Exhibit 10.2

 

August 8, 2025

Lafayette Square Loan Servicing, LLC

Lafayette Square USA, Inc.

PO Box 25250

PMB 13941

Miami, Florida 33102-5250

Attention: Susan Golden

Re: Exit Fee

Ladies and Gentlemen:

Reference is made to (i) that certain Term Loan and Security Agreement dated as of December 3, 2021, as amended from time to time, including, as most recently amended pursuant to that certain Seventh Amendment dated as of August 8, 2025 (the “Seventh Amendment”, and such Term Loan and Security Agreement, as so amended from time to time, the “Loan and Security Agreement”), by and among Direct Digital Holdings, LLC, a Texas limited liability company (“Borrower”), Direct Digital Holdings, Inc., a Delaware corporation (“DDH Holdings”), Colossus Media, LLC, a Delaware limited liability company (“Colossus”), Huddled Masses LLC, a Delaware limited liability company (“HM”), Orange142, LLC, a Delaware limited liability company (“Orange” and together with DDH Holdings, Colossus, and HM, “Guarantors” and each individually a “Guarantor” and together with the Borrower, collectively, the “Credit Parties”, and each a “Credit Party”), the lenders from time to time party thereto (the “Lenders”) and Lafayette Square Loan Servicing, LLC, as agent for the Lenders (the “Agent”) and (ii) that certain Certificate of Designation of Series A Convertible Preferred Stock dated as of August 8, 2025 (the “Certificate of Designation”). Capitalized terms used herein and not otherwise defined shall have the meaning set forth in the Loan Agreement as of the date hereof or the Certificate of Designation, as applicable.

In consideration of the agreement by Agent and the Lenders to enter into the Seventh Amendment and the transactions contemplated therein, and the conversion and exchange of Term Loans in a principal amount equal to $25,000,000.00 for Series A Preferred Stock by Lafayette Square USA, Inc. (“Lafayette Square”) pursuant to the Certificate of Designation, the Credit Parties agree to pay to the Agent for the benefit of Lafayette Square, an exit fee (the “Exit Fee”) in an amount equal to the Exit Fee Amount (defined below), which is fully earned on the date hereof and shall be due and payable upon the redemption in full of the Series A Preferred Stock pursuant to Section 8 of the Certificate of Designation; provided, that if the Credit Parties redeem in full the Series A Preferred Stock at the Series A Liquidation Amount on or prior to December 31, 2026, the Credit Parties shall not have an obligation to pay the Exit Fee and no Exit Fee shall be due and payable hereunder. “Exit Fee Amount” shall mean an amount equal to $25,000,000 less the Redeemed Amount (defined below) less the Converted Amount (defined below). “Redeemed Amount” shall mean an amount equal to, on a cumulative basis, the Corporation Redemption Price received by Lafayette Square pursuant to Section 8 of the Certificate of Designation (including, the Corporation Redemption Price paid to Lafayette Square at the time that all of the Series A Preferred Stock is redeemed). “Converted Amount” shall mean an amount equal to, on a cumulative basis, the aggregate Conversion Value of the shares of Series A Preferred Stock converted voluntarily by Lafayette Square to Conversion Shares pursuant to Section 6 of the Certificate of Designation.

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Without limiting the foregoing, the Exit Fee shall not be refundable under any circumstances. The Exit Fee shall be paid in immediately available funds and shall not be subject to reduction by way of setoff or counterclaim. In addition, payment of the Exit Fee shall be made without deduction for any taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any national, state or provincial taxing authority, in each case except as required by Applicable Law.

Each Credit Party hereby (a) agrees that each Credit Party’s obligation to pay the Exit Fee constitutes an “Exit Fee Obligation” as defined under the Loan and Security Agreement and is a secured Obligation under the Loan and Security Agreement and the Other Documents; (b) ratifies and confirms that the security instruments executed by each Credit Party to secure the full payment and performance of the Obligations (including the Exit Fee Obligation) pursuant to their terms; and (c) acknowledges the continuing existence and priority of the Liens granted, conveyed, and assigned to Agent for its benefit and for the ratable benefit of each Lender, under the security instruments after giving effect to this letter agreement.

Each Credit Party shall take all action that may be necessary or that Agent may request, so as at all times to maintain the validity, perfection, enforceability and priority of Agent’s security interest in and Lien on the Collateral or to enable Agent to protect, exercise or enforce its rights hereunder and in the Collateral. Each Credit Party hereby authorizes Agent to file against such Credit Party, one or more financing, continuation or amendment statements pursuant to the Uniform Commercial Code in form and substance satisfactory to Agent (which statements may have a description of collateral which is broader than that set forth herein, including without limitation a description of Collateral as “all assets” and/or “all personal property” of any Credit Party). The Credit Parties agree that at any time and from time to time, at the expense of the Credit Parties, the Credit Parties will promptly execute and deliver all further instruments and documents, and take all further action that may be necessary or desirable, or that Agent may reasonably request, in order to create and/or maintain the validity, perfection or priority of and protect any security interest granted or purported to be granted to secure the Obligations (including the Exit Fee Obligation) or to enable Agent to exercise and enforce its rights and remedies hereunder.

Each Credit Party agrees that failure to pay the Exit Fee, as and when due and payable as set forth herein, shall constitute an Event of Default under the Loan and Security Agreement. Following the occurrence and during the continuance of a default under this letter agreement relating to the failure of the Credit Parties to pay the Exit Fee, as and when due and payable, Agent may exercise any and all rights and remedies provided for under the Loan and Security Agreement and Other Documents and may assert all rights and remedies of a secured party under the Uniform Commercial Code or other applicable law, and each Credit Party shall cooperate with all of Agent’s reasonable efforts to preserve the Collateral and will take such actions to preserve the Collateral as Agent may reasonably direct.

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The obligations of the Credit Parties under this letter agreement shall survive termination of the Loan and Security Agreement and the Other Documents and payment in full of the Obligations (other than the Exit Fee Obligation). Notwithstanding any of the terms contained herein, the Credit Parties, Agent and the Lenders agree that this letter agreement shall automatically terminate on the Release Date. For purposes hereof, “Release Date” means the earliest to occur of: (a) the redemption in full of the Series A Preferred Stock at the Series A Liquidation Amount and receipt by Lafayette Square of Corporation Redemption Price pursuant to Section 8 of the Certificate of Designation on or prior to December 31, 2026, (b) the payment in full of the Exit Fee in accordance with the terms of this letter agreement, and (c) the voluntary conversion by Lafayette Square of all of the Series A Preferred Stock to Conversion Shares pursuant to Section 6 of the Certificate of Designation.

Except as expressly set forth herein, this letter agreement shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of any party under, the Loan and Security Agreement, nor alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Loan and Security Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect.

This letter agreement shall in accordance with Section 5-1401 of the General Obligations Law of the State of New York, be governed by and construed in accordance with the laws of the State of New York.

Please confirm that the foregoing is our mutual agreement and understanding by signing and returning to us an executed counterpart of this letter.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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Very truly yours,
DIRECT DIGITAL HOLDINGS, LLC
By:	/s/ Keith W. Smith
	Name: Keith Smith
	Title: President

DIRECT DIGITAL HOLDINGS, INC.
By:	/s/ Keith W. Smith
	Name: Keith Smith
	Title: President

COLOSSUS MEDIA, LLC
By:	/s/ Keith W. Smith
	Name: Keith Smith
	Title: President

HUDDLED MASSES LLC
By:	/s/ Keith W. Smith
	Name: Keith Smith
	Title: President

ORANGE142, LLC
By:	/s/ Keith W. Smith
	Name: Keith Smith
	Title: President

[Signature Page to Side Letter re Exit Fee]

AGREED AND ACCEPTED this 8th day of August, 2025:

LAFAYETTE SQUARE LOAN SERVICING, LLC
By:	/s/ Philip Daniele
	Name: Philip Daniele
	Title: Chief Risk Officer

LAFAYETTE SQUARE USA, INC.
By:	/s/ Philip Daniele
	Name: Philip Daniele
	Title: Chief Risk Officer

[Signature Page to Side Letter re Exit Fee]