On April 19, 2024, Sezzle Funding SPE II, LLC (the Borrower), a wholly owned indirect subsidiary of Sezzle Inc. (the Company), entered into a senior secured asset-based revolving credit facility (the new revolving credit facility), with a borrowing capacity of up to $150.0 million, which is governed by a Revolving Credit and Security Agreement (the Credit Agreement) entered into by the Borrower, certain lenders party thereto and Bastion Funding VI LP, as administrative agent (the Agent). The new revolving credit facility has a maturity date of April 19, 2027. The new revolving credit facility?s minimum utilization rate is $60.0 million.

The new revolving credit facility carries an interest rate of 3-month Term SOFR plus 6.75%. The advance rate under the new revolving credit facility is 85% of the available receivable balance, unless the three most recent Seasoned Vintages (as defined in the Credit Agreement) have a Weighted Average Loss Rate (as defined in the Credit Agreement) of less than 3.00%, in which case the advance rate is equal to 90%. The obligations of the Borrower under the new revolving credit facility are guaranteed by Sezzle Funding SPE II Parent, LLC (SPE II Parent), a wholly owned subsidiary of the Company, which is the sole member and owner of 100% of the equity interests of the Borrower, pursuant to that certain Pledge and Guaranty Agreement dated as of April 19, 2024, entered into by SPE II Parent in favor of the Agent on behalf of the secured parties under the new revolving credit facility (the Parent Guaranty).

The new revolving credit facility is further supported by a limited guaranty and indemnity of certain losses, expenses and claims of the lenders and other secured parties, provided by the Company, as the direct owner of 100% of the legal and beneficial equity interests in SPE II Parent, pursuant to that certain Limited Guaranty and Indemnity Agreement entered into as of April 19, 2024 by the Company for the benefit of the Agent on behalf of the secured parties under the new revolving credit facility (the Limited Guaranty). The Credit Agreement, Parent Guaranty, and Limited Guaranty, and the additional ancillary agreements related to the new revolving credit facility are referred to collectively herein as the Credit Facility Agreements. The Credit Agreement includes certain restrictive covenants and, among other things and subject to certain exceptions and qualifications, limits the Borrower?s ability to: (i) incur or guarantee additional indebtedness, (ii) make investments or other restricted payments, (iii) acquire assets or form or acquire subsidiaries; (iv) create liens, (v) sell assets, (vi) pay dividends or make other distributions or repurchase or redeem capital stock, (vii) engage in certain transactions with affiliates, (viii) enter into agreements that restrict the creation or incurrence of liens other than liens securing the new revolving credit facility and related documents, (ix) engage in liquidations, mergers or consolidations, and (x) make any material amendment, modification or supplement to its credit guidelines or servicing guide.

SPE II Parent is subject to similar restrictive covenants contained in the Parent Guaranty. The Limited Guaranty limits the Company?s ability to make certain restricted payments and includes financial maintenance covenants pertaining to the tangible net worth, liquidity and leverage of the Company and its subsidiaries on a consolidated basis (the Consolidated Group). A failure by the Consolidated Group to satisfy the financial covenants under the Limited Guaranty constitutes an event of default under the new revolving credit facility.

The Credit Agreement also contains certain customary representations and warranties, affirmative covenants and events of default (including, among others, an event of default upon a change of control). An immediate event of default is also deemed to have occurred if ratios pertaining to defaulted collateral receivables of a particular vintage or past due collateral receivables within a certain collection period exceed pre-determined levels.