Material Agreement (Form 8-K)

Item 1.01 Entry into Material Definitive Agreement.

On August 8, 2025, Direct Digital Holdings, LLC ("DDH LLC"), as borrower, entered into the Seventh Amendment (the "Seventh Amendment") to the Term Loan and Security Agreement dated December 3, 2021 (the "Term Loan Facility") with Direct Digital Holdings, Inc. (the "Company"), Colossus Media, LLC, Huddled Masses LLC and Orange142, LLC, as guarantors (such guarantors together with DDH LLC, the "Credit Parties"), and Lafayette Square Loan Servicing, LLC ("LS"), as administrative agent, and Lafayette Square USA, Inc. ("Lafayette") and the other lenders from time to time party thereto. Under the terms of the Seventh Amendment, the parties agreed to convert and exchange term loans with an aggregate principal amount of $25,000,000.00 for newly authorized shares of Series A Preferred Stock, par value $0.001, of the Company (the "Series A Preferred Stock"), with an aggregate face amount of $25,000,000.00 issued to Lafayette. Immediately following the conversion and exchange, term loans in an aggregate principal amount of $9,362,359.84 remain outstanding under the Term Loan Facility. In connection with the Seventh Amendment, the Credit Parties agreed to pay a $1,000,000 closing fee upon the earliest to occur of the payment in full of the term loans under the Term Loan Facility, the earlier acceleration of the term loans pursuant to the terms of the Term Loan Facility and September 30, 2025, as well as other fees and expenses required to be paid pursuant to the terms of the Term Loan Facility.

Additionally, pursuant to a letter agreement dated August 8, 2025 by and between the Credit Parties, LS and Lafayette (the "Letter Agreement"), the Credit Parties agreed to pay LS for the benefit of Lafayette a $25,000,000 exit fee upon the redemption in full of the $25,000,000 face amount of the Series A Preferred Stock; provided, that (i) if the Credit Parties redeem in full the Series A Preferred Stock at the Series A Liquidation Amount (as defined in the Certificate of Designation (as defined below)) on or prior to December 31, 2026, such exit fee is no longer due and payable and (ii) the amount of the exit fee reduces over time by the cumulative Corporation Redemption Price (as defined in the Certificate of Designation) under the Certificate of Designation that is received by Lafayette over time (including, the Corporation Redemption Price paid to Lafayette at the time that all of the Series A Preferred Stock is redeemed) and the cumulative Conversion Value (as defined in the Certificate of Designation) of the shares of Series A Preferred Stock converted voluntarily by Lafayette to Conversion Shares (as defined in the Certificate of Designation) pursuant to the terms of the Certificate of Designation.

The Seventh Amendment amends (i) the consolidated total leverage ratio to provide that commencing with the fiscal quarter ending June 30, 2026, the Credit Parties are required to maintain a consolidated total leverage ratio of not more than 3.50 to 1.00 and 3.25 to 1.00 for each fiscal quarter thereafter, (ii) the consolidated fixed charge coverage ratio to provide that commencing with the fiscal quarter ending June 30, 2026, the Credit Parties are required to maintain a fixed charge coverage ratio of not less than 1.25 to 1.00 and 1.50 to 1.00 for each fiscal quarter thereafter, (iii) the minimum unrestricted cash financial covenant to require the Credit Parties to maintain $1,500,000 of unrestricted cash at all times and (iv) the Term Loan Facility by adding a requirement for the Credit Parties to maintain minimum Consolidated EBITDA as of the end of each fiscal quarter of $1,000,000 for the fiscal quarters ended September 30, 2025 and December 31, 2025, and $500,000 for each fiscal quarter thereafter. The Seventh Amendment also amends the Term Loan Facility to permit the issuance of the Series A Preferred Stock and to permit the various transactions contemplated by the Certificate of Designation with respect to the Series A Preferred Stock.

The lenders under the Seventh Amendment have agreed that they will not transfer the shares of Series A Preferred stock and any shares of Common Stock issued or issuable upon conversion thereof(and any securities issuable, directly or indirectly, upon conversion or exchange of any of the foregoing, if any) (collectively, "Securities") may not be transferred or assigned, in whole or in part, (i) except in compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, upon reasonable request of the Company, the delivery of an investment representation letter and/or legal opinion reasonably satisfactory to the Company) and (ii) with respect to the Series A Preferred Stock, upon the prior written consent of the Company in its sole discretion, which shall not be unreasonably withheld, conditioned or delayed, provided, that a lender may transfer or assign the Series A Preferred Stock to an affiliate of a lender or related fund of Lafayette without the consent of the Company by providing advance written notice of such transfer or assignment to the Company.

The foregoing descriptions of the Seventh Amendment and Letter Agreement are not complete and are qualified in their entireties by the full text of the Seventh Amendment and Letter Agreement, respectively, a copy of each of which is filed herewith as Exhibit 10.1 and Exhibit 10.2, respectively, and incorporated herein by reference.