, take, indorse, assign and deliver any and all checks, notes, drafts, acceptances, documents and other negotiable and non-negotiable Instruments taken or received by such Grantor as, or in connection with, the Collateral;
(c)to accelerate any Receivable which may be accelerated in accordance with its terms, and to otherwise demand, sue for, collect, receive and give acquittance for any and all monies due or to become due on or by virtue of any Collateral;
(d)to commence, settle, compromise, compound, prosecute, defend or adjust any claim, suit, action or proceeding with respect to, or in connection with, the Collateral;
(e)to sell, transfer, assign or otherwise deal in or with the Collateral or the Proceeds or avails thereof, including, without limitation, for the implementation of any assignment, lease, License, sublicense, grant of option, sale or other disposition of any Intellectual Property or any action related thereto, as fully and effectually as if the Collateral Agent were the absolute owner thereof;
(f)to extend the time of payment of any or all of the Collateral and to make any allowance and other adjustments with respect thereto;
(g)to vote all or any part of the Pledged Collateral (whether or not transferred into the name of the Collateral Agent) and give all consents, waivers and ratifications in respect of the Collateral; and
(h)to do, at its option, but at the expense of the Grantors, at any time or from time to time, all acts and things which the Collateral Agent deems necessary to protect or preserve the Collateral and to realize upon the Collateral.
Section 6.02.Authority of the Collateral Agent. The rights, duties, privileges, immunities and indemnities of the Collateral Agent hereunder are subject to the provisions of the Credit Agreement.
Section 6.03.Remedies upon an Event of Default.
(a)If any Event of Default has occurred, the Collateral Agent may, in addition to all other rights and remedies granted to it in this Agreement and in any other agreement securing, evidencing or relating to the Obligations (including, without limitation, the right to give instructions or a notice of sole control under an Account Control Agreement): (i) exercise on behalf of the Secured Parties all rights and remedies of a secured party on default under the UCC (whether or not the UCC applies to
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the affected Collateral) and, in addition, (ii) without demand of performance or other demand or notice of any kind (except as herein provided or as may be required by mandatory provisions of law) to or upon any Grantor or any other Person (all of which demands and/or notices are hereby waived by each Grantor), (A) give notice and take sole possession and control of all amounts on deposit in or credited to any Deposit Account or Securities Account pursuant to the related Account Control Agreement and apply all such funds as specified in Section 6.06 and (B) if there shall be no such cash or if such cash, and other amounts shall be insufficient to pay all the Obligations in full or cannot be so applied for any reason or if the Collateral Agent determines to do so, collect, receive, appropriate and realize upon the Collateral and/or sell, assign, give an option or options to purchase or otherwise dispose of and deliver the Collateral (or contract to do so) or any part thereof at public or private sale, at any office of the Collateral Agent or elsewhere in such manner as is commercially reasonable and as the Collateral Agent may deem best, for cash, on credit or for future delivery, without assumption of any credit risk and at such price or prices as the Collateral Agent may deem satisfactory.
(b)The Collateral Agent or any other Secured Party may be the purchaser of any or all of the Collateral at any public or private (to the extent the portion of the Collateral being privately sold is of a kind that is customarily sold on a recognized market or the subject of widely distributed standard price quotations) sale in accordance with the UCC and the Collateral Agent, as collateral agent for and representative of the Secured Parties, shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such sale made in accordance with the UCC, to use and apply any of the Obligations as a credit on account of the purchase price for any Collateral payable by the Collateral Agent at such sale. Each purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by applicable law) all rights of redemption, stay and/or appraisal which it now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. Each Grantor agrees that, to the extent notice of sale shall be required by law, at least ten (10) days' notice to such Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Collateral Agent shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor agrees that it would not be commercially unreasonable for the Collateral Agent to dispose of the Collateral or any portion thereof by using internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets. Each Grantor hereby waives any claims against the Collateral Agent arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if the Collateral Agent accepts the first offer received and does not offer such Collateral to more than one offeree. If the proceeds of any sale or other disposition of the Collateral are insufficient to pay all the Obligations, the Grantors shall be liable for the deficiency and the fees of any attorneys employed by the Collateral Agent to collect such deficiency. Each Grantor further agrees that a breach of any of the covenants contained in this Section will cause irreparable injury to the Collateral Agent, that the Collateral Agent has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no default has occurred giving rise to the Obligations becoming due and payable prior to their stated maturities. Nothing in this Section shall in any way limit the rights of the Collateral Agent hereunder.
(c)The Collateral Agent may sell the Collateral without giving any warranties as to the Collateral. The Collateral Agent may specifically disclaim or modify any warranties of title or the like. This procedure will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.
(d)For the purpose of enforcing any and all rights and remedies under this Agreement, the Collateral Agent may, if any Event of Default has occurred and is continuing: (i) require each Grantor to, and each Grantor agrees that it will, at its expense and upon the request of the Collateral Agent, forthwith assemble, store and keep all or any part of the Collateral as directed by the Collateral Agent and make it available at a place designated by the Collateral Agent which is, in the Collateral
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Agent's opinion, reasonably convenient to the Collateral Agent and such Grantor, whether at the premises of such Grantor or otherwise, it being understood that such Grantor's obligation so to deliver the Collateral is of the essence of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction, the Collateral Agent shall be entitled to a decree requiring specific performance by such Grantor of such obligation; (ii) to the extent permitted by applicable law, enter, with or without process of law and without breach of the peace, any premise where any of the Collateral is or may be located, and without charge or liability to any Grantor, seize and remove such Collateral from such premises; (iii) have access to and use such Grantor's books and records relating to the Collateral; and (iv) prior to the disposition of the Collateral, store or transfer it without charge in or by means of any storage or transportation facility owned or leased by such Grantor, process, repair or recondition it or otherwise prepare it for disposition in any manner and to the extent the Collateral Agent deems appropriate and, in connection with such preparation and disposition, use without charge any Intellectual Property or technical process used by such Grantor. The Collateral Agent may also render any or all of the Collateral unusable at any Grantor's premises and may dispose of such Collateral on such premises without liability for rent or costs.
(e)For the purpose of enabling the Collateral Agent, during the continuance of an Event of Default, to exercise rights and remedies under this Section 6.03 at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, each Grantor hereby grants to the Collateral Agent, to the extent assignable, an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to such Grantor), subject, in the case of Trademarks, to sufficient rights to quality control and inspection in favor of such Grantor to avoid the risk of invalidation of such Trademarks, to use, assign, license or sublicense any of the Intellectual Property now owned or hereafter acquired, developed or created by such Grantor, wherever the same may be located. Such license shall include access to all media in which any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout hereof.
(f)Anything contained herein to the contrary notwithstanding, in addition to the other rights and remedies provided herein, upon the occurrence and during the continuation of an Event of Default:
(i)the Collateral Agent may license, or sublicense, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any Intellectual Property included in the Collateral throughout the world for such term or terms, on such conditions and in such manner as the Collateral Agent shall in its sole discretion determine;
(ii)the Collateral Agent may (without assuming any obligations or liability thereunder), at any time and from time to time, enforce (and shall have the exclusive right to enforce) against any licensee or sublicensee all rights and remedies of any Grantor in, to and under any License included in the Collateral and take or refrain from taking any action under any provision thereof, and each Grantor hereby releases the Collateral Agent and each of the other Secured Parties from, and agrees to hold the Collateral Agent and each of the other Secured Parties free and harmless from and against any claims arising out of, any lawful action so taken or omitted to be taken with respect thereto; and
(iii)upon request by the Collateral Agent, each Grantor will use its commercially reasonable efforts to obtain all requisite consents or approvals by the licensor or sublicensor of each License to effect the assignment of all of such Grantor's right, title and interest thereunder to the Collateral Agent or its designee and will execute and deliver to the Collateral Agent a power of attorney, in form and substance reasonably satisfactory to the Collateral Agent, for the implementation of any lease, assignment, License, sublicense, grant of option, sale or other disposition of any Intellectual Property included in the Collateral.
(g)If any Event of Default has occurred, the Collateral Agent, instead of exercising the power of sale conferred upon it pursuant to this Section 6.03, may proceed by a suit or suits at law or in equity to foreclose the Security Interests and sell the Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent jurisdiction, and may in addition institute and maintain such suits and proceedings as the Collateral Agent may deem appropriate to protect and enforce the rights vested in it by this Agreement.
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(h)If any Event of Default has occurred, the Collateral Agent may, to the extent permitted by applicable law, without notice to any Grantor or any party claiming through any Grantor, without regard to the solvency or insolvency at such time of any Person then liable for the payment of any of the Obligations, without regard to the then value of the Collateral and without requiring any bond from any complainant in such proceedings, be entitled as a matter of right to the appointment of a receiver or receivers (who may be the Collateral Agent) of the Collateral or any part thereof, and of the profits, revenues and other income thereof, pending such proceedings, with such powers as the court making such appointment shall confer, and to the entry of an order directing that the profits, revenues and other income of the property constituting the whole or any part of the Collateral be segregated, sequestered and impounded for the benefit of the Collateral Agent and the other Secured Parties, and each Grantor irrevocably consents to the appointment of such receiver or receivers and to the entry of such order.
(i)Each Grantor agrees, to the extent it may lawfully do so, that it will not at any time in any manner whatsoever claim or take the benefit or advantage of, any appraisal, valuation, stay, extension, moratorium, turnover or redemption law, or any law permitting it to direct the order in which the Collateral shall be sold, now or at any time hereafter in force which may delay, prevent or otherwise affect the performance or enforcement of this Agreement, and each Grantor hereby waives all benefit or advantage of all such laws to the extent permitted by law. Each Grantor covenants that it will not hinder, delay or impede the execution of any power granted to the Collateral Agent or any other Secured Party in any Loan Document.
(j)Each Grantor, to the extent it may lawfully do so, on behalf of itself and all who claim through or under it, including, without limitation, any and all subsequent creditors, vendees, assignees and lienors, waives and releases all rights to demand or to have any marshalling of the Collateral upon any sale, whether made under any power of sale granted herein or pursuant to judicial proceedings or under any foreclosure or any enforcement of this Agreement, and consents and agrees that all of the Collateral may at any such sale be offered and sold as an entirety.
(k)Each Grantor waives, to the extent permitted by law, presentment, demand, protest and any notice of any kind (except the notices expressly required hereunder or in the other Loan Documents) in connection with this Agreement and any action taken by the Collateral Agent with respect to the Collateral.
Section 6.04.Limitation on duty of Collateral Agent in respect of Collateral. Beyond the exercise of reasonable care in the custody thereof, none of the Collateral Agent or any other Secured Party shall have any duty to exercise any rights or take any steps to preserve the rights of any Grantor in the Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto, nor shall the Collateral Agent be liable to any Grantor or any other Person for failure to meet any obligation imposed by Section 9-207 of the UCC or any successor provision. Each Grantor agrees that the Collateral Agent shall not at any time be required to, nor shall the Collateral Agent or any other Secured Party be liable to any Grantor for any failure to, account separately to any Grantor for amounts received or applied by the Collateral Agent from time to time in respect of the Collateral pursuant to the terms of this Agreement. Without limiting the foregoing, the Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its own property, and shall not be liable or responsible for any loss or damage to any of the Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehouseman, carrier, forwarding agency, consignee or other agent or bailee selected by the Collateral Agent in good faith.
Section 6.05.Securities Act.
(a)In view of the position of any Grantor in relation to the Pledged Collateral, or because of other present or future circumstances, a question may arise under the Securities Act of 1933, as now or hereafter in effect, or any similar statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as from time to time in effect being herein called the "Federal Securities Laws") with respect to any disposition of the Pledged Collateral permitted hereunder. The Grantors understand that compliance with the Federal Securities Laws might very strictly limit the
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course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Pledged Collateral, and might also limit the extent to which or the manner in which any subsequent transferee of any Pledged Collateral could dispose of the same. Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Pledged Collateral under applicable Blue Sky or other state securities laws or similar laws analogous in purpose or effect. Without limiting the generality of the foregoing, the provisions of this Section 6.05 would apply if, for example, the Collateral Agent were to place all or any part of the Pledged Collateral for private placement by an investment banking firm, or if such investment banking firm purchased all or any part of the Pledged Collateral for its own account, or if the Collateral Agent placed all or any part of the Pledged Collateral privately with a purchaser or purchasers.
(b)Accordingly, the Grantors expressly agree that the Collateral Agent is authorized, in connection with any sale of any Pledged Collateral after an Event of Default, if it deems it advisable so to do, (i) to restrict the prospective bidders on or purchasers of any of the Pledged Collateral to a limited number of sophisticated investors who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or sale of any of such Pledged Collateral, (ii) to cause to be placed on certificates for any or all of the Pledged Collateral or on any other securities pledged hereunder a legend to the effect that such security has not been registered under the Securities Act of 1933 and may not be disposed of in violation of the provision of said Act and (iii) to impose such other limitations or conditions in connection with any such sale as the Collateral Agent deems necessary or advisable in order to comply with said Act or any other law. Each Grantor covenants and agrees that it will execute and deliver such documents and take such other action as the Collateral Agent deems necessary or reasonably advisable in order that any such sale may be made in compliance with the Securities Act of 1933 and all other applicable laws. The Grantors acknowledge and agree that such limitations may result in prices and other terms less favorable to the seller than if such limitations were not imposed, and, notwithstanding such limitations, agrees that any such sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private, it being the agreement of the Grantors and the Collateral Agent that the provisions of this Section 6.05 will apply notwithstanding the existence of a public or private market upon which the quotations or sales prices may exceed substantially the price at which the Collateral Agent sells the Pledged Collateral. The Collateral Agent shall be under no obligation to delay a sale of any Pledged Collateral for a period of time necessary to permit the issuer of any securities contained therein to register such securities under the Federal Securities Laws, or under applicable state securities laws, even if the issuer would agree to do so.
Section 6.06.Application of Proceeds.
(a)Priority of Distributions. All moneys and proceeds received or recovered by the Collateral Agent pursuant to this Agreement shall be applied in the order and manner specified by Section 2.10(b) (Method of Payment) of the Credit Agreement.
(b)Deficiencies. It is understood that the Grantors shall remain liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the amount of the Obligations.
ARTICLE VII
CONCERNING THE COLLATERAL AGENT
CONCERNING THE COLLATERAL AGENT
Section 7.01.Reference to Credit Agreement. Each Secured Party, by its acceptance of the benefits hereof, agrees that it shall have no right individually to realize upon any of the Collateral hereunder, it being understood and agreed by such Secured Party that all rights and remedies hereunder may be exercised solely by the Collateral Agent for the benefit of the Secured Parties.
Section 7.02.Indemnity. Each Grantor shall promptly, in accordance with Section 9.2 (Indemnification by the Borrower) of the Credit Agreement, indemnify the Collateral Agent and each other Secured Party against any cost, loss or liability incurred by it:
(a) in relation to or as a result of:
(i) the taking, holding, protection or enforcement of the Collateral;
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(ii) the exercise of any of the rights powers, discretions and remedies vested in the Collateral Agent by this Agreement or by law; or
(iii) any default by any Grantor in the performance of any of the obligations expressed to be assumed by it in this Agreement; or
(b) which otherwise relates to any of the Collateral or the performance of the terms of this Agreement (in each case, other than as a result of the Collateral Agent's or such Secured Party's gross negligence or willful misconduct).
ARTICLE VIII
MISCELLANEOUS
MISCELLANEOUS
Section 8.01.Notices. Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be provided in the manner set forth in Section 10.6 (Notices) of the Credit Agreement.
Section 8.02.Costs and Expenses. Each Grantor shall, in accordance with Section 9.1 (Costs and Expenses) of the Credit Agreement, pay to the Collateral Agent the amount of all reasonable, documented, out-of-pocket costs and expenses (including legal fees) incurred by it in connection with the negotiation, preparation, printing, execution, completion, perfection and enforcement of this Agreement and any other documents referred to in or incidental to, this Agreement and the security created by this Agreement. If not paid when due, and after the expiration of all applicable grace and/or cure periods, the amounts payable under this section shall (without double counting) carry interest as if such amounts owed were a Floating Rate Loan and default interest were due and payable under Section 2.5 of the Credit Agreement (after as well as before judgment), from the date when due (after the expiration of all applicable grace and/or cure periods) and shall form part of the Obligations.
Section 8.03.No Waivers; Non-Exclusive Remedies. No failure or delay on the part of the Collateral Agent or any other Secured Party to exercise, no course of dealing with respect to, and no delay in exercising, any right, power or privilege under this Agreement or any other Loan Document or any other document or agreement contemplated hereby or thereby and no course of dealing between the Collateral Agent or any other Secured Party and any of the Grantors shall operate as a waiver thereof nor shall any single or partial exercise of any such right, power or privilege hereunder or under any Loan Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights and remedies provided herein and in the other Loan Documents are cumulative and are not exclusive of any other remedies provided by law. Without limiting the foregoing, nothing in this Agreement shall impair the right of the Collateral Agent or any other Secured Party to exercise any right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of any Grantor other than its indebtedness under the Loan Documents.
Section 8.04.Reserved.
Section 8.05.Amendments and Waivers. Any provision of this Agreement may be amended, changed, discharged, terminated or waived if, but only if, such amendment or waiver is in writing and is signed by each Grantor directly affected by such amendment, change, discharge, termination or waiver (it being understood that the addition or release of any Grantor hereunder shall not constitute an amendment, change, discharge, termination or waiver affecting any Grantor other than the Grantor so added or released and it being further understood and agreed that any supplement to Schedule 1.02 delivered pursuant to Section 4.13 shall not require the consent of any Grantor) and the Collateral Agent.
Section 8.06.Successors and Assigns. This Agreement shall be binding upon each of the parties hereto and inure to the benefit of the Collateral Agent and the other Secured Parties and their successors and permitted assigns. In the event of an assignment of all or any of the Obligations, the rights hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with such indebtedness. The Collateral Agent may at any time assign or otherwise transfer all or any part of its rights under this Agreement in accordance with the Loan Documents. No Grantor shall assign or
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delegate any of its rights and duties hereunder except as expressly permitted by and in accordance with the Credit Agreement.
Section 8.07.Limitation of Law; Severability.
(a)All rights, remedies and powers provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Agreement are intended to be subject to all applicable mandatory provisions of law which may be controlling and be limited to the extent necessary so that they will not render this Agreement invalid, unenforceable in whole or in part, or not entitled to be recorded, registered or filed under the provisions of any applicable law.
(b)If any provision hereof is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Collateral Agent and the other Secured Parties in order to carry out the intentions of the parties hereto as nearly as may be possible, and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provisions in any other jurisdiction.
Section 8.08.Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective with respect to each Grantor when the Collateral Agent shall receive counterparts hereof executed by itself and such Grantor. Delivery of an executed counterpart of a signature page to this Agreement if made via electronic imaging means (e.g. "pdf") shall be effective as delivery of a manually executed counterpart of this Agreement. The words "executed," "signed," "signature," and words of like import in this Agreement shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
Section 8.09.Additional Grantors. It is understood and agreed that any Affiliate of a Loan Party that is required by any Loan Document to execute a counterpart of this Agreement after the date hereof shall automatically become a Grantor hereunder with the same force and effect as if originally named as a Grantor hereunder by executing an instrument of accession or joinder reasonably satisfactory in form and substance to the Collateral Agent and delivering the same to the Collateral Agent. Concurrently with the execution and delivery of such instrument of accession or joinder, such Affiliate shall take all such actions and deliver to the Collateral Agent all such documents and agreements as such Affiliate would have been required to deliver to the Collateral Agent on or prior to the date of this Agreement had such Affiliate been a party hereto on the date of this Agreement. Such additional materials shall include, among other things, supplements to each of the Schedules hereto (which Schedules shall thereupon automatically be amended and supplemented to include all information contained in such supplements) such that, after giving effect to the accession or joinder of such Affiliate, each of the Schedules hereto is true, complete and correct with respect to such Affiliate as of the effective date of such accession or joinder. The execution and delivery of any such instrument of accession or joinder, and the amendment and supplementation of the Schedules hereto as provided in the immediately preceding sentence, shall not require the consent of any other Grantor hereunder. The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement.
Section 8.10.Termination. Upon the occurrence of the Discharge Date, the Security Interests created hereunder in favor of the Collateral Agent shall terminate and all rights to the Collateral shall revert to the Grantors. Upon any such termination of the Security Interest created hereunder or release of Collateral or any part thereof in accordance with the provisions of the Credit Agreement, the Collateral Agent, shall, upon written request by and at the sole cost and expense of the Grantors, execute and deliver to the Grantors such documents as the Grantors shall reasonably request to evidence the termination of the Security Interests created hereunder or the release of such Collateral, as the case may be; provided, however, that such Grantor shall have delivered to the
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Collateral Agent, together with such written request for a release in the case of a partial release, a form of release for execution by the Collateral Agent, a certificate of any authorized officer of such Grantor to the effect that the transaction giving effect to such partial release is in compliance with the Credit Agreement (on which the Collateral Agent may conclusively rely) and such other supporting documentation as the Collateral Agent may reasonably request. Any such documents shall be without recourse to or warranty by the Collateral Agent or the other Secured Parties. The Collateral Agent shall not have any liability whatsoever to any other Secured Party as a result of any release of Collateral by it as permitted by this Section 8.10.
Section 8.11.Entire Agreement. This Agreement and the other Loan Documents constitute the entire agreement and understanding among the parties hereto and supersede any and all prior agreements and understandings, oral or written, and any contemporaneous oral agreements and understandings relating to the subject matter hereof and thereof.
Section 8.12.GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
Section 8.13.SUBMISSION TO JURISDICTION. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY HERETO MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY OTHER PARTY HERETO OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
Section 8.14.WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 8.15.SERVICE OF PROCESS. Each Grantor (other than the Borrower) irrevocably appoints the Borrower as its agent for service of process in relation to any proceedings before any courts located in the State of New York in connection with this Agreement. The Borrower hereby accepts such appointment. Each Grantor (other than the Borrower) agrees to maintain the Borrower as its agent for service of process in relation to any such proceedings until this Agreement is terminated in accordance with its terms. Each Grantor (other than the Borrower) agrees that failure by a process agent to notify such Grantor of the process will not invalidate the proceedings concerned. Each Grantor (other than the Borrower) consents to the service of process relating to any proceedings by a notice given in accordance with Section 8.01. If the appointment of the Grantor ceases to be effective with respect to any Grantor, such Grantor shall promptly appoint a person in the State of New York to accept service of process on its behalf in the State of New York and, if such does not appoint a process agent within fifteen (15) days, such grantor
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authorizes the Collateral Agent to appoint a process agent for, and at the expense of, the Grantors.
Signature Pages Follow
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first written above.
GRANTORS: | CURIOSITY INC. By: /s/ P. Brady Hayden Name: P. Brady Hayden Title: Chief Financial Officer | ||||
CURIOSITYSTREAM INC. By:/s/ P. Brady Hayden Name:P. Brady Hayden Title:Chief Financial Officer | |||||
COLLATERAL AGENT: | CITIBANK, N.A. By:/s/ Bryant Bedwell Name: Bryant Bedwell Title: Director | ||||
[Signature Page - Pledge and Security Agreement]
Exhibit 10.12
Execution Version
Grant of Security Interest
in United States Patents and Trademarks
in United States Patents and Trademarks
This PATENT AND TRADEMARK SECURITY AGREEMENT, dated as of March 12, 2026 (as it may be amended, restated, supplemented or otherwise modified from time to time, this "Agreement"), is made by the entities identified as grantors on the signature pages hereto (collectively, the "Grantors") in favor of CITIBANK, N.A., as collateral agent for the benefit of the Secured Parties (in such capacity, together with its successors, the "Collateral Agent").
WHEREAS, the Grantors are party to a Pledge and Security Agreement dated as of March 12, 2026 (the "Pledge and Security Agreement") between each of the Grantors and the other grantors party thereto and the Collateral Agent pursuant to which the Grantors granted a security interest to the Collateral Agent in the Patent and Trademark Collateral (as defined below) and are required to execute and deliver this Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Grantors hereby agree with the Collateral Agent as follows:
SECTION. 1. Defined Terms
Unless otherwise defined herein, terms defined in the Pledge and Security Agreement and used herein have the meaning given to them in the Pledge and Security Agreement.
SECTION 2. Grant of Security Interest
Each Grantor hereby grants to the Collateral Agent for the benefit of the Secured Parties a security interest in and continuing lien on all of such Grantor’s right, title and interest in, to and under the following, in each case whether now owned or existing or hereafter acquired, developed, created or arising and wherever located (all of the following items or types of property being herein collectively referred to as the "Patent and Trademark Collateral"):
(i)each United States and foreign patent and patent application, including each Patent and Patent Application referred to on Schedule A hereto;
(ii)each Patent License, including each Patent License listed on Schedule A hereto;
(iii)each United States and foreign trademark, trademark registration and trademark application, and all of the goodwill of the business connected with the use of, and symbolized by, each trademark, trademark registration and trademark application, including each Trademark, Trademark Registration and Trademark Application referred to in Schedule B hereto;
(iv)each Trademark License, whether registered or not, including each Trademark License referred to in Schedule B hereto, and all of the goodwill of the business connected with the use of, and symbolized by, each Trademark; and
(v)all products and proceeds of the foregoing, including any claim by the Grantor against third parties for past, present or future infringement of any Patent, or past, present or future infringement or dilution of any Trademark or Trademark registration, including any Patent or Trademark listed on Schedule A or B hereto, or under any Patent or Trademark licensed under any Patent License or Trademark License, including any such License listed on Schedule A or B hereto, or for injury to the goodwill associated with any Trademark, Trademark registration or Trademark License.
SECTION 3. Pledge and Security Agreement
1
The security interest granted pursuant to this Agreement is granted in conjunction with the security interest granted to the Collateral Agent for the benefit of the Secured Parties pursuant to the Pledge and Security Agreement, and the Grantors hereby acknowledge and affirm that the rights and remedies of the Collateral Agent with respect to the security interest in the Patent and Trademark Collateral made and granted hereby are more fully set forth in the Pledge and Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event that any provision of this Agreement is deemed to conflict with the Pledge and Security Agreement, the provisions of the Pledge and Security Agreement shall control.
SECTION 4. Governing Law
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND ALL CLAIMS AND CONTROVERSIES ARISING OUT OF THE SUBJECT MATTER HEREOF WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 5. Termination
Upon the occurrence of the Discharge Date and termination of the Pledge and Security Agreement, the Collateral Agent shall execute, acknowledge and deliver to the Grantors an instrument in writing in recordable form releasing the collateral pledge, grant, assignment, lien and security interest in the Patent and Trademark Collateral under this Agreement.
SECTION 6. Counterparts
This Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.
2
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the 11th day of March, 2026.
CURIOSITY INC., as Grantor By:/s/ P. Brady Hayden Name: P. Brady Hayden Title: Chief Financial Officer | |||||
CITIBANK, N.A., as Collateral Agent, as Grantee By:/s/ Bryant Bedwell Name: Bryant Bedwell Title: Director | |||||
[Trademark Security Agreement – Signature Page]
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Clint Stinchcomb, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of CuriosityStream Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Dated: May 14, 2026 | By: | /s/ Clint Stinchcomb | ||||||
| Name: | Clint Stinchcomb | |||||||
| Title: | President and Chief Executive Officer | |||||||
| (Principal Executive Officer) | ||||||||
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, P. Brady Hayden, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of CuriosityStream Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Dated: May 14, 2026 | By: | /s/ P. Brady Hayden | ||||||
| Name: | P. Brady Hayden | |||||||
| Title: | Chief Financial Officer | |||||||
| (Principal Financial and Accounting Officer) | ||||||||
Exhibit 32.1
CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Clint Stinchcomb, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such report fairly presents, in all material respects, the financial condition and results of operations of CuriosityStream Inc.
Dated: May 14, 2026 | By: | /s/ Clint Stinchcomb | ||||||
| Name: | Clint Stinchcomb | |||||||
| Title: | President and Chief Executive Officer | |||||||
| (Principal Executive Officer) | ||||||||
I, P. Brady Hayden, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such report fairly presents, in all material respects, the financial condition and results of operations of CuriosityStream Inc.
Dated: May 14, 2026 | By: | /s/ P. Brady Hayden | ||||||
| Name: | P. Brady Hayden | |||||||
| Title: | Chief Financial Officer | |||||||
| (Principal Financial and Accounting Officer) | ||||||||