GlassBridge Enterprises, Inc. entered into a term loan and security agreement (the Term Loan and Security Agreement) with Tacora dated as of September 25, 2023, pursuant to which Tacora lent $2,000,000 to the Company (the Term Loan). The Term Loan requires quarterly payments or accruals (at the Company?s option) of interest, equal to an 8% per annum rate. If the Company defaults on the Term Loan, the interest rate increases to 11% (or the highest rate permitted by law).

The Term Loan, and all accrued and unpaid interest, is due in full seven years following its issuance. The Company has the right to prepay the Term Loan in increments of at least $100,000 at any time after the Preferred Stock has been redeemed. Any amounts repaid by the Company to Tacora may not be re-borrowed.

The Term Loan includes a number of covenants. Specifically, the Company had to certify as to its charter and bylaws, provide lien searches, make uniform commercial code (UCC) filings perfecting Tacora?s interest in collateral, and pay off the loan to Gazellek. In addition, the Term Loan lists certain events of defaults, each of which triggers an immediate obligation on the part of the Company to repay the Term Loan.

The events of default include failure to pay, a breach of any covenant contained in the Term Loan agreement, bankruptcy, judgments in excess of $100,000 in any case and $250,000 in the aggregate and cross-defaulting on any other loan to the Company. All of the Company subsidiaries have guaranteed repayment of the Term Loan. All property of the Company and its subsidiaries have been pledged to secure repayment of the Term Loan.

In the Term Loan, the Company has also made a number of on-going affirmative covenants to Tacora. It must provide on-going financial statement to Tacora and pay its own taxes and insurance. Under the Term Loan, the Company has made a number of negative covenants designed to ensure that the Company does not become less able or unable to repay the Term Loan.

These covenants include not incurring additional indebtedness or other obligations, creating liens against its properties, disposing of its properties, other than dispositions of obsolete and worn-out properties, and to use the Term Loan proceeds other than to repay the Gazellek indebtedness, redeem certain Common Stock and for working capital purposes.